Medicare provides limited coverage for skilled nursing facility (SNF) care for beneficiaries who meet certain conditions. Navigating Medicare coverage and payments for SNF services can be complex, so it is important to understand the basics.
Medicare Part A Coverage for SNF Care
SNF care is covered under Medicare Part A (Hospital Insurance). For an SNF stay to be covered, the patient must first have a qualifying hospital stay of at least 3 consecutive days, not counting the day they left the hospital. The patient must then be admitted to the SNF within 30 days after leaving the hospital.
In addition, SNF stay has such requirements:
- The patient needs skilled nursing services, physical therapy, occupational therapy, or speech therapy on a daily basis
- These services can only be provided on an inpatient basis in an SNF
- These skilled services are needed for a medical condition that was treated during your qualifying hospital stay or that began while you were receiving SNF care.
If all these requirements are met, Medicare Part A will cover up to 100 days of SNF care per benefit period. It’s important to verify SNF insurance eligibility before admission to ensure coverage. The first 20 days are fully covered, and there is a daily coinsurance charge for days 21-100.
Medicare SNF Coverage Exclusions
Medicare does not cover any SNF care after the 100 days per benefit period is exhausted. At that point, patients would be responsible for all SNF charges out-of-pocket, unless they have a secondary insurance. Medicaid might also cover the stay in an SNF, but not the exact care.
Medicare SNF Benefit Periods
The way that Medicare measures SNF benefits and coverage is through benefit periods rather than calendar years.
The day of the patient hospital or SNF admission marks the start of the benefit period. It ends when there is no hospital or SNF care for 60 consecutive days.
If patients go into an SNF after a qualifying 3-day hospital stay, they remain in the same benefit period until they go 60 days without a hospital or SNF stay.
There is no limit to the number of benefit periods, but each one has a maximum coverage limit of 100 SNF days.
The patient must start a new qualifying hospital stay and meet all the conditions again to renew SNF coverage for another 100 days in a new benefit period.
Understanding how Medicare SNF benefit periods work is key to maximizing your available coverage and managing skilled nursing billing effectively.
Medicare SNF Coverage Example
Here is an example of how SNF benefit periods and coverage days work:
Here’s how SNF benefit periods and coverage days work:
- January 1: Mrs. Jones is admitted to the hospital for 5 days.
- January 5: Mrs. Jones is discharged from the hospital and admitted to an SNF.
- January 25: Mrs. Jones has exhausted her 20 fully covered SNF days.
- April 15: Mrs. Jones reaches day 100 of SNF coverage.
- April 16: Mrs. Jones is now responsible for all SNF charges.
- April 30: Mrs. Jones is discharged from the SNF.
- July 30: Mrs. Jones has gone 60+ days without hospital/SNF care. Her benefit period has now ended.
- November 1: Mrs. Jones has another hospital stay of 4 days.
- November 5: Mrs. Jones is admitted to an SNF, starting a new benefit period.
Her SNF coverage has now reset, and she has up to 100 more SNF days as long as other requirements are met.
Medicare Payments to SNFs Under PDPM
Effective October 2019, Medicare’s SNF Prospective Payment System (PPS) changed from RUG-based payments to a new Patient Driven Payment Model (PDPM). Under PDPM, payment is still made at a predetermined rate, but the way that rate is set has changed significantly.
Key features of the SNF PDPM include:
Payment Based on Clinical Categories
Each patient is classified into a group for each of 5 payment components that reflect different care needs:
- Physical Therapy (PT)
- Occupational Therapy (OT)
- Speech-Language Pathology (SLP)
- Nursing
- Non-Therapy Ancillaries (NTA)
The relevant clinical factors for grouping are diagnosis, functional scores, comorbidities, and certain designated procedures.
Variable Per Diem Rates
- A base payment rate is set for each of the case-mix groups under the 5 payment components.
- Payment rates start higher at the beginning of a stay when care needs are highest.
- The rates then step down to a lower level as the patient theoretically improves.
No Therapy Thresholds or Minutes Required
Unlike with RUGs, the number of therapy minutes provided does not impact payment.
