Do You Have Contracts With Skilled Nursing Facilities?

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Hospital-owned outpatient wound/ulcer management provider-based departments (PBDs), physicians, and other qualified healthcare professionals (QHPs) often market their services to local skilled nursing facilities (SNFs). Months later, after they provided wound/ulcer management services to SNF patients and submitted their claims to Medicare, their finance department uncovers that they lost money.

This month’s Consultation Corner will explain why this happens and how the PBDs, physicians, and QHPs can provide needed care for SNF patients and still receive payment for all the services that are covered by Medicare.

Scenario

PBDs, physicians, and QHPs who specialize in providing wound/ulcer management services often receive; 1) referrals from physicians who are managing the care of patients in SNFs, 2) referrals from SNFs who need assistance managing chronic wounds/ulcers in their communities, and 3) self-referrals from families of patients with chronic wounds/ulcers who need more expertise than the SNF can provide.

Once the PBDs, physicians, and QHPs become aware that SNFs do not always have staff who are trained and experienced in managing wounds and ulcers, they often proactively market their services to the SNF administrators and/or directors of nursing. Because these providers and professionals are accustomed to charging the Medicare Part B program for all their services, they often assume they can do the same when they treat patients in SNFs. Such an arrangement usually sounds great to the SNF executives, and the referrals begin!

Facts to Consider

•    The Medicare Prospective Payment System (PPS) for SNFs pays the facility a bundled payment for nearly all the services provided to patients during their Medicare Part A-covered stay, and for physical, occupational and speech therapy services provided during a non-covered stay. These services must be billed to Medicare by the SNF in one consolidated bill. This process of submitting a single claim to Medicare is referred to as “consolidated billing.”

•    The Medicare Outpatient Prospective Payment System (OPPS) pays PBDs and the Medicare Physician Fee Schedule (MPFS) payment system pays physicians/QHPs for each covered service and/or procedure they provide at each encounter, as long as the service/procedure is not part of a National Correct Coding Initiative (NCCI) payment edit, and is not on the consolidated billing list for SNFs.

•    PBDs, physicians, and QHPs must verify if a service/procedure they provide to a SNF patient should be part of the SNF’s consolidated bill.

•    PBDs, physicians, and QHPs typically submit their claims to Medicare a few days after the patient encounter. SNFs typically submit their claims to Medicare on a monthly basis.

Consultation

When this consultant receives calls from PBDs, physicians, and QHPs who have just learned that Medicare either did not pay them for work they performed or took a repayment, I always ask them a few important questions:

1. When you receive referrals, do you ask if the patient is currently in a SNF, and if so, are they in a Medicare-covered Part A stay or in a non-covered stay?

2. What services/procedures were not paid by or were repaid to Medicare?

3. Do you know if the services you provided should have been included on the SNF’s consolidated bill?

4. Do you have a contract with the SNFs that allows you to bill them for services/procedures that are included in their consolidated billing?

Many of the PBDs, physicians, and QHPs do not know that SNFs are required to: 1) include most services, procedures, and products provided to their Medicare Part A-covered patients on one consolidated bill and 2) bill Medicare for physical, occupational, and speech therapy services provided by any therapist, physician, or QHP during a non-covered stay. In addition, the PBDs, physicians, and QHPs often do not know exactly what services/procedures were either not paid or were repaid; they just know they lost money.

A great place to start, when putting processes in place to prevent this from happening, is during the insurance benefit verification process and the registration process. Unfortunately, most of the PBDs, physicians, and QHPs have not included SNF queries in their insurance benefit verification/registration questions. Therefore, I encourage them to re-educate their staff so that the providers, professionals, coders, and billers will know to ask whether the patient is receiving care in a Medicare Part A-covered SNF stay or in a non-covered SNF stay.
Next, I encourage PBDs, physicians and QHPs to contact their billing department or billing company and to ask for a list of all the codes, for services or procedures provided for SNF patients, that were either not paid or that were repaid. In addition, I ask the PBDs, physicians, and QHPs to make a list of all the codes for the services and procedures they typically perform for SNF patients. Once they have compiled their code list, I educate them on how to locate Medicare’s SNF Consolidated Billing website: https://www.cms.gov/Medicare/Billing/SNFConsolidatedBilling/index.

