(Medicare Claims Processing Manual)

But consolidated billing does not apply to:    A nursing home that is not Medicare -certified, such as:   o A nursing home that does not participate at all in either the Medicare or Medicaid programs;   o A non- certified part of a nursing home that also includes a participating distinct part SNF unit; and   o A nursing home that exclusively participates in the Medicaid program as an NF.    CAHs certified as swing -bed hospitals.  However, as noted above, CAH swing-bed services are subject to the hospital bundling requirement at section 1862(a)(14) of the Social Security Act and 42 CFR  411.15(m).   Medicare Coordinated Care Demonstration  Services for beneficiaries covered under the Medicare Coordinated Care Demonstration will not be subject to consolidated billing.  Common Working File (CWF) will appropriately edit for these codes so that the A/B MACs (B) will pay them separately.  10.3 - Types of Services Subject to the Consolidated Billing Requirement for SNFs  (Rev. 2573, Issued: 10- 26-12, Effective: 04 -01-13, Implementation: 04- 01-13)  As previously discussed, the consolidated billing requirement applies to all services furnished to a SNF resident in a covered Part A stay (other than the excluded service categories described below) and for physical therapy, occupational therapy, and/or speech -language pathology services provided to residents and paid under Part B. Examples of services that are subject to consolidated billing include:    Physical therapy, occupational therapy, and/or speech- language pathology services, regardless of whether they are furnished by (or under the supervision of) a physician or other health care professional (see 1888(e)(2)(A)(ii) of the Act).  Physical therapy, occupational therapy, and/or speech-language pathology services (other than audiology services, which are considered diagnostic tests rather than therapy services) furnished to a SNF resident during a noncovered stay must still be billed by the SNF itself.  This is known as Part B consolidated billing (see 20.5 of this chapter).   Psychological and other services furnished by a clinical social worker; and    Services furnished as an incident to the professional services of a physician or other excluded category of health care professional described in 20.1.1 below.   10.4 - Furnishing Services that are Subject to SNF Consolidated Billing Under an Arrangement With an Outside Entity  (Rev  .4001, Issued: 03- 16-18, Effective: 06- 19- 18, Implementation: 06-19-18)  As discussed in 10.1 and 10.3, the SNF consolidated billing provisions (at 1862(a)(18) , 1866(a)(1)(H)(ii), and 1888(e)(2)(A)  of the Act) place with the SNF itself the Medicare billing responsibility for most of its residents services.  Part A consolidated billing requires that a SNF must include on its Part A bill almost all of the services that a resident receives during the course of a Medicare -covered stay, other than those services that are specifically excluded from the SNFs global PPS per diem payment for the covered stay.  (These excluded services, such as the services of physicians and certain other practitioners, remain separately billable to the A/B MAC (B) directly by the outside entity that actually furnishes them.)  In addition, Part B consolidated billing makes the SNF itself responsible for submitting the Part B bills for any physical therapy, occupational therapy, and/or speech-language pathology services that a resident receives during a noncovered stay (see 20.5).  Further, for any Part A or Part B service that is subject to SNF consolidated billing, the SNF must either furnish the service directly with its own resources, or obtain the service from an outside entity (such as a supplier) under an arrangement, as described in 1861(w) of the Act and in 80.5.  Under such an arrangement, the SNF must reimburse the outside entity for those Medicare- covered services that are subject to consolidated billing; i.e., services that are reimbursable only to the SNF as part of its global PPS per diem or those Part B services that must be billed by the SNF.   Since the inception of the SNF PPS, several problematic situations have been identified where the SNF resident receives services that are subject to consolidated billing from an outside entity, such as a supplier.  (In this context, the term supplier can also include those practitioners who, in addition to performing their separately billable professional services, essentially act as a supplier by also furnishing other services that are subject to the consolidated billing requirement.)  As discussed in gr eater detail below, such situations most commonly arise in one of the following two scenarios:  1) A SNF does not accurately identify services as being subject to consolidated billing when ordering such services from a supplier or practitioner; or 2) A supplier fails to ascertain a beneficiarys status as a SNF resident when the beneficiary (or another individual acting on the beneficiarys behalf) seeks to obtain such services directly from the supplier without the SNFs knowledge.   The absence of a valid arrangement in the situations described above creates confusion and friction between SNFs and their suppliers.  Suppliers need to understand which services are subject to consolidated billing to avoid situations where they might impr operly attempt to bill the A/B MAC (B) (or other payers such as Medicaid and beneficiaries) directly for the services.  In addition, when ordering or furnishing services under arrangements, both parties need to reach a common understanding on the terms of payment; e.g., how to submit an invoice, how payment rates will be determined, and the turn- around time between billing and payment.  Without this understanding, it may become difficult to maintain the strong relationships between SNFs and their supplier s that are necessary to ensure proper coordination of care to the Medicare beneficiaries.  Whenever possible, SNFs should document arrangements with suppliers in writing, particularly with suppliers furnishing services on an ongoing basis, such as laboratories, x-ray suppliers, and pharmacies.  