CMS Pub. 100-02, ch. 8, § 20.3.1

Under the Social Security Act at §§1819(h) and 1919(h) and CMS’ regulations at 42 CFR

488.417, CMS may impose a denial of payment for new admissions (DPNA) against a

SNF when CMS finds that a facility is not in substantial compliance with requirements of

participation. Further, the regulations require CMS to impose a DPNA when a SNF (1)

fails to be in substantial compliance for three months after the last day of the survey

identifying the noncompliance, or (2) is found to have provided substandard quality of

care on the last three consecutive standard surveys. A/B MACs (A) are responsible for

applying these payment sanctions to new SNF admissions resulting from adverse survey

findings.

The SNFs under a denial of payment sanction are still considered Medicare-participating

providers.

Imposition of a payment ban on SNF new admissions is described in 42 CFR 488.401. In

applying payment bans, refer to the following definition of “new admission” to a SNF

contained in 42 CFR 488.401.

[a] resident who is admitted to the facility on or after the effective date of a denial

of payment remedy and, if previously admitted, has been discharged before that

effective date. Residents admitted before the effective date of the denial of

payment, and taking temporary leave, are not considered new admissions, nor

subject to the denial of payment.

“Temporary leave” is defined as residents who leave temporarily for any reason. This

definition would include both beneficiaries who are out of the SNF at midnight but who

later return to the SNF and beneficiaries who require inpatient hospitalization and return

to the SNF directly upon hospital discharge. If residents were not subject to a denial of

payment when they went on temporary leave, they are not, upon their return, considered

new admissions for the purposes of the denial of payment. A beneficiary is considered

discharged when he/she leaves the facility with no expectation of return, e.g., a

beneficiary transferred to another SNF or discharged to home, etc.

Beneficiaries admitted before the effective date of the denial of payment and taking

temporary leave, whether to receive inpatient hospital care, outpatient services, or as

therapeutic leave, are not considered new admissions, and are not subject to the denial of

payment upon return. This policy applies even if there are multiple hospitalizations and

returns to the SNF during the period sanctions are in effect. However, a resident who is

discharged to a different SNF and is later readmitted to the original SNF, currently under

a payment ban, will be subject to the denial of payment sanction. Similarly, a beneficiary

who is discharged from an acute care hospital to a long-term rehabilitation hospital, a

wing bed, or a hospice would be considered a new admission upon return to the original

SNF.

Beneficiaries enrolled through cost-based HMOs are subject to the same requirements as

fee-for-service beneficiaries.

Hospices contract with SNFs for services related to the beneficiary’s terminal condition.

These bills are not processed by the A/B MAC (A) or (HHH). However, there will be

situations where a beneficiary is admitted as a hospice patient, but later requires daily

skilled care unrelated to the terminal condition. If the beneficiary was initially admitted

as a hospice patient prior to the date sanctions were imposed, and meets the requirements

for Part A coverage; sanctions will not be applicable. Benefits will be paid under SNF

PPS from the first date the beneficiary qualifies for Medicare Part A for care unrelated to

the terminal condition. The facility must complete the Medicare-required assessments

from the start of care for the unrelated condition.