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Skilled Nursing Facility Coverage Requirements and Benefit Period
To qualify for Medicare Part A coverage of SNF services, the following conditions must be met:
◘ The beneficiary was an inpatient of a hospital for a medically necessary stay of at least 3 consecutive days;
◘ The beneficiary transferred to a participating SNF within 30 days after discharge from the hospital (unless the beneficiary’s condition makes it medically inappropriate to begin an active course of treatment in a SNF immediately after discharge and it is medically predictable at the time of the hospital discharge the beneficiary will require covered care within a predictable time period);
◘ The beneficiary requires skilled nursing services or skilled rehabilitation services on a daily basis. Skilled services must be:
■ Performed by or under the supervision of professional or technical personnel;
■ Ordered by a physician; and
■ Rendered for an ongoing condition for which the beneficiary had also received inpatient hospital services or for a new condition that arose during the SNF care for that ongoing condition;
◘ As a practical matter, considering economy and efficiency, the daily skilled services can be provided only on an inpatient basis in a SNF; and
◘ The services delivered are reasonable and necessary for the treatment of the beneficiary’s inpatient illness or injury and are reasonable in terms of duration and quantity.
Coverage for care in SNFs is measured in “benefit periods” (sometimes called a “spell of illness”). In each benefit period, Medicare Part A covers up to 20 days in full. After that, Medicare Part A covers an additional 80 days with the beneficiary paying coinsurance for
each day. After 100 days, the SNF coverage available during that benefit period is “exhausted,” and the beneficiary pays for all care, except for certain Medicare Part B services.
A benefit period begins the day the Medicare beneficiary is admitted to a hospital or SNF as an inpatient and ends after the beneficiary has not been in a hospital (or received skilled care in a SNF) for 60 consecutive days. Once the benefit period ends, a new benefit period
begins when the beneficiary has an inpatient admission to a hospital or SNF. New benefit periods do not begin due to a change in diagnosis, condition, or calendar year. Understanding the benefit period is important because SNFs must sometimes submit claims for which they do not expect to receive payment to ensure the benefit period is properly tracked in the Common Working File (CWF).
Medicare Part A Payment
The SNF Prospective Payment System (PPS) pays for all SNF Part A inpatient services. Part A payment is primarily based on the Resource Utilization Group (RUG) assigned to the beneficiary following required Minimum Data Set (MDS) 3.0 assessments. As a part of the
Resident Assessment Instrument (RAI), the MDS 3.0 is a data collection tool that classifies beneficiaries into groups based on the average resources needed to care for someone with similar needs. The MDS 3.0 provides a core set of screening, clinical, and functional status
elements, including common definitions and coding categories. It standardizes communication about resident problems and conditions.
General Payment Tips
• Medicare will not pay under the SNF PPS unless you bill a covered day.
• Ancillary charges are only allowed for covered days and are included in the PPS rate.
Medicare Part B Payment
Medicare Part B may pay for:
◘ Some services provided to beneficiaries residing in a SNF whose benefit period exhausted or who are not otherwise entitled to payment under Part A;
◘ Outpatient services rendered to beneficiaries who are not inpatients of a SNF; and
◘ Services excluded from SNF PPS and SNF consolidated billing.
Consolidated Billing Under the consolidated billing provision, SNF Part A inpatient services include all Medicare Part A services considered within the scope or capability of SNFs. In
some cases, the SNF must obtain some services it does not provide directly. For these services, the SNF must make arrangements to pay for the services and must not bill Medicare separately for those services.
Skilled Nursing and skilled rehabilitation services are those services furnished pursuant to physician orders that:
• Require the skills of qualified technical or professional health personnel, such as registered nurses, licensed practical nurses, physical therapists, occupational therapists, and speech-language pathologists or audiologists; and
• Must be provided directly by or under the general supervision of these skilled nursing or skilled rehabilitation personnel to assure the safety of the beneficiary and to achieve the medically desire result.
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