If you work in the long term care industry, you’ve probably heard the term “SNF consolidated billing,” but what is consolidated billing, and how does it affect skilled nursing facilities (SNFs) and the residents who live in them?
SNF consolidated billing is a Medicare reimbursement policy that went into effect in 1997. Under this policy, skilled nursing facilities (SNFs) are reimbursed for Medicare Part A and Part B services provided to their residents. This lump sum payment to SNFs includes all room and board charges as well as all ancillary services, such as physical therapy, occupational therapy, and speech therapy.
Previously, SNFs were reimbursed separately for each type of service provided. This meant that if the resident was covered by Medicare Part A, SNFs could provide residents with services:
- Directly using their own resources
- Through the SNF’s transfer agreement hospital
- Under arrangements with an external service provider for physical, occupational, and speech therapy services.
Additionally, the external service provider that provided physical, occupational, and speech therapy services would separately bill Medicare Part B. This created a number of problems such as:
- Duplicate billing in cases in which both the SNF and outside supplier billed for the same service
- Increased fees for the patient or resident even if they only used outpatient services when the external supplier billed for Part B
- Less coordination of care and program integrity on account of splitting duties for resident care among numerous outside suppliers
The consolidated billing policy is intended to curb this type of spending and encourage SNFs to focus on the quality of care over quantity of services provided.
Consolidated Billing Meaning and How it Differs From Previous Reimbursement Models
In 1997, Congress passed the Balanced Budget Act, which included requirements for consolidated billing, meaning SNFs would have to submit all Medicare claims for the services provided to their residents. As a result, now all Part A and Part B services are consolidated under a single payment, which is paid directly to the SNF.
In addition, under the new consolidated billing policy, SNFs are only reimbursed for services that are deemed reasonable and necessary by the CMS. So teams now need to focus on providing quality care rather than quantity of services and they no longer have a financial incentive to provide more ancillary services than what is actually needed for the long term care resident’s care.
In addition to what is consolidated billing, a common question is: what services are covered under consolidated billing? The quick answer is that all nursing home stays and services covered by Medicare will fall under consolidated billing. So as long as a long term care resident has a Medicare Part A approved SNF stay, the services they receive will be covered under consolidated billing.
Meanwhile, some of the services that are excluded from SNF consolidated billing include:
- Services provided by
- Physician assistants under a physician’s supervision
- Nurse practitioners and clinical specialists working with a physician
- Certified nurse-midwives
- Certified registered nurse anaesthetists
- 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
Contact us here if you would like to test drive an EHR built specifically with consolidated billing in mind.
Consolidated Billing SNF Reimbursements: 6 Tips for External Service Providers
As was noted above, consolidated billing SNF reimbursement changes were meant to prevent the disruption of care coordination, reduce the cases of duplicate billing, and help patients and residents avoid increased fees. Having defined what is consolidated billing, it is also worth mentioning the effect this combined invoice has had on long term care. Some noteworthy features include:
- SNF consolidated billing is vital for the SNF PPS (Prospective Payment System) because it lumps together all of the services that qualify for PPS payment into a single, easy-to-manage package.
- Consolidated billing has spared beneficiaries covered in a Medicare Part A stay from having to incur out-of-pocket financial liability for Part B deductibles and coinsurance.
- Consolidated billing, meaning the SNF consolidated billing system, has done away with the possibility of submitting two bills for one service, one bill for the Part A fiscal intermediary (FI) by the SNF, and then a second bill for the Part B carrier from an outside supplier.
- Consolidated billing has helped SNFs fulfill their existing duty to oversee and coordinate each resident’s total care package.
As we mentioned in regards to consolidated billing, Medicare coverage today means that a long term care resident is automatically under consolidated billing. If MDS nurses need to determine whether or not a resident is covered by Medicare, they can visit this CMS page or refer to their long term care EHR, which should come with electronic eligibility verification.
So what actions can external service providers take to ensure they maximize their reimbursements under SNF consolidated billing? PubMed Central offers the following tips:
- Always have an updated list of the drugs and services included and excluded from SNF consolidated billing: External service providers who keep track of which services are no longer covered under consolidated billing will save themselves time and money by noting the services or medications for which they cannot bill SNFs.
- Determine if a patient is a SNF resident during appointment scheduling: Only residents of SNFs are covered under SNF consolidated billing. Appointment schedulers should be trained to verify a patient’s status and only book patients who are currently residing in a SNF.
- Coordinate with local SNFs to educate patients, families, and staff about the need to inform external service providers about the patient’s Medicare status: If an external service provider is not aware that a patient has been discharged from the SNF or that they are no longer covered by Medicare, they may continue to bill the SNF for services. It’s important that all parties are on the same page when it comes to consolidated billing to avoid any confusion or incorrect billing claims.
- Alert SNFs about the services and charges of services prior to providing said services: This enables the SNF to determine if the services are covered under consolidated billing or not. If they are not, the patient may be responsible for paying out of pocket.
- Monitor invoices to SNFs and prompt them when needed: All external service providers need to be reimbursed for their services, and it is their responsibility to correctly invoice SNFs and prompt them with reminders in the event of delays in payments.
- Define—in writing—the payment arrangements and agreements with local SNFs: External service providers should have a written agreement that defines the payment arrangements with local SNFs. This protects both parties in the event of any misunderstandings or payment discrepancies.
The Answer to What Is Consolidated Billing?
Consolidated billing is a system in which all care services that qualify for payment under the Prospective Payment System (PPS) are lumped together into a single package. This lump sum includes all room and board charges as well as all ancillary services, such as physical therapy, occupational therapy, and speech therapy. This system has spared beneficiaries covered by Medicare Part A stay from having to incur out-of-pocket financial liability for Part B deductibles and coinsurance.
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