<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=206011759877508&amp;ev=PageView&amp;noscript=1">
small eSolutions logo
skilled nursing billing guide on laptop screen

Getting Started with SNF Billing

A Skilled Nursing Facility’s Guide to Getting Started with Medicare Billing

Congratulations! You’re ready to start billing Medicare. Now what? For those Skilled Nursing Facilities new to Medicare, making heads or tails out of where to put your focus and resources might feel overwhelming. This guide explores how to jump into Medicare billing with confidence.

down-scroll-arrow-sm.png
Array of paper airplanes with distinguishing red airplane at the front

Medicare is Different.

Billing Medicare is one of the most complex, important tasks a biller will undertake. The process is distinctly different from billing commercial payers, with Medicare-specific rules and requirements.

Globe and orb icon graphic

Get Ready to Submit Claims

In order to submit Medicare claims, your organization and your individual billing team members must have the appropriate IDs established. Individuals who bill or work Medicare claims need a DDE/FISS ID, which is always tied to that individual, no matter where he or she works. Additionally, each facility (or facilities if you have multiple locations) needs a Medicare Submitter ID.

This is where your Medicare Network Service Vendor comes in. You’ll use a certified Medicare Network Service Vendor to set up and manage multiple IDs and ensure smooth access to DDE/FISS.

SNFs may submit claims manually or use Electronic Data Interchange (EDI). Submitting claims electronically requires an EDI agreement with Medicare. Some SNFs choose an RCM partner who has direct access to DDE/FISS and can securely transfer claim files to Medicare. RCM partners may also possess technology that analyzes claims before submission to ensure they’re complete and error-free, whether it’s a batch file or single claim. This technology is highly advantageous to busy billing departments, as it identifies claims Medicare didn’t accept and highlights errors you can resolve quickly.

Lifecycle of a Medicare claim timeline

The Lifecycle of a Medicare Claim

Like other types of claims, a Medicare claim has a specific cycle it follows from time of service to adjudication.

A Medicare claim starts with you, the provider. SNFs may use a variety of technology solutions to streamline operations, verify eligibility and generate claim files. Once you submit Medicare claims, you’ll want to keep an eye on their reimbursement cycle status. When a claim is in “Suspense”, it usually means no action is needed. However, if Medicare finds something wrong with a claim, it may take a number of paths while in Suspense.

Medicare assigns a status and location code to each claim that indicates exactly what’s happening. These codes tell you if and when a claim is going to be paid or denied, or alert you to fix an issue.

Here are a few common claim statuses:

Blue circle with an

Suspense

Medicare is processing the claim normally through the system and should pay without intervention.

Blue circle with an

Rejected

Rejected claims contain errors Medicare refuses to process. Patient eligibility issues are the primary cause of rejected claims.

Blue circle with

Additional Development Request (ADR)

Medicare would like additional medical documentation to ensure payment is appropriate. ADRs are also known as Medicare Records Requests, Prepay ADRs, or SB6001.

Blue circle with a

Denied

Medicare has adjudicated the claim and refuses to pay. Providers may appeal a denied claim through the formal appeals process. Failure to respond in a timely fashion to an ADR is the most common reason for claim denials.

Blue circle with a

Return to Provider (RTP)

Medicare has returned the claim to a provider because there’s some level of error. RTP claims aren’t physically returned to you. These claims are placed in the “T” file and will remain there until you correct them.

Blue circle with a

Paid

Indicates a claim was fully paid or partially paid. A partially paid claim contains denied line items. These line items don’t require appeal, but they do require you to file a replacement claim within Medicare filing parameters.

Blue strip across page with icons of money with wings

Common Pitfalls

One of the most common pitfalls of SNF billing is lack of a thorough patient intake process that properly addresses referrals, eligibility and prior authorization. Learning everything you can about the patient’s coverage at intake lays the foundation for timely payment.

For example, you may assume a patient is a Medicare beneficiary, only to discover later that he or she has an HMO or Medicare Advantage Plan. Unfortunately, payers won’t allow you to retroactively verify eligibility or obtain prior authorization, so you’re stuck holding the bag for those dates of service. This pitfall is all too common, yet thankfully avoidable with thorough intake procedures.

In other words, work the suspense claims to completion so you’re not leaving money on the table.