This site clearly explains the SNF consolidated billing payment system and contains 4 files that PBDs, physicians, and QHPs can use to determine which service/procedure codes they should bill to Medicare, and which services/procedures they should bill to SNFs per their signed contracts: https://www.cms.gov/medicare/snf-consolidated-billing/2020-part-b-mac-update. Because File number 1 and File number 4 are most pertinent for wound/ulcer management services/procedures, we typically review those files together.

•    File 1 pertains to patients in Medicare covered Part A stays. This file lists codes that can be separately billed by PBDs, physicians, and QHPs directly to their Part B Medicare Administrative Contractor (MAC) because the codes fall outside SNF consolidated billing. If the code for a service/procedure is not found in File 1, PBDs, physicians, and QHPs must bill the SNF under the terms of their contract, because their MAC will not pay separately for it outside of the SNF’s consolidated bill.  

Examples of common wound/ulcer management procedures that are not found in File 1 include:
29580        Paste/unna boot
29581        Lower extremity application of strapping
97597        Active wound care, first 20 sq cm
97598        Active wound care, each additional 20 sq cm
97602        Wound(s) care, non-selective
97605        Neg press wound tx DME, <=50 sq cm
97606        Neg press wound tx DME, > 50 sq cm
97607        Neg press wnd tx disposable,  <=50 sq cm
97608        Neg press wound tx disposable, >50 sq cm
97610        Low frequency non-thermal ultrasound

•    File 4 pertains to patients in Medicare Part B non-covered stays. If the code for a service/procedure is found in File 4, PBDs, physicians, and QHPs must bill the SNF under the terms of their contract because their Part B MAC will not pay separately for it outside of the SNF’s consolidated bill.

Examples of common wound/ulcer management procedures that are found in File 4 include:
29580        Paste/unna boot
29581        Lower extremity application of strapping    
97597        Active wound care, first 20 sq cm
97598        Active wound care, each additional 20 sq cm
97602        Wound(s) care, non-selective
97605        Neg press wound tx DME, <= 50 sq cm
97606        Neg press wound tx DME, > 50 sq cm
97610        Low frequency non-thermal ultrasound

As you can see, File 1 and File 4 have opposite usage rules. Therefore, PBDs, physicians, and QHPs often get confused reading and interpreting the codes listed in the files. Actually, I get confused myself. Therefore, before I open the SNF Consolidated Billing files I find it helpful to take a few minutes to review the Part B MAC File Explanation found at: https://www.cms.gov/Medicare/Billing/SNFConsolidatedBilling/FileExplanation. I always recommend that PBDs, physicians, and QHPs also review this explanation of the 4 files before they proceed with their SNF Consolidated Billing research.

By the time we finish researching Files 1 and 4, the PBDs, physicians, and QHPs understand why they need to have contracts with SNFs for services/procedures included in SNF consolidated billing. However, they always ask me “then why does my MAC often pay for the services that the SNFs should include in their consolidated bills?”

The answer is quite simple. Most of the time the PBDs’, physicians’ and QHPs’ claims are submitted to the MACs before the SNFs submit their claims. Because the MACs do not yet know that the patients are in SNFs, they pay the claims. Then when the SNFs submit their claims, the MACs realize they should not have paid the claims to the PBDs, physicians, and QHPs and they issue repayments for those claims. If the revenue cycle team does not inform the PBDs, physicians, and QHPs about the repayments, they think they received payment for all their charges.

I usually end the consultation by recommending that the PBDs, physicians, and QHPs request that their billing departments or billing companies keep them informed about claims that are not paid or that are repaid. Then they will be able to catch problems and refine their processes before they lose a large amount of money.

Summary

PBDs, physicians, and QHPs who intend to provide wound/ulcer management services/procedures to patients who are in a SNF, should refine their processes by:

•    Negotiating contracts with SNFs to pay them for services/procedures that must be included in the SNFs’ consolidated bills

•    Refining their insurance benefit verification and registration processes to identify whether patients are in a Medicare-covered Part A SNF stay or in non-covered Part B SNF stay; this should be done prior to every encounter

•    Ensuring that the billers know when an invoice should be submitted to a SNF vs. when a claim should be submitted to Medicare

Kathleen D. Schaum oversees her own consulting business and is a founding member of the Today’s Wound Clinic editorial advisory board. She can be reached for consultation and questions at kathleendschaum@bellsouth.net.