CMS Pub. 100-04, ch. 6, § 10.1

Section 4432 (b) of the Balanced Budget Act (BBA) requires consolidated billing (CB)

for SNFs. Under the CB requirement, the SNF must submit ALL Medicare claims for

ALL the services that its residents receive under Part A, except for certain excluded

services described in §§20.1 - 20.3, and for all physical, occupational and speech-language pathology services received by residents under Part B (see §20.5). A SNF

resident is defined as a beneficiary who is admitted to a Medicare participating SNF or

the participating, Medicare-certified, distinct part unit (DPU) of a larger institution.

Under the regulations at 42 CFR 411.15(p)(3)(i)-(iv), if such a beneficiary leaves the

facility (or the DPU), the beneficiary’s status as a SNF “resident” for CB purposes (along

with the SNF’s responsibility to furnish or make arrangements for needed services) ends

when any one of the following events occurs:

• The beneficiary is admitted as an inpatient to a Medicare-participating hospital or critical access hospital (CAH), or as a

resident to another SNF;

• The beneficiary receives services from a Medicare-participating

home health agency under a plan of care;

• The beneficiary receives one of the types of outpatient hospital

services that CMS has designated as being exceptionally intensive

(see §20.1.2); or

• The beneficiary is formally discharged (or otherwise departs) from

the SNF or DPU, unless the beneficiary is readmitted (or returns)

to that or another SNF before the following midnight. This

provision is sometimes referred to as the “midnight rule” (see Pub.

100-02, Medicare Benefit Policy Manual, chapter 3, §20.1, which

specifies that an inpatient day “. . . begins at midnight and ends 24

hours later”). A “discharge” from the Medicare-certified DPU

includes situations in which the beneficiary is moved from the

DPU to a Medicare non-certified area within the same institution.

When a beneficiary is absent from the SNF overnight (i.e., the absence from the SNF

spans midnight), the beneficiary’s status as a SNF “resident” for CB purposes would end

upon the point of departure from the SNF (per the above-described “midnight rule”), and

would not resume until the actual point of arrival back at the SNF the next day.

Accordingly, that beneficiary would not be considered a SNF “resident” for CB purposes

between those two points, so that any offsite services furnished during the interim (such

as an overnight sleep study) would not be subject to CB.

It should be noted that the scenarios described in the first three clauses above would

become relevant only if a beneficiary leaves the SNF but then arrives back in that or

another SNF before the following midnight. This is because under the “midnight rule”

discussed in the fourth clause, whenever a beneficiary leaves the SNF but does not arrive

back in that or another SNF later on that same day, the beneficiary’s “resident” status for

CB purposes would end immediately upon departure--before any of the other events

described in the first three clauses could even occur.

By contrast, when a beneficiary does return to that or another SNF by the end of the same

day (a scenario that normally would serve to maintain the beneficiary’s status as a

“resident” of the originating SNF throughout the absence), the occurrence of one of the

intervening events listed in the first three clauses above would nevertheless serve to end

the beneficiary’s “resident” status at that point. For example, when a beneficiary leaves

the SNF to receive outpatient emergency services at the hospital, the emergency services

would never be subject to CB—even in a situation where the beneficiary returns to the

SNF later that same day—because the receipt of the emergency services themselves

under the third clause above would have already served to suspend the beneficiary’s SNF

“resident” status with respect to those services under the regulations at 42 CFR

411.15(p)(3)(iii).

These requirements apply only to Medicare fee-for-service beneficiaries residing in a

participating SNF or DPU.

Claims are submitted to the A/B MAC (A) on the ASC X12 837 institutional format or

Form CMS-1450. All services billed by the SNF (including those furnished under

arrangements with an outside supplier) for a resident of a SNF in a covered Part A stay

are included in the SNF’s Part A bill. If a resident is not in a covered Part A stay (Part A

benefits exhausted, posthospital or level of care requirements not met), the SNF is

required to bill for all physical therapy, occupational therapy, and/or speech-language

pathology services provided to a SNF resident under Part B. The CB provision requires

that effective for services and items furnished on or after July 1, 1998, payment is made

directly to the SNF.

Thus, SNFs are no longer able to “unbundle” services to an outside supplier that can then

submit a separate bill directly to an A/B MAC (B) or DME MAC for residents in a Part A

stay, or for SNF residents receiving physical therapy, occupational therapy, and/or

speech-language pathology services paid under Part B. Instead, the SNF must furnish the

services either directly or under an arrangement with an outside supplier or provider of

services in which the SNF (rather than the supplier or provider of services) bills

Medicare. Medicare does not pay amounts that are due a provider to any other person

under assignment, or power of attorney, or any other direct payment arrangement. As a

result, the outside supplier must look to the SNF (rather than the A/B MAC (A), or (B),

or DME MAC or the beneficiary) for payment. The SNF may collect any applicable

deductible or coinsurance from the beneficiary.

