DEPARTMENTS: PAYMENT STRATEGIES
Although the concept of consolidated billing in skilled nursing facilities (SNFs) has been in place for many years, wound care physicians and other qualified healthcare professionals (QHPs) as well as hospital-owned outpatient wound management provider-based departments (PBDs) continue to be mystified by this payment system regulation. The SNF consolidated billing payment concept is relatively simple: it is like the Medicare severity diagnosis-related group payment system for acute care hospitals. The SNF must pay for all Medicare-covered services a patient receives during a covered Medicare Part A stay. However, as with all regulations, there are a few exceptions.
Therefore, wound management stakeholders continue to have difficulty determining which wound-affiliated services and procedures are included in SNF consolidated billing and which are exceptions. The Centers for Medicare & Medicaid Services (CMS) publishes several files that should help wound management professionals and PBDs.
This article discusses how (1) physicians/QHPs and (2) PBDs should use these important files to determine if wound management services and procedures are included in or excluded from SNF consolidated billing. This author highly recommends that readers practice navigating the SNF consolidated billing website as they read the steps listed below. Once physicians/QHPs and PBDs understand how to determine the services and procedures that are included in consolidated billing, they can easily itemize the services and procedures that will be charged to the SNF. Then the wound management stakeholders and the SNF should enter into agreements that specify how the SNF will remunerate the wound management stakeholders. NOTE: Because the SNF consolidated billing reference files for physicians/QHPs are different than the reference files for PBDs, this article discusses them separately.
Are Professional Services Included or Excluded in SNF Consolidated Billing?
When physicians/QHPs provide wound management services and/or procedures to Medicare beneficiaries in a Part A-covered SNF stay, they should
- Identify the appropriate code(s) describing the wound management service and/or procedure performed, for example, debridement of subcutaneous tissue (11042/11045) or removal of devitalized tissue (97597/97598).
- Visit the CMS SNF consolidated billing website: www.cms.gov/Medicare/Billing/SNFConsolidatedBilling.
- Select the “Part B MAC Update” tab for the year the service is provided from the menu on the left side.
- Select “File 1—Part A Stay—Physician Services” and search the file for the applicable code(s). If the service or procedure code appears on File 1, it is excluded from SNF consolidated billing. For example, 11042 and 11045 are listed on File 1, which means those debridement codes are excluded from SNF consolidated billing, but 97597 and 97598 are not listed on File 1, which means those removals of devitalized tissue codes are included in SNF consolidated billing.
- Submit claim with the excluded code(s) (eg, 11042/11045) to the Medicare Administrative Contractor (MAC) that processes your Medicare claims.
- Arrange to bill and receive payment for code(s) (eg, 97597/97598) included in consolidated billing from the SNF where the services were performed.
Physical therapy services are always included in Medicare Part A–covered SNF stays. In addition, when physical therapists provide wound management services and procedures for Medicare beneficiaries in Part B-covered SNF stays, they should follow steps 1 to 3 above and then
- 4. Select “File 4—Part B Stay Only—Therapy Services” and search the file for the applicable code(s). Some of the most common wound management codes in File 4 are 97597/97598, negative-pressure wound therapy durable medical equipment (97605/97606), and low-frequency nonthermal ultrasound (97610). NOTE: The services represented by codes in File 4 are the only services subject to SNF consolidated billing for Medicare beneficiaries in a SNF Part B stay.
- 5. Because the Part B MAC will always deny the codes listed in File 4 for Medicare beneficiaries during their SNF Part B stay, these services and procedures must be provided and billed under your arrangement with the SNF.
Are PBD Services Included in or Excluded from SNF Consolidated Billing?
- Identify the appropriate code(s) that describes the wound management service and/or procedure performed, for example, debridement of subcutaneous tissue (11042/11045), or removal of devitalized tissue (97597/97598).
- Visit the CMS SNF consolidated billing website listed above.
- Select the “Part A MAC Update” tab for the year the service is provided from the menu on the left side.
- Select “Annual SNF Consolidated Billing HCPCS Updates” from the "Downloads" section. This annual update file contains the complete list of Healthcare Common Procedure Coding System codes, which are sorted into five Major Categories:
- Major Category I: Beyond the Scope of a SNF
- Major Category II: Provided to End-Stage Renal Disease or Hospice Beneficiaries
- Major Category III: Provided by Any Entity Except a SNF
- Major Category IV: Screening or Preventive Services
- Major Category V: Therapy
- Search the file for the applicable service and/or procedure code. Then look in Column D to see if the word “INCLUSION” is listed for that code. If “INCLUSION” is not listed in Column D, the service and/or procedures is excluded from SNF consolidated billing.
- Submit a claim with the excluded code(s) (eg, 11042/11045) to the MAC that processes your Medicare claims.
- Arrange to bill and receive payment from the SNF if “INCLUSION” is listed in Column D for services and procedures that are included in SNF consolidated billing. Examples: application of rigid leg cast (29445), application of paste boot (29580), 97597/97598, negative-pressure wound therapy durable medical equipment (97605/97606), and negative-pressure wound therapy disposable (97607/97608).
The CMS releases quarterly change requests if codes are added to or removed from the SNF consolidated billing lists. Those changes are then added to the annual file updates. Periodically, the annual file will be updated to correct errors, including an explanation of the update. Codes that have been deleted and are no longer payable beyond their grace period will remain on the file in order to allow claims with earlier dates of service to be paid appropriately.
Wound management physicians, QHPs, and PBDs are wonderful assets to Medicare beneficiaries who have chronic wounds and are in SNFs. However, the SNF consolidated billing system prevents these wound management stakeholders from billing all services and procedures to the Medicare Part B program.
Therefore, wound management stakeholders must exercise caution when they market their services to the SNF administration. They should explain that they (1) must bill and collect payment from the SNF for the services and procedures that are on the SNF consolidated billing list and (2) will bill the Medicare Part B program for all other services and procedures.