Although your patient accounting software is a powerful tool, it’s likely limited in its ability to analyze and report on the status of submitted claims. Providers often don’t work RTP or ADR claims because they lack visibility into the claims cycle. When these claims are discovered, worked on, and submitted, your organization collects the associated revenue.

Your patient accounting software cannot help you work suspense claims. Your Medicare Network Service Vendor will provide the Medicare portal needed to successfully address RTP and ADR claims.

The Bipartisan Budget Act of 2018 repealed Medicare’s outpatient therapy caps. The legislation removed therapy caps for all physical therapy (PT), occupational therapy (OT), and speech-language pathology (ST) services provided after Dec. 31, 2017. Providers must continue to attach KX modifiers to the claim for therapy service exceptions. Using the KX modifier justifies the services are medically necessary and supported by documentation in the medical record.

This legislation also lowered the threshold for potential targeted medical reviews from $3,700 to $3,000. What does this mean for SNFs? Billed PT and ST combined services exceeding $3,000 and OT services exceeding $3,000 may be subject to targeted review. Your billing staff should carefully watch claim status for indication of prepayment review and have clear procedures to respond to requests on time.

Icon of hand writing on a form coming out of a laptop screen
blue strip across page with icons of a graph, lightbulb, and gears
Hands cradling a lightbulb with a gear shape on top

Turning Medicare Data into Action

Medicare is an incredibly complicated system that generates vast amounts of data. This data generally does not receive the in-depth analysis it should, and without proper insight into this data, you can’t improve billing procedures. If you’re willing to crunch the numbers, the benefits to your revenue cycle can be transformative.

Patient accounting software and Electronic Health Record (EHR) systems offer reporting that’s vital to your organization. But these systems typically cannot handle Medicare payment data analysis and accurate reporting that directs you toward action. This is why an investment in the right RCM technology provides a high return for SNFs.

group of people working around a seated woman and looking at a tablet

Track Actionable Data for a Healthy Business

Tracking as much claim data as possible is beneficial for any SNF. However, there are a couple key metrics all SNFs should monitor.

Key Metric 1: Days in Accounts Receivable

SNFs should track metrics that directly impact cash flow, especially the number of days in accounts receivable (A/R). SNFs and other Medicare providers sometimes believe they’re getting paid within the 14-day Medicare payment window. It’s important for your organization to track the time between date of service and actual submission of the claim. Any billing delays or inefficiencies during this timeframe can substantially impact full aging of your cash flow.

GOAL: SNFs should strive to bill claims within two weeks of the last date of service. Use the following guidelines to gauge performance:
graphic showing days in accounts receivable

If you have outstanding claims more than 40 or 50 days out, it’s clear your process has problems. An RCM technology partner can offer reporting on days in A/R and alert you to cash flow trends that you probably hadn’t noticed.

The number of claims paid 60 days or more after discharge is a true indicator of your business health. If this number is high, it creates a detrimental lag in cash flow. Working to decrease claims that fall into this category will dramatically improve reimbursement rates and decrease days in A/R.

icon of an eye on a form coming out of a laptop

Key Metric 2: Top 10 Reason Codes

Detecting claim trends in the DDE is impossible when you can view only one claim at a time. A successful claims resolution strategy provides insight into why claims are rejected, denied or returned.

Identifying the top 10 reason codes for rejections, denials and RTPs will maximize timely recovery and reimbursement levels, allowing you to take steps to protect revenue. According to MGMA, the cost to rework a claim is $25. If your team reworks 100 claims a month, that’s $2,500 plus wasted staff time. That’s expensive business!

A viable RCM solution helps you identify recurring problems using reason code reporting. You can then work with your team to create an action plan and make workflow changes that remove road blocks and improve cash flow.

The Complexities of SNF Billing

Eligiblity and Coverage Requirements

Eligibility is the foundation for proper reimbursement.

Patients must meet two requirements before Medicare will pay for skilled nursing care:

  • SNF admission must follow a minimum hospital stay of three consecutive days. The patient must have been officially admitted to the hospital, not just held under observation.

  • SNF admissions must be within 30 days of hospital discharge. If a patient leaves the SNF after coverage begins, but is readmitted within 30 days, that second period in the SNF will also be covered by Medicare.


