Medicare Compliance & Reimbursement

SNFs still stuggle with unexpected 'under arrangement' bills from suppliers, agency says.

Skilled nursing facilities struggling with consolidated billing can protect their Medicare profit margins with this simple mantra: "Get it in writing."

Officials speaking at a recent SNF/Long-Term Care Open Door Forum touched on issues from therapy caps to MDS audits, but consolidated billing concerns again took center stage.

A big stumbling block for many SNFs: How to work with outside suppliers "under arrangement."

SNFs that fail to firm up agreements with outside suppliers are likely to get burned by bills for services that Medicare says are included in the Part A consolidated billing rate. To the feds, that means more nursing facilities refusing to pay what's due suppliers who serve residents in a SNF Part A covered stay.

Surprise Bills Steer SNFs Down The Wrong Path To Resolution

Medicare's payment to the SNF represents payment in full for the arranged-for service, according to Medicare law. If outside services are supplied, the supplier or practitioner must look to the SNF, rather than to Medicare Part B, for payment.

"The vast majority of SNFs are honest and upright operations that really do want to do the right thing, if they can only figure that out," says Bill Ullman of the Centers for Medicare & Medicaid Services, speaking at the forum.

Too often, SNFs make mistakes that could land them in hot water. For example, one SNF faced with a surprise bill for outside services refused to take the supplier's calls, reports Ullman.

In an extreme case--in which the dollar amounts are large or the pattern widespread--that approach could land a facility with a case of Medicare decertification, according to CMS.

"[Decertification] is the nuclear solution," said Ullman. But some cases could warrant that approach, he added.

Boost Billing Know-How, Boost Profits

To protect their interests and ensure that residents receive appropriate outside services, SNFs should consider these two tips:

1. Manage care, including outside services. SNFs can prevent unwanted bills from coming their way by taking steps to ensure their staff understands consolidated billing basics that relate to the provision of care, suggests Marilyn Mines of FR&R Healthcare Consulting in Deerfield, IL.

One sure way to minimize problems is to educate new residents and their loved ones. Upon admission, SNFs should make clear that the facility is charged with oversight of the resident's care, including the provision of outside services, recommends Ari Markenson, associate general counsel with Cypress Health Care Management in White Plains, NY. A family isn't likely to know that services and supplies extended outside the facility walls would be the responsibility of the nursing home.

And here's another tip: Patients are not entitled to demand that an SNF use a certain vendor or practitioner when the services or supplies are covered by consolidated billing.

2. Guard relationships wisely. A SNF that drag its feet when asked to pay a bill from the local hospital will be shooting itself in the foot. Local hospitals are likely to be an SNF's biggest referral source, experts advise.

For a refresher on Medicare funding for services provided to a SNF resident "under arrangement," review the 14-page Change Request 412, "Skilled Nursing Facility (SNF) Consolidated Billing Service Furnished under an 'Arrangement' with an Outside Entity." It's available online at www.cms.hhs.gov/transmittals/downloads/R412CP.pdf.

CMS also offers sample "under arrangement" agreements and contracts that providers can use at www.cms.hhs.gov/snfpps/08_bestpractices.asp.