Senior Living Health Care Connection: Consolidated billing

May 05, 2015
Audit Health care

When skilled nursing facilities (SNFs) were first introduced to the Balanced Budget Act of 1997, most facilities were unaware of how the requirements would affect them. Many non-SNF providers, such as hospitals, continued to bill Part B for services provided to the SNF Part A resident. Initially, these non-SNF providers were actually being paid for these services. The Centers for Medicare & Medicaid Services (CMS) finally realized the services were being provided to SNF Part A residents, and CMS recouped the payments from the non-SNF provider. The non-SNF provider billed the SNFs for the services provided to the SNF Part A residents. SNFs were advised to set up "agreements" with those non-SNF providers that specified how the billing process was to be handled. Rather than executing a formalized contract with other providers, CMS advised SNFs to prepare "agreements" and to create a document that accompanies the resident when sent to a non-SNF provider. This document would then notify the non-SNF provider of the following:

  • That Medicare Part A covers the resident's SNF stay so that the non-SNF provider must bill the SNF (rather than Part B) for any bundled services that it furnishes to the resident
  • The particular bundled services that the beneficiary is being sent to receive and the terms of the SNF's payment to the clinic for those specified services
  • That before furnishing any bundled services beyond those specified (or referring the beneficiary to any other entity to receive such services), the non-SNF provider must first contact the SNF
  • That by furnishing services to the beneficiary, the non-SNF provider agrees to the terms set forth in the agreement with the SNF

These agreements were hard to enforce for both the SNF and the non-SNF provider. SNFs are now dealing with the invoices from other non-SNF providers who provide services to residents on a Part A stay. There are some processes that SNFs should follow to ensure appropriate payment to the outside providers:

  • Determine if the resident was in a Part A stay at the time the services were provided by the non-SNF provider
  • Review the invoice to determine that the following information is correct:
    • Invoice number
    • Resident name
    • Dates of service
    • Healthcare Common Procedure Coding System codes
    • Description of services
    • Charges
  • Check the SNF consolidated billing site for exclusions and go to the 2015 Part A Medicare Administrative Contractor Update; Note: These may change quarterly or annually, so check regularly
  • Find the fee schedule when possible on the following websites:
  • Most hospitals and clinics will accept payment for the fee schedule amount and now, many are actually including the fee schedule amount on their invoices
  • Remember, SNFs are only obligated to pay the technical component on services because the professional services are billed directly to Part B
  • If there is no fee schedule, then ask the vendor to price the services at the Medicare reasonable rate

There are several high-priced items and services that are not excluded. These include:

  • Blood transfusions
  • Some chemotherapy drugs that don’t meet the definitions in the SNF consolidated billing list
  • Wound debridement in an operating room
  • Dialysis for those residents that don’t have a diagnosis of end-stage renal disease

 For more information, contact Joan McCarthy at 312.634.3479.

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