Each federal fiscal year, the payment rates for Skilled Nursing Facilities (SNF) are increased by the government, in accordance with the SNF market basket index, which takes into account prevailing conditions for medical treatments. The overall system under which payments are made is known as the Prospective Payment System (PPS), and this system is continually adjusted for case mix and for the geographic differences in wages which may be in effect for certain areas of the country. It also considers the current costs of providing routing SNF medical services such as ancillary and capital-related costs.
SNF consolidated billing
The consolidated billing requirement puts the responsibility on the SNF for the complete package of care which residents receive during any covered stay at the facility, as well as the physical, occupational, and speech therapy services which are provided during a non-covered stay. There are a few services which are specifically excluded from this billing schedule, and are payable separately.
Each new fiscal year, the consolidated billing requirements for skilled nursing facilities are carefully reviewed, and this includes billing for occupational therapy, physical therapy, and speech language pathology services. Also reviewed are any specific exclusions which are billable separately including some services which are considered to be “high cost, low probability”, as identified by the Healthcare Common Procedure Coding System (HCPCS).
These categories include customized prosthetic devices, radioisotope services, chemotherapy administration services, and chemotherapy items. The codes which are excluded from the consolidated billing all represent situations which could have major financial impact, because their costs greatly exceed the skilled nursing facility PPS payments.
SNF excluded services
There are several types of services which are specifically excluded from the skilled nursing facility consolidated billing agreement. These services would be separately billable to part B Medicare when furnished by an outside supplier to any resident of a skilled nursing facility. It will still be necessary for these excluded services to contain the SNF’s Medicare provider number, when they are furnished to SNF residents. Here is a listing of most of the excluded services which would have to be handled by separate billing:
- certified nurse midwives
- qualified psychologists
- certified registered nurse anesthetists
- physician services furnished to SNF residents which are not subject to consolidated billing, and must therefore still be billed separately to the part B carrier
- physician assistants working under the supervision of a qualified physician
- hospice care related to some terminal condition of a resident
- ambulance services which transport a patient to the skilled nursing facility, or from the facility after discharge
- all those services described in section 861(s) of the Social Security Act
- nurse practitioners or clinical nurse specialists who are collaborating with a qualified physician.
Physician “incident to” services
The consolidated billing agreement does exclude those types of services described above, but it does not exclude those services known as “incident to” services which are furnished by a third party as an incident to the professional service of the practitioner. These kinds of services furnished by others to residents of a skilled nursing facility are subject to the consolidated billing agreement, and must therefore be billed to Medicare by the SNF itself. Here is a listing of some of those “incident to” services:
- some venous and lymphatic procedures
- magnetic resonance imaging
- emergency services
- radiation therapy services
- cardiac catheterization
- computerized axial tomography
- ambulatory surgery which requires usage of an operating room.
2021 Skilled Nursing Facility PPS unadjusted federal rates per diem
The most important of the services offered by an SNF, along with the federally mandated payment schedules are listed below:
- Physical Therapy for urban centers – $62.04, and for rural centers – $70.72
- Occupational Therapy for urban centers – $57.75, and for rural centers – $64.95
- Speech-Language Pathology for urban centers – $23.16, and for rural centers – $29.18
- Nursing for urban centers – $108.16, and for rural centers – $103.34
- Non-Therapy Ancillaries for urban centers – $81.60, and for rural centers – $77.96
- Non-case mix adjusted for urban centers – $96.85, and for rural centers – 98.64.
The Center for Medicare and Medicaid Services (CMS) reviews all relevant factors, including the historical information, before establishing the initial federal base rates for billing. These rates are periodically updated for inflation and other factors which have a bearing on the billing process, so that the fairest payment rates can always be in effect, and allow SNF’s to remain economically sound.
In this case, the CMS has finalized a market basket increase for 2021 of 2.2%, based on historical data from 2020 as well as a forecast provided by IHS Global Insight. This forecast takes into account the expected increases for routine, ancillary, and capital-related expenses, in order to arrive at the best possible projection of costs and expenses which are likely to be in effect for the coming year.