Do Physicians/QHPs Really Need a Written Agreement With Skilled Nursing Facilities?

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Skilled nursing facilities (SNFs) need the expertise of wound/ulcer management physicians and/or other qualified healthcare professionals (QHPs). Similarly, physicians/QHPs who enjoy managing wounds/ulcers of geriatric patients find great satisfaction and newfound patients by working in SNFs. However, physicians/QHPs may not realize that the Medicare payment system for SNFs and physicians/QHPs are different. Therefore, physicians/QHPs often begin working in SNFs without a written agreement.

The real-life consultation below describes what usually happens when a physician/QHP does not have a written agreement prior to beginning work in a SNF.

Scenario:

Dr. X, a wound/ulcer management specialist, learned that a SNF near his office needed someone to care for its residents with chronic wounds/ulcers. Dr. X contacted the SNF’s administrator and agreed to provide services in the facility every Wednesday.

Dr. X assumed that he would bill the payers directly, just like he does when he works on Thursday in the local hospital owned outpatient wound/ulcer management provider-based department (PBD).

After 6 months of billing Medicare for his work in the SNF, Dr. X decided to audit his Medicare payments for that work. To his surprise, he was not paid for several of the very same procedure codes that he was consistently paid to perform in the PBD.

That is when Dr. X contacted this consultant.

Facts to Consider:

·      Most services provided to residents in a Medicare covered Part A SNF stay are included in a bundled prospective payment to the SNF.

·      The bundled services must be billed in a consolidated bill (CB) by the SNF. The CB eliminates duplicate payments for the same service to the Part B Medicare Administrative Contractor (MAC) by the physician/QHP and to the Part A MAC by the SNF.

·      If the SNF does not have the expertise “in house” to perform services/procedures subject to CB, they may obtain the services “under arrangement” from an outside physician/QHP. In that case, the outside physician/QHP should arrange to bill and receive payment from the SNF for the services/procedures that are subject to CB.

·      Some services/procedures are “excluded” from CB. Those services/procedures should be billed directly to the Part B MACs by the outside physician/QHP.

Consultation:

First, I reviewed Dr. X’s paid and denied claims for the work performed in the SNF. I quickly identified that the procedures that are included in CB were correctly denied and that the procedures excluded from CB were correctly paid.

Second, I taught Dr. X about the four CB files, which are located on the CMS Skilled Nursing Facility Consolidated Billing website.¹ I explained that CB file 1 and CB file 4 are the most important to his work in the SNF.²

·      File 1 contains codes that can be separately billed to the Part B MAC by physicians/QHPs for SNF residents in Part A covered SNF stays. If a code is not found in this file, the service/procedure is subject to CB and Dr. X must look to the SNF for payment.

·      File 4 contains codes that cannot be separately billed to the Part B MAC by physicians/QHPs for SNF residents in Part B non-covered SNF stays. If a code is found in this file, the service/procedure is subject to CB and Dr. X must look to the SNF for payment.
Third, I taught Dr. X how to search CB file 1 for the debridement codes that he reports most often. The surgical debridement codes (11042–11047) were listed in the file, which perfectly aligned with Dr. X’s paid claims. The selective debridement codes (97597–97598) were not listed in the file, which also perfectly aligned with Dr. X’s denied claims.

Similarly, the application of a total contact cast (29445) was listed on the file and paid, while the application of multi-layer compression bandage (29581) was not listed on the file and was not paid. Dr. X found it quite easy to search CB file 1 for all the procedures he performed in the SNF and to identify which ones were contained in the SNF’s CB. After this research, Dr. X concluded, that he had to look to the SNF for payment of 97597–97598 and 29581, plus several other codes, when performed for residents during their Part A covered SNF stays.

Fourth, I taught Dr. X how to search CB file 4 for the same codes:

·      11042–11047 and 29445 were not listed in the file, which meant that Dr. X could bill Medicare for those when performed for residents during their Part B non-covered SNF stays

·      29581 and 97597–97598 were listed in the file, which meant that Dr. X had to look to the SNF for payment when he performed those services for residents during their Part B non-covered SNF stays.

Dr. X then had an “aha!” moment: No matter whether the resident was in a Part A covered stay or a Part B non-covered stay, he had to look to the SNF for the payment of 29581 and 97597–97598, plus several other codes.

Fifth, I explained that every Wednesday the SNF should inform him which residents are subject to CB at that time. In any case, before each encounter, the physician/QHP has the responsibility to ask the SNF, the resident, or the resident’s family member if the resident is in a Part A covered stay or a Part B non-covered stay on that specific day.

Finally, I explained that Dr. X should have a written agreement to bill the SNF for the services/procedures that are under CB. Medicare does not have a standard CB agreement; the physician/QHP and SNF should develop their own agreement. Dr. X asked if the SNF could refuse to reimburse him for CB services. I explained that the SNF risks being found in violation of the terms of their Medicare provider agreement if they refuse to reimburse physicians/QHPs for procedures performed that are subject to CB.

Summary:

Physicians/QHPs with wound/ulcer management expertise can successfully provide services/procedures to residents in a SNF if he/she enters into a written agreement with the SNF administrator before they begin working in the facility. Then before each resident encounter, the physician/QHP should identify if the resident is in a Part A covered stay or in a Part B non-covered stay. After each resident encounter, the physician/QHP should identify if the services/procedures provided are included in CB—if so, the physician/QHP should bill the SNF per the terms of the written agreement with the SNF; if no, the physician/QHP should bill his/her Part B MAC.

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.

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References
1. Centers for Medicare and Medicaid Services. SNF Consolidated Billing. Last accessed July 8, 2022.
2. Centers for Medicare and Medicaid Services. Four Part A and Part B SNF Consolidated Billing Files. Last accessed July 8, 2022.