The clinical characteristics of each patient based on the 5 case-mix adjusted components determine the payment.
Consolidated Billing
- Payment for all nursing, therapy, and related services is included in the bundled PDPM per diem rates.
- Only specifically excluded services can be billed separately by other providers.
The PDPM aims to pay based more on patient characteristics versus volume of services delivered. This is meant to encourage efficient, high quality care. Monitoring early impacts of PDPM continues but initial signs suggest positive effects on reducing overutilization.
SNF Services Not Covered by Medicare
Some specific types of care and services that Medicare does not cover in an SNF include:
- Custodial care
- Most dental care
- Eye exams (for prescription glasses)
- Dentures
- Most cosmetic surgery
- Massage therapy
- Routine physical exams
However, some Medicare Part C (Medicare Advantage plans) may cover such care depending on the payer and coverage eligibility.
Knowing what care and services are excluded from SNF coverage under Medicare is important so beneficiaries and their families understand the costs they may incur out-of-pocket during an SNF stay. Having supplemental insurance can help cover some of these non-covered expenses.
Observation Stays
One nuance related to SNF coverage under Medicare involves hospital observation stays. Observation care is used for patients who are not well enough to go home but are not sick enough to be formally admitted.
For SNF coverage purposes:
- Time spent in observation does NOT count towards the prerequisite 3-day hospital stay
- Only inpatient hospital days apply towards meeting this requirement
So if the patient spends 2 days in observation (being admitted for 3 days), he would NOT qualify for SNF coverage.
Appealing Denied SNF Coverage
If Medicare denies coverage for an SNF stay, beneficiaries have the right to appeal the decision. Reasons coverage may be denied include:
- Lack of qualifying 3-day inpatient hospital stay
- Skilled nursing or therapy needs criteria not met
- Services could have been provided in a less intensive setting
- Benefit days already exhausted in the current period
The appeals process for denied SNF coverage includes the following steps:
Step 1: Review the Denial Notice Start by checking the Explanation of Benefits (EOB) to understand why the claim was denied.
Step 2: Prepare the Appeal Documentation Gather all necessary information and prepare an appeal letter or the Redetermination Request form. Include:
- Patient’s full name and MBI number
- Date of service for the disputed claim
- Claim number (found on the Medicare Summary Notice)
- Provider’s name, address, NPI, or PTAN
- Reason for the appeal (e.g., denied coverage for a service)
- Relevant medical records (physician notes, test results)
- A clear explanation of why the decision should be reversed
- Any additional relevant information
You can find the Medicare appeal form here.
Step 3: Submit the Appeal Send the appeal to the Medicare Administrative Contractor (MAC) that processed the claim within 120 days from the denial notice date. Ensure all information is complete and accurate, and record your submission details (date, method, confirmation receipts).
Step 4: Monitor the Medicare Appeal Status Follow up with the MAC to check the appeal status and provide additional information if requested.
Step 5: Review and Act on the Appeal Decision Once a decision is made, review the outcome. If the appeal is successful, ensure the claim is reprocessed correctly. If denied, consider whether further action is feasible.
Step 6: Initiate the Second-Level Appeal If the initial appeal is unsuccessful, file a reconsideration request with a Qualified Independent Contractor (QIC) designated by Medicare within 180 days of the initial decision. Include a comprehensive case summary, new evidence or information, and a clear explanation of why the initial decision was incorrect.
Step 7: Response to Reconsideration Outcome Await the QIC’s decision. If favorable, ensure the claim is reprocessed correctly. If denied, assess the viability of further appeals.
Dealing with Medicare Patients
When handling Medicare patients, billers should first verify the patient’s eligibility to ensure they qualify for coverage. It is crucial to monitor any changes in coverage automatically to stay updated with the latest information. Consider automated software that can help deal with the eligibility and coverage data without putting in extra effort.
Also, confirm the patient’s inpatient versus observation status during hospital stays to determine SNF benefit eligibility.
Understand the patient’s responsibility to avoid potential reimbursement issues in the future.