This also enables the SNF to obtain the suppliers assurance that the arranged -for services will meet accepted standards of quality (under the regulations at 42 CFR 483.70(g)(2), SNFs must ensure that services obtained under an arrangement with an outside source meet professional standards and principles that apply to professionals providing such services).   However, it is important to note that the absence of a valid arrangement does NOT invalidate the SNFs responsibility to reimburse suppliers for services included in the SNF bundle of services represented by the SNF PPS global per diem rate.  As the SNF has already been paid for the services, the SNF must be considered the responsible party when medically necessary supplier services are furnished to beneficiaries in Medicare Part A stays.  This obligation applies even in cases where the SNF did not specif ically order the service; e.g., during a scheduled physicians visit, the physician performs additional diagnostic tests that had not been ordered by the SNF; a family member arranges a physician visit without the knowledge of SNF staff and the physician bills the SNF for incident to services.   Finally, while establishing a valid arrangement prior to ordering services from a supplier minimizes the likelihood of a payment dispute between the parties, it is not unreasonable to expect occasional disagreements between the parties that may result in n on-payment of a supplier claim.  However, it is important to note that there are potentially adverse consequences to SNFs when patterns of such denials are identified.  Specifically, all participating SNFs agree to comply with program regulations when ente ring into a Medicare provider agreement which, as explained below, requires a SNF to have a valid arrangement in place whenever a resident receives services that are subject to consolidated billing from any entity other than the SNF itself.  Moreover, in r eceiving a bundled per diem payment under the SNF PPS that includes such services, the SNF is accepting Medicare payment, and financial responsibility, for the service.  Accordingly, these instructions reiterate and clarify the applicable consolidated billing requirements that pertain to SNFs and to the outside suppliers that serve SNF residents.  10.4.1 - Under Arrangements Relationships  (Rev. 10880, Issued: 08-06-21, Effective: 11-08-21, Implementation: 11-08-21)  Under an arrangement as defined in 1861(w) of the Act, Medicares payment to the SNF represents payment in full for the arranged-for service, and the supplier must look to the SNF (rather than to A/B MAC (B)) for its payment.  Further, in entering into such an arrangement, the SNF cannot function as a mere billing conduit, but must actually exercise professional responsibility over the arranged- for service (see the Medicare General Information, Eligibility, and Entitlement Manual, Chapter 5, 10.3, and the Medicare Benefit Policy Manual, Chapter 8,  70.4, for additional information on services furnished under arrangements).  Medicare does not prescribe the actual terms of the SNFs relationship with its suppliers (such as the specific amount or timing of payment by the SNF), which are to be arrived at through direct negotiation between the parties to the agreement.  However, i n order for a valid arrangement to exist, the SNF must reach a mutual understanding with its supplier as to how the supplier is to be paid for its services.  Documenting the terms of the arrangement confers the added benefit of providing both parties wit h a ready means of resolution in the event that a dispute arises over a particular service.  This type of arrangement has proven to be effective in situations where suppliers regularly provide services to facility residents on an ongoing basis; e.g., laboratory and x-ray suppliers, DME supplies, etc.  Sample model agreements involving arrangements between SNFs and their suppliers are available for review on CMSs Best Practices Guidelines website, at https://www.cms.gov/Medicare/Medicare -Fee-for-Service-Payment/SNFPPS/BestPractices.html.  If a SNF elects to utilize an outside supplier to furnish medically appropriate services that are subject to consolidated billing, but then refuses to reimburse that supplier for the services, then there is no valid arrangement as contemplated under 1862( a)(18) of the Act.  Not only would this potentially result in Medicares noncoverage of the particular services at issue, but a SNF demonstrating a pattern of nonpayment would also risk being found in violation of the terms of its provider agreement.  Unde r 1866(a)(1)(H)(ii) of the Act (and 42 CFR 489.20(s) ), the SNFs provider agreement includes a specific commitment to comply with the requirements of the consolidated billing provision.  Further, 1866(g) of the Act imposes a civil money penalty on any person who knowingly and willfully presents (or causes to be presented) a bill or request for payment inconsistent with an arrangement or in violation of the requirement for such an arrangement.   10.4.2 - SNF and Supplier Responsibilities  (Rev. 412, Issued: 12- 23-04, Effective: 05 -21-04, Implementation: 01- 24-05)  Problems involving the absence of a valid arrangement between an SNF and its suppliers typically tend to arise in one of the following two situations.   Problem Scenario 1:  An SNF elects to utilize an outside supplier to furnish a type of service that would be subject to Part A consolidated billing, but then fails to inform the supplier that the resident receiving the service is in a covered Part A stay.  This causes the supplier to conclude mistakenly that the service it furnishes to that resident is not subject to consolidated billing.  Based on the inaccurate impression that the residents SNF stay is noncovered, the supplier inappropriately submits a separate Part B claim for the service, and may also improperly bill other insurers and the resident.  Then, the supplier only learns of the actual status of the residents Medicare-covered SNF stay when that Part B claim is denied.  In this scenario, even though the supplier made reasonable efforts to ascertain from the SNF both the beneficiarys status as an SNF resident and the specific nature of the beneficiarys SNF stay, the information from the SNF (on which the supplier relied) proved to be inaccurate.