In skilled nursing facilities, managing reimbursement is often complicated by Medicare billing regulations, bundled service reimbursement, and compliance issues. One of the most critical elements of managing reimbursement is SNF Consolidated Billing, which outlines how skilled nursing facility services are billed and reimbursed through Medicare Part A, as well as how those services are coordinated.
Billing errors made by skilled nursing facilities can result in quickly escalating issues with denied claims, delayed reimbursements, compliance liability, and lost revenue. As such, it is critical that SNFs have well-defined and streamlined billing processes in place to ensure that their cash flow remains stable and their overall operation remains efficient.
Under the Medicare consolidated billing program, SNFs are financially liable for a majority of the resident services provided to residents during the resident’s covered stay. In addition to billing exclusions, providers must also understand the applicable coding rules and the submission process for claims to help reduce potentially costly billing errors.
In this guide to SNF Consolidated Billing, you will learn about:
- An Overview of SNF Consolidated Billing
- How SNF Consolidated Billing Works
- Why Accurate SNF Billing is Important for Revenue Cycle Management
- Common Billing Issues Encountered by Skilled Nursing Facilities
- Best Practices for Billing Skilled Nursing Facilities to Medicare
- How MedCare MSO Can Help You Optimize the Revenue Cycle Management Process for Your Skilled Nursing Facility
What is consolidated billing?
SNF Consolidated Billing is a Medicare payment program with the goal of consolidating most of the healthcare services provided to a resident during their Medicare Part A stay into one claim that the skilled nursing facility submits to Medicare.
Under a set of guidelines provided by the Centers for Medicare and Medicaid Services (CMS), skilled nursing facilities are responsible for submitting claims for covered services rendered to their residents while in their facility.
The New Functionality has been established for the purpose of:
- To simplify the reimbursement process for Medicare.
- To prevent multiple claims for the same service.
- To improve the coordination of care.
- To streamline the payment process.
Under Medicare consolidated billing, outside providers usually bill the SNF directly instead of submitting claims separately to Medicare.
How SNF Consolidated Billing Works
The skilled nursing facility (SNF) is the primary billing entity for the patient during a Medicare Part A-covered stay in SNF care. The following are the types of services normally included on an SNF’s consolidated billing:
Services Usually Included in Consolidated Billing
- Skilled nursing care
- Therapy services
- Medical supplies
- Diagnostic testing
- Prescription drugs
- Laboratory service
Services Commonly Excluded
Certain services are typically not included in an SNF’s consolidated billing, such as:
- Physician services
- Ambulance transportation
- Dialysis
- Some high-cost outpatient hospital procedures
Why Accurate SNF Billing Matters for Revenue Cycle Management
The accuracy of the Skilled Nursing Facility’s (SNF’s) billing can influence the operation and success of an organization’s overall revenue cycle. Simple errors in coding or billing can cause an organization to experience extensive and costly delays in receiving reimbursement from Medicare.
Reduces Claim Denials
One of the major benefits of accurate SNF Consolidated Billing is the reduction of denied claims. By submitting accurate claims, providers will improve their first-pass acceptance rate when submitting claims for payment, and, therefore, will receive payment from Medicare more quickly. Some common reasons that claims are denied include;
- Inaccurate billing of a bundled service
- Billing duplicate claims
- Failure to provide documentation
- Errors in coding
- Failure to verify the beneficiary’s eligibility
Improves Cash Flow
Billing delays can be a large disruption to nursing homes and long-term care facilities’ financial stability. When billing teams submit their claims correctly on the first attempt, those teams will have less time spent on rework or appeals processes. Having accurate billing workflows will help to improve:
- Speed of reimbursement
- Performance of the accounts receivable process
- Predictability of revenue
- Efficiency of operations
Strengthens Medicare Compliance
In skilled nursing billing, it’s important to follow proper compliance, especially due to the risk of being reviewed for non-compliance under the Consolidated Billing Regulation by Medicare. The following actions could happen because you did not follow proper compliance:
- Audits
- Payment Recovery
- Penalties
- Regulatory Scrutiny
Common Challenges in Skilled Nursing Facility Billing
So many SNFs are having to deal with consolidated billing requirement complexities these days.
