The term consolidated billing includes services and/or equipment and supplies that are provided to a resident who is in a Skilled Nursing Facility (SNF) and being billed under Medicare Part A. The regulations outline who is responsible for paying for the services while under Medicare Part A. The consolidated billing rules eliminate the potential for duplicate billing for the same service and also allows the SNF to oversee and coordinate the total package of care that is being provided to the resident.

CMS MLN December 21, 2023 provides an excellent resource and refresher on the rules for consolidated billing in the SNF. The SNF provider must be aware of the changes in consolidated billing requirements over the years. Prior to the Balanced Budget Act of 1997 (BBA) a SNF could provide services to a resident who was under Medicare Part A either by using internal resources, through a transfer agreement with the hospital, or under arrangements with an independent therapist (for physical, occupational or speech therapy services). In these instances, the SNF billed Medicare Part A for the services.

In addition, the SNF could choose to “unbundle” the services, i.e., the SNF could permit an outside supplier to provide the service to the resident and bill directly. In this circumstance, the outside supplier would bill Medicare Part B and the SNF would not have to be involved. This practice was well accepted by the SNF for obvious reasons, however, there were some problems for CMS. These included the potential for duplicate billing (under both Part A and B), increased out-of-pocket liability for the resident including deductible and coinsurance for Part B, and a dispersal of responsibility for care of the resident among various outside suppliers which adversely affected the quality of care and program integrity.

Because of these problems, which were highlighted by the OIG, Congress enacted the Balanced Budget Act of 1997 (BBA) where the requirements for a SNF for consolidated billing (CB) are outlined. Per the BBA CB requirement, a SNF itself must submit all Medicare claims for the services that its residents receive (except for specifically excluded services listed below). CB took effect as each SNF transitioned to the Prospective Payment System (PPS), at the start of the SNF’s first cost reporting period that began on or after July 1, 1998.

The SNF annual update file contains a comprehensive list of HCPCS codes involved in editing institutional claims submitted to A/B MACs for services subject to SNF consolidated billing (CB). The information is outlined in the Major Categories SNF Consolidated Billing.

To summarize, there are a number of services that are excluded from SNF CB. These services remain separately billable to Part B when furnished to a SNF resident by an outside supplier. Bills for these excluded services, when furnished to SNF residents, must contain the SNF’s Medicare provider number. These services are excluded from SNF CB:

  • Physician’s services professional portion (the technical component is subject to the CB).
  • Physician assistants working under physician supervision.
  • Nurse practitioners and clinical nurse specialists working in collaboration with a physician.
  • Qualified psychologists.
  • Mental health counselors (for services provided on or after January 1, 2024).
  • Services described in Section 1861(s)(2)(F) of the Social Security Act i.e. Part B coverage of home dialysis supplies and equipment.
  • Hospice care related to a resident’s terminal condition.
  • An ambulance trip that conveys a beneficiary to the SNF for the initial admission or from the SNF following a final discharge.

The CB excludes services listed above that are performed by the practitioner. The exclusion does not apply to services that are defined as physician “incident to” services.

In order to ensure that your SNF is billing correctly, the billing department should review the CMS resources provided as links throughout this blog: Outreach-and-Education MLN Enrollment Resources.

If you have any questions, the consultants at LW Consulting, Inc. will be happy to talk with you. Please reach out to Kay Hashagen, Senior Consultant at [email protected] or (410) 777-5999.