Skilled Nursing Facility Patients—Consolidated Billing

When treating a patient that lives in a skilled nursing facility (SNF), it is important to understand the coding and billing guidelines of consolidated billing. That is because certain services must be consolidated and submitted by the SNF using its Medicare provider number, and not submitted by you, the physician, unless they are one of the excluded services, which will be further discussed below.

To be an SNF provider, you must have a financial agreement with the SNF. If there is not an agreement made with the SNF, the physician risks not being compensated because, unless the services is considered to be an excluded service, the charge cannot be submitted directly to Medicare. Also, the SNF is not responsible for payment to the treating provider if it’s unaware of the treating physician’s orders for that service.

So how does a practice know if a patient is residing in a SNF at the time of the office visit? Verifying insurance benefits prior to each patient visit will help you avoid reimbursement issues for treating a patient who resides in a SNF.

Consolidated billing guidelines state, “a skilled nursing facility itself must submit all Medicare claims for the services that its residents receive (except for specifically excluded services).” A complete list of excluded services can be found on CMS website at Listed below are excluded services from that list that affect rheumatologists.

Excluded Services

Why Consolidated Billing?

Congress enacted the Balance Budget Act of 1997, Public Law 105-33, Section 4432(b), which included the consolidated billing guidelines for skilled nursing facilities (SNFs). Before consolidating billing, all SNFs had the option of unbundling services. This meant they could allow a provider to provide a service to the patient and allow the physician to submit the claim directly to Medicare Part B, and the SNF would submit its claim to Medicare Part A. This caused frequent problems, such as:

  • Duplicate billing of the same service to Part A and Part B;
  • Potential greater out-of-pocket liability for the beneficiary due to the Part B deductible and coinsurance; and
  • Adversely affected quality of the patient’s care coordination, due to the distribution of responsibility of the patient’s care among several providers.
  • Physicians’ professional services furnished to SNF residents including office visits, injections, and infusions.
    • Note: Medications—such as infusion medication—or equipment are not considered “excluded.” To be reimbursed for infusion medication, you must have an agreement with the SNF prior to the patient receiving the infusion.
    • Note: If a provider performs a service that includes both the professional and a technical component, such as a radiological procedure, the technical component is subject to consolidated billing and must be billed to and reimbursed by the SNF. The professional service is billed to Medicare directly by the treating physician.
    • Section 1888(e) (2) (A) (ii) of the Social Security Act specifies that physical, occupational, and speech-language therapy services falls under consolidated billing.
  • Physician assistants and nurse practitioners working under a physician’s supervision providing professional services including office visits, injections, and infusions.
  • Computerized axial tomography scans.
  • Magnetic resonance imaging.
  • Emergency services.
  • Certain chemotherapy items and their administration.
    • Physicians should verify with their carrier as to which drugs are on the excluded list.

For example, you perform ultrasound guidance on a patient who resides in a SNF. The procedure qualifies as an excluded service under the radiological component excluded service rule so the professional component of the service is billed to Medicare Part B. The technical component must be billed to the SNF under Medicare Part A. Keep in mind that you must have a financial agreement with the SNF to be paid. See this month’s “Coding Corner”for an example of this coding scenario.

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