Exclusions to Billing for Services
Figuring out what services are excluded from consolidated billing and what services need to continue to be bundled together has proven to be one of the largest obstacles they have to face as part of their day-to-day business.
Billing departments will have to stay up-to-date with CMS updates as well as the most current exclusion lists.
Billing for Services Provided by Outside Providers
In some cases, therapy, laboratory, and specialty providers mistakenly bill Medicare directly for their services rather than submitting claims directly to the SNF, and as a result:
- Duplicate billing can occur
- Conflicts over payment can occur
- Claims can be rejected
- Administrative delays occur
Coding Mistakes
Many claims are delayed or denied due to coding errors (incorrect ICD-10, CPT, or HCPCS codes). Because manually coding claims creates an increased chance for human error, this situation occurs more frequently when an SNF has large claim volumes to process.
Best Practices for Accurate Medicare Consolidated Billing
Both process improvement and the adoption of technology are required to improve billing accuracy.
Use Billing Automation Tools
Modern Healthcare has developed billing automation tools to:
- Ensure a patient’s Medicare eligibility and benefits have been verified prior to submitting a claim, reducing denials due to ineligible patients.
- Ensure that the ICD-10, CPT, and HCPCS codes used on any claim are coded correctly and follow the rules for submitting to Medicare.
- Detect any errors, missing information, or formatting errors on a claim before submitting it for payment.
- Track denied claims and look for patterns to find recurring problems in your billing and identify ways to improve reimbursement processes and workflow.
- Post payments received to patient accounts and reconcile those accounts. This will help to improve the accuracy of your financial statement and of your reports.
Train Billing Teams Regularly
Changes to CMS billing criteria happen often, which makes it important for staff members to receive training regarding:
- Medicare billings updates — Up-to-date information needs to be provided to your staff on a regular basis about updated CMS regulations affecting reimbursement.
- Coding Compliance — Work with your team to improve accuracy in billing coding to reduce the amount of billing denials and audits.
- Consolidated Billing Exclusions — Ensure the staff know which services are excluded from SNF consolidated billing.
- Documentation — Be sure that Clinical Documentation supports the accuracy of the bill coding and any services billed to Medicare.
- Denial Prevention — Teach billing staff on how to find common billing mistakes before submitting a claim.
Conduct Routine Audits
Internal billing audits are beneficial in identifying:
- Revenue leakage – This includes discovering charges that were missed, underpaid, or reimbursement opportunities that were overlooked.
- Coding inconsistencies – Correcting code errors that affect claims’ proper handling and accurate payment, and regulations.
- Duplicate billing – Helping to minimize instances where more than one claim has been submitted for a service.
- Compliance issues – This identifies areas of improper billing practices that do not follow laws established by CMS.
How MedCare MSO Helps Skilled Nursing Facilities
MedCare MSO provides nursing homes and long-term care facilities with streamlined billing processes to better manage relationships with patients and ultimately increase profit margin from the same practice. Substantial improvements in performance are achieved through the utilization of our services, which consist of:
- Decreased Medicare Denials
- Increased Billing Accuracy
- More Efficient Claims Submission
- Enhanced Compliance
- Quicker Reimbursements
- Improved Revenue Cycle Performance
Service Offerings:
- Skilled Nursing Facility Billing Services
- AI Medical Coding
- Revenue Cycle Management
- Medical Billing Software Support
- Denial Management
- Compliance Monitoring
Final Thoughts
The effective use of SNF Consolidated Billing improves the revenue cycle management for skilled nursing facilities (SNFs).
By improving the accuracy of billing information, minimizing denials, increasing compliance with Medicare regulations, and streamlining the reimbursement workflow, skilled nursing facilities can maintain revenue and create better operational performance.
With Medicare regulations changing, skilled nursing facilities that invest in billing processes, employee training, and advanced revenue cycle management (RCM) programs will be in the best financial situation to succeed in the long-term.
Partnering with an experienced RCM services provider such as MedCare MSO is an effective way for skilled nursing facilities to successfully implement the complex Medicare services billing regulations and maximize reimbursement opportunities.
