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Understanding Medicare billing in long-term care can be a challenge. With so many different rules and regulations—and new ones on the way—it’s easy to feel overwhelmed. In this guide, we will be providing an overview of Medicare billing for long-term care facilities and discuss important aspects of Medicare billing that MDS nurses and other staff members must know about.  

Medicare was established in 1965, when President Lyndon B. Johnson signed into law the bill that created Medicare and Medicaid—the two programs that make up the current Medicare system. The goal was to provide health insurance coverage to people who are aged 65 years or older as well as to younger people with disabilities. 

Medicare is funded jointly by the federal government and enrollees themselves, and it helps to cover the costs of hospital stays, doctor visits, prescription drugs, and other medical services. Medicare billing consists of four parts: Part A, Part B, Part C, and Part D, which we will review below.  

Medicare Part A

A senior citizen receiving care at a facility that has Medicare billing practices in place.
Medicare Part A helps to cover the costs of inpatient care in a hospital and a skilled nursing facility (SNF) so long as it’s not custodial, long-term care, or hospice.

Medicare Part A helps to cover the costs of inpatient care in a hospital and a skilled nursing facility (SNF) so long as it’s not custodial, long-term care, or a hospice. It also covers some home health costs (physical therapy, occupational therapy, durable medical equipment, etc.). Part A is funded by the federal government with no monthly premium charge for it. It should be noted, though, that Medicare Part A does not cover long-term care beyond 100 days.

There are certain requirements that must be met for one to qualify for Medicare Part A as stated in the Medicare skilled nursing facility billing manual. Some of these requirements include:

  • The patient must have had a qualifying hospital stay for a minimum of three days
  • The patient must be admitted to a SNF for care that can only be provided in a SNF within 30 days of discharge from a hospital
  • Services can only be provided on an inpatient basis in a SNF

The Medicare Part A benefit period begins on the first day of a hospital stay, and it ends after either:

  • The patient has been out of the hospital for 60 consecutive days
  • The patient has reached the lifetime maximum of Medicare Part A benefits
  • The patient dies (whichever comes first)

The Medicare Part A benefit period can be extended if the patient is re-hospitalized within 60 days of being discharged from the last hospitalization.

The Medicare Part A benefit period for SNFs is a little different than for hospitals. Here’s how:

  • The Medicare Part A benefit period begins on the first day of a SNF stay, rather than the day of discharge from a hospital.
  • The Medicare Part A benefit period can be extended if the patient is re-hospitalized within 60 days of being discharged from the SNF. 
  • If a patient is in a SNF for more than 100 days, the Medicare Part A benefit period will end and the patient will have to pay for their own care.

Medicare Part B

Medicare Part B is a voluntary program that helps to cover the costs of outpatient care, including doctor visits, lab tests, and other medical services. It is jointly funded by the federal government and enrollees themselves with a monthly premium charged for it. In order to be eligible for Medicare Part B, one must qualify for both Medicare Parts A and B.

The CMS lists some of the Medicare billing responsibilities that providers must observe on their website. For Medicare Part A providers (e.g. hospitals), this means:

  • Obtaining Medicare billing information prior to providing hospital services to a patient
  • A Medicare Secondary Payer (MSP) can be submitted to the intermediary by using condition and occurrence codes on the claim.

For Medicare Part B providers, their responsibilities according to the CMS include:

  • Obtaining Medicare billing information at the time of service provision to patients.
  • Submission of an Explanation of Benefits (EOB) form with all appropriate MSP information to the designated carrier.

Medicare Part C

Medicare Part C, also known as Medicare Advantage, is a voluntary program that helps to cover the costs of outpatient care, including doctor visits, lab tests, and other medical services. It is funded jointly by the federal government and enrollees and includes a monthly premium. Medicare Part C is an alternative to Medicare Part A and Medicare Part B.

Enrollees in Medicare Part C can choose to receive their benefits through a Medicare Advantage plan or a Medicare Prescription Drug Plan. Medicare Advantage plans are offered by private insurance companies and provide coverage for hospital stays, doctor visits, prescription drugs, and other medical services. Medicare Prescription Drug Plans are offered by private insurance companies and provide coverage for prescription drugs only.

There are many different Medicare Advantage plans available, so it is important to compare them before choosing one. The Medicare website has a plan compare tool that one can use to compare Medicare Advantage plans.

Medicare Part C covers all of the services that are covered by Medicare Part A and Medicare Part B. In addition, Medicare Part C sometimes includes extra benefits that are not covered by Medicare Parts A and B. For example, some Medicare Advantage plans offer dental, vision and drug (Part D) coverage.

Enrollees in Medicare Part C must continue to pay the monthly premium for both Medicare Parts A and B. However, they usually pay less for premiums than they would if they were enrolled in Medicare Parts A and B only.

Medicare Part D

Medicare Part D is a voluntary program that helps to cover the costs of prescription drugs. It is funded jointly by the federal government and enrollees themselves, and there is a monthly premium charge for it as well. In order to be eligible for Medicare Part D, one must be enrolled in Medicare Parts A and/or Part B.

There are many different Medicare Prescription Drug Plans available, so it is important to compare them before choosing one by using the plan compare tool that’s available on the Medicare website.

Medicare Part D covers all of the prescription drugs that are covered by Medicare Part A and B. In addition, some Medicare Prescription Drug Plans offer extra benefits, such as discounts on eyeglasses or contact lenses.

