November 09, 2015
Area(s) of Interest: Payor Issues and Reimbursement Public Payors
Congress enacted the Balanced Budget Act of 1997, Public Law 105-33, Section 4432(b), which contains a consolidated billing requirement for skilled nursing facilities (SNF). Under the consolidated billing requirement, an SNF itself must submit all Medicare claims for the services that its residents receive (except for specifically excluded services listed in files provided by CMS).
To clarify, the professional component, which represents the physician’s interpretation of diagnostic tests, is considered a physician service that can be billed to Medicare by the physician. However, the technical component, which represents the test itself, is considered a diagnostic test that is subject to consolidated billing, and it must be billed to Medicare by the SNF. Because the technical component is already included within Part A’s comprehensive per diem payment to the SNF for the covered stay, an outside entity that actually furnishes the technical component would have to look to the SNF, rather than to Part B or the patient, for payment.
This has been an ongoing issue since consolidated billing began. If the physician is providing the equipment, he must look to the SNF for payment of the technical portion, and bill the contractor for the professional component. In many cases, however, the physician does not have a written agreement with the SNF, which is typically when payment issues arise.
While there is nothing that prevents the physician from taking an SNF that refuses to pay to small claims court, best practice is to enter into an agreement with the SNF before services are provided so it’s clear what the SNF is responsible for and so payment terms are clearly spelled out.
The Centers for Medicare and Medicaid Services (CMS) has published Best Practices Guidelines for SNFs that provide details explaining the process, as well as sample agreements that can be utilized as needed (not required, but helpful). Some of the links in the document may not be up-to-date, but the information can still be located on the CMS website. The California Medical Association would be happy to help find any other information needed.
Practices that have continuing problems with a specific SNF may wish to cut ties and no longer do business with that SNF. Practices also have the option of filing a complaint with CMS through the San Francisco Regional Office at (415) 744-3658 or ROSFOFM@cms.hhs.gov.