United States

RSM's Senior Living Health Care Connection: Consolidated billing


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.