Medicare Skilled Nursing Facility Billing Explained

So, how does Medicare skilled nursing facility billing work? Typically, when a patient is admitted to a SNF, they will have either private health insurance or Medicare. If the patient has private health insurance, the facility will bill their insurance company directly. However, if the patient has Medicare coverage, the facility will first bill Medicare and then bill the patient for any remaining balance that is not covered by their plan.

In the context of SNFs, Medicare billing is typically performed in the form of consolidated billing. The Balanced Budget Act of 1997 introduced Medicare consolidated billing for skilled nursing facilities. This billing method allows SNFs to bill Medicare for all services provided to a Medicare patient (Medicare Part A and Medicare Part B services), thus simplifying the billing process for both the SNF and Medicare.

Prior to the implementation of Medicare consolidated billing, SNFs would bill Medicare for each individual service that was provided to a Medicare patient under Medicare part A. Additionally, external providers of physical, occupational, and speech therapy services would separately bill for Medicare Part B. This was a time-consuming and confusing process that created a number of challenges such as:

  • Duplicate Medicare billing by the SNF and the external service providers
  • Increased patient and resident fees
  • Less efficient care coordination

With Medicare consolidated billing, SNFs are now able to bill Medicare for all services provided to a Medicare patient in a single transaction. This simplifies the Medicare billing process for both the SNF and Medicare, and makes it easier for Medicare patients to understand how much they owe for their care.

An nurse filling in a patient chart, which will be used for Medicare skilled nursing facility billing.
In the context of SNFs, Medicare billing is typically performed in the form of consolidated billing.

Meanwhile, the that which is excluded from SNF consolidated billing includes:

  • Services provided by
    • Physician assistants under a physician’s supervision
    • Nurse practitioners and clinical specialists working with a physician
    • Certified nurse-midwives
    • Psychologists
    • Certified registered nurse anesthetists
  • Home care related to a terminal condition
  • Certain dialysis-related services, including covered ambulance transportation to obtain dialysis services
  • Certain ambulance services
  • Radioisotope services 
  • Customized prosthetic services
  • The administering of: 
    • Erythropoietin for certain dialysis patients
    • Certain chemotherapy drugs
    • Certain chemotherapy administration services

One should note that the CMS lists the standard documentation requirements for all claims on their website, and they are continually updated according to changing regulations.

Contact us here if you would like to improve your Medicare billing processes with our elder care software.

What’s the Best EHR or EMR Billing Software for Your Facility?

Choosing the correct EHR or EMR billing software is an essential part of the Medicare billing process for any long-term care facility. The correct Medicare billing software can make or break the reimbursement process of a facility. Thus, facilities need to look for a senior care software provider whose software will help them observe all Medicare billing guidelines, automate processes, and increase their reimbursements.

Some tips for choosing the best billing software for Medicare billing include:

Nursing home staff using EHR or EMR billing software to validate their invoices.
Choosing the correct EHR or EMR billing software is an essential part of the Medicare billing process for any long-term care facility.
  1. Consider specialty-specific solutions: Medicare skilled nursing facility billing is a highly specialized task that requires long-term care software built specifically for this type of care. One-size-fits-all EHRs or EMRs are not equipped to properly handle Medicare billing for SNFs. Thus, one should look for a vendor with past experience in providing software for SNFs. Once found, one should ideally test the software by scheduling an EHR demo.
  2. Analyze the vendor’s reputation: SNFs are under significant regulatory pressure to maintain Medicare billing compliance, especially during SNF consolidated billing. One should only do business with a Medicare billing software vendor that has an excellent reputation in the industry. The best way to determine a vendor’s reputation is by reading their customer reviews or conducting reference checks.
  3. Consider the cost of the software: Medicare billing software is a significant investment for any SNF. One should, therefore, take the time to compare the costs of various Medicare billing software vendors before making a decision. When evaluating the cost of Medicare billing software, one should consider not only the initial purchase price but also the costs of implementation, training, maintenance, and support.
  4. Ask for peer reviews and feedback: Medicare billing is a complex process, and it can be helpful to get input from other SNFs who have already implemented Medicare billing software. One should ask the vendor for a list of references and then reach out to those references to get their honest feedback about the software. Also, one can ask others they are familiar with what elder care software they use in their facility and how effective it is when it comes to Medicare billing.

In addition to this, one can apply tips for billing in general, such as keeping track of important metrics and aligning marketing with sales.

Challenges With Medicare Billing and Medicare Regulations

Medicare billing is a complex and time-consuming process that can be challenging for facilities to navigate. To ensure Medicare billing compliance, facilities need to be aware of all Medicare billing guidelines and regulations. The best Medicare billing software can automate much of the process, but it is still up to the facility to ensure that all claims are filed correctly.

Another challenge for facilities is staying up-to-date on Medicare regulations. The CMS releases new Medicare regulations regularly, and it can be difficult for facilities to keep track of them all. The best Medicare billing software can help by automating the process of tracking regulatory changes and notifying facilities when updates are released.

Reimbursement rates are also of concern. The Medicare reimbursement rate for SNFs has been declining in recent years, making it more difficult for facilities to cover their costs. Medicare billing software such as Experience Care’s HIPPS Projector can help by validating HIPPS scores and improving the accuracy of projected reimbursement rates on specific claims.

Medicare billing for long-term care facilities can be complex, but this guide should help make things a little bit easier to understand. If you have any questions about Medicare billing, or if you need help getting started, contact us today. We’ll be happy to walk you through the process and answer any questions you may have.

For more on recent trends in long-term care, read our blog and subscribe to the LTC Heroes podcast.

Elijah Oling Wanga