NOTE: The requirements for participation at 42 CFR 483.15(c)(1)(i)(A)-(F) specify the

limited circumstances under which a resident can be involuntarily moved out of a

Medicare-certified SNF or DPU. These circumstances can include situations in which

the resident's health has improved to the point where he or she no longer needs SNF care.

However, if a resident has exhausted Part A benefits but nevertheless continues to require

SNF care, he or she cannot be moved out of the Medicare-certified SNF or DPU for

reasons other than those specified in the regulations. For example, the resident cannot be

moved to avoid the CB requirements, or to establish a new benefit period. The

determination to move the beneficiary out of the SNF or DPU must not be made on the

basis of the beneficiary having exhausted his or her benefits, but rather, on the

beneficiary's lack of further need for SNF care. Once a resident of a Medicare-certified

DPU ceases to require SNF care, he or she may then be moved from the DPU to the

Medicare non-certified area of the institution. As discussed above, such a move would

end the beneficiary's status as a SNF "resident" for CB purposes.

Enforcement of CB is done through editing in Medicare claims processing systems using

lists of Healthcare Common Procedure Coding System (HCPCS) codes that are subject to

the CB provision of SNF PPS. In order to assure proper payment in all settings,

Medicare systems must edit for services, provided to SNF beneficiaries, both included

and excluded from CB. Transmittals with instructions provide updates to previous lists

of the exclusions, and some inclusions, to CB. Such transmittals can be found on the

CMS Web site at: https://www.cms.gov/Regulations-and-

Guidance/Guidance/Manuals/Internet-Only-Manuals-IOMs.html or

http://www.cms.gov/Medicare/Billing/SNFConsolidatedBilling/index.html. Step-by-step

instructions for accessing the exclusion list itself appear in the Medicare Benefit Policy

Manual, Chapter 8, §10.2.

The list of HCPCS codes enforcing CB may be updated each quarter. For the notice on

CB for the quarter beginning January, separate instructions are published for A/B MACs

(A) and A/B MACs (B)/DME MACs. Since this is usually the only quarter in which new

permanent HCPCS codes are produced, this recurring update is referred to as an annual

update. Other updates for the remaining quarters of the year will occur as needed prior to

the next annual update. In lieu of another update, editing based on the prior list of codes

remains in effect. Some non-January quarterly updates may apply to each of A/B MACs

(A) and (HHH) and A/B MACs (B)/DME MACs, and the applicability of the instruction

will be clear in each update. All future updates will be submitted via a Recurring Update

Notification form.

• Effective July 1, 1998, CB became effective for those services and items that were

not specifically excluded by law from the SNF prospective payment system (PPS)

when they were furnished to residents of a SNF in a covered Part A stay and also

includes physical therapy, occupational therapy, and/or speech-language pathology

services in a noncovered stay. SNFs became subject to CB once they transitioned

to PPS. Due to systems limitations, CB was not implemented at that time for

residents not in a Part A covered stay (Part A benefits exhausted, post-hospital or

level of care requirements not met). Section 313 of the Benefits Improvement and

Protection Act (BIPA) of 2000 subsequently repealed this aspect of CB altogether,

except for physical therapy, occupational therapy, and/or speech-language

pathology services. In addition, for either type of resident, the following

requirements were also delayed: (1) that the physicians forward the technical

portions of their services to the SNF; and (2) the requirement that the physician

enter the facility provider number of the SNF on the claim.

• Effective July 1, 1998, under 42 CFR 411.15(p)(3)(iii) published on May 12,

1998, a number of other services are excluded from CB. The hospital outpatient

department will bill these services directly to the A/B MAC (A) when furnished on

an outpatient basis by a hospital or a critical access hospital (see §20.1.2).

Physician’s and other practitioner’s professional services will be billed directly to

the A/B MAC (B) (see §20.1.1). Hospice care (see §20.2.2) and the ambulance

trip that initially conveys an individual to the SNF to be admitted as a resident, or

that conveys an individual from the SNF when discharged and no longer

considered a resident (see §20.3), are also excluded from CB.

• Effective April 1, 2000, §103 of the Balanced Budget Refinement Act (BBRA)

excluded additional services and drugs from CB that therefore had to be billed

directly to the A/B MAC (B) or DME MAC by the provider or supplier for

payment (see §20.3). As opposed to whole categories of services being excluded,

only certain specific services and drugs (identified by HCPCS code) were excluded

in each category. These exclusions included ambulance services furnished in

conjunction with renal dialysis services, certain specific chemotherapy drugs and

their administration services, certain specific radioisotope services, and certain

customized prosthetic devices.

• Effective January 1, 2001, §313 of the BIPA, restricted CB to the majority of

services provided to beneficiaries in a Medicare Part A covered stay and only to

therapy services provided to beneficiaries in a noncovered stay (see §20.5).

• Effective for claims with dates of service on or after April 1, 2001, for

those services and supplies that were not specifically excluded by law and

are furnished to a SNF resident covered under the Part A benefit,

physicians are required to forward the technical portions of any services to

the SNF to be billed by the SNF to the A/B MAC (A) for payment (see

§20.1.1).