SNF Three-Day Rule Waiver

Medicare’s Shared Savings Program Accountable Care Organizations Model allows a waiver of the SNF three-day hospital stay rule. Patients whose doctor participates in the Model can be admitted to a SNF directly from their home or doctor’s office.

icon of a hand holding a magnifying glass with a dollar sign in the center

SNF Benefit Period

The SNF Benefit Period is important because SNFs sometimes submit claims they don’t expect payment for, in order to ensure the Benefit Period is adequately tracked in the Common Working File (CWF).

So how do SNFs keep track of qualified hospital stays, waivers and benefit periods? Additionally, how do they monitor changing coverage status on multiple patients?

According to the 2016 CAQH Index, it costs $8.39 to manually verify a patient’s eligibility versus $.49 to verify it electronically. Partnering with an RCM vendor who offers advanced eligibility verification saves significant time and money by detecting the following:

  • Beneficiary and subscriber verification
  • Eligibility and benefits
  • Deductible data
  • Coverage changes
  • Discrepancies in patient information like name, date of birth, personal identifiers, gender, etc.

Many HHAs, especially ones that are still billing manually through the Medicare system, have serious obstacles to finding and analyzing RAP data. Avoid RAP pitfalls and improve cash flow by choosing an RCM partner that closely tracks RAPs at risk and canceled RAPs.

A process that regularly checks eligibility and tracks patient coverage is beneficial since changes in eligibility are common among SNF residents. Doing this will result in big reimbursement wins.

Regularly scheduled batch eligibility verification at the right time can also uncover data that allows you to proactively reveal discrepancies in patient coverage, ultimately preventing denied claims and write-offs.

icon of an application window with a claw and gears in it

Medicare Secondary Payer Claims

Medicare Secondary Payer (MSP) claims are those claims where the beneficiary is covered by group insurance, Workers’ Compensation, or other third-party providers. Medicare doesn’t accept primary payer responsibility for patients who have other payer benefits. Claims that include MSP information must be submitted either directly or electronically to Medicare.

Because billing secondary payers adds more complexity to the billing process, many SNFs don’t accept patients with active secondary payers. If SNFs choose not to accept MSP patients, they may miss opportunities to generate revenue. However, there are RCM vendors who automate MSP billing and offer reporting on crossover claims, showing SNFs when and where to take action so nothing slips through the cracks.

Hospital Readmissions within 30 Days

For many years, Medicare has required hospitals to reduce their 30-day readmission rates or face potential penalties. SNFs and other post-acute care providers are now required to make concerted efforts to reduce readmissions, just like hospitals. This means SNFs must focus on keeping patients as healthy as possible to avoid hospital readmission.

CMS publicizes SNF quality data, including 30-day hospital readmission rates, and this information is included in the public Five-Star Ratings information. In addition to this information being public, SNFs face several consequences for high readmission rates and failure to report quality measures, all of which have financial implications. This includes the loss of coveted hospital referrals, patients who may use readmission data to make decisions about where to receive skilled nursing care, and beginning Oct. 2018, the potential for a two percent Medicare payment reduction.

SNFs must rely more on key data and metrics to reduce readmission rates. It’s never been more important to invest in platforms that continuously measure and report on quality levels, and technology that delivers live updates on patient progress. This includes tools that offer advanced reporting on SNF Medicare claims throughout the entire reimbursement cycle coupled with reports that monitor readmission dates.

icon of a hand pointing to a 4-star rating

star encircled with a wreath

Conclusion

SNFs new to Medicare billing will face challenges related to the complexity of Medicare. Keep these key ideas in mind when navigating new waters:

  • Billing Medicare requires a different process than billing commercial payers
  • It’s important to understand claim statuses and how to handle them
  • Work suspense claims to completion so you don’t leave money on the table
  • Use your claim data to maximize revenue and workflow
  • Strong eligibility verification builds the foundation for reimbursement
  • Monitor hospital readmissions within the 30-day discharge window
eSolutions Logo

About Us

eSolutions is a leading healthcare technology company trusted by thousands of providers and payers throughout the industry. Our best-in-class suite of products provide powerful data analytics and workflow automation that ensure healthcare providers get paid quickly, securely and accurately. eSolutions’ unique platform delivers clear intelligence, allowing providers of all types and sizes to understand their data and use it to make informed decisions.