Long-Term Care Billing Services | Expert SNF Revenue Cycle Management

Long-term care facilities serve as essential homes and healthcare providers for millions of elderly and disabled Americans, delivering skilled nursing services, rehabilitative therapy, and custodial care to individuals unable to live independently. The financial structure supporting these facilities has undergone dramatic transformation in recent years, shifting from therapy-driven reimbursement to the Patient-Driven Payment Model that bases payment on clinical characteristics rather than service volume. This evolution demands specialized long-term care billing services that general medical billing companies cannot provide.

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Skilled Nursing Facilities operate under one of the most complex reimbursement systems in American healthcare. Facilities must coordinate Medicare Part A coverage for skilled stays, Medicare Part B for outpatient therapy, Medicaid for long-term custodial care, managed care plans, private pay residents, and long-term care insurance policies. Skilled nursing facility billing requires seamless integration between clinical Minimum Data Set assessments and financial claim submission, with reimbursement directly tied to assessment accuracy and timing.

A dedicated partner providing SNF billing services understands the intricacies of post-acute care reimbursement intimately. They manage PDPM (Patient-Driven Payment Model) billing, coordinate MDS 3.0 assessment coordination, and navigate SNF consolidated billing requirements. By outsourcing to experts in nursing home billing solutions, facility administrators focus on resident care while securing the financial sustainability their operations require.

Understanding the Long-Term Care Continuum

Long-term care encompasses a broad spectrum of services delivered across multiple settings based on resident needs. Skilled Nursing Facilities provide the highest level of care, offering twenty-four hour nursing services, rehabilitative therapy, and medical oversight. Nursing Facilities focus more on custodial care for residents requiring assistance with activities of daily living but not continuous skilled nursing.

The distinction between skilled and custodial care carries significant reimbursement implications. Medicare covers skilled nursing facility care only when residents require daily skilled services from licensed professionals and remain under physician supervision. Part A vs Part B skilled services determines whether services are covered under Medicare’s Part A SNF benefit or billed separately under Part B for residents not in a covered stay.

Medicaid nursing facility billing covers long-term custodial care for eligible residents who have exhausted personal resources. Medicaid reimbursement varies significantly by state, with some using prospective payment systems and others retaining cost-based methodologies. Understanding these variations proves essential for facilities serving diverse resident populations.

The Patient-Driven Payment Model Explained

October 2019 marked a fundamental shift in Medicare reimbursement for Skilled Nursing Facilities with the implementation of the Patient-Driven Payment Model. PDPM replaced the previous Resource Utilization Group system, which based payment primarily on therapy minutes provided. Under PDPM, payment depends on resident clinical characteristics rather than service volume.

PDPM (Patient-Driven Payment Model) billing uses five distinct case-mix components to determine per diem payment rates: physical therapy, occupational therapy, speech-language pathology, nursing, and non-therapy ancillary. Each component receives its own per diem rate based on resident assessment data captured in the Minimum Data Set.

This shift eliminated financial incentives to provide therapy based on payment considerations rather than clinical need. However, it placed unprecedented importance on accurate MDS assessments, as reimbursement for the entire stay depends on classification at admission and any significant changes in condition. PDPM reimbursement optimization requires clinical and financial staff working in close coordination.

MDS Assessment Coordination

The Minimum Data Set serves as the foundation of Skilled Nursing Facility reimbursement under PDPM. This comprehensive clinical assessment captures resident health status, functional capabilities, cognitive condition, and service needs, generating data used for care planning, quality measurement, and payment determination.

MDS 3.0 assessment coordination involves completing assessments at specified intervals: the five-day assessment establishes initial PDPM classification, the fourteen-day assessment may adjust classification for stabilized residents, and significant change in status assessments capture major clinical developments. Each assessment must be completed and submitted within strict timelines to ensure accurate payment.

MDS submission and lock dates create critical deadlines for facility operations. Assessments must be completed within prescribed windows and submitted to the Centers for Medicare and Medicaid Services through the Internet Quality Improvement and Evaluation System. Late or missing assessments result in payment delays and potential denials.

HIPPS Code Calculation

Health Insurance Prospective Payment System codes translate MDS assessment data into the case-mix classifications that determine Medicare payment rates. HIPPS code calculation combines information from all five PDPM components into a single code that appears on each claim.

HIPPS codes consist of five or six characters representing the resident’s classification for each payment component. Physical and occupational therapy components combine into a single character, while speech-language pathology, nursing, and non-therapy ancillary each contribute separate characters. Accurate code assignment depends entirely on correct MDS completion and coding.

SNF claim submission (UB-04) includes HIPPS codes with each service line, indicating the payment group for the billing period. Claims may span multiple HIPPS codes when resident classification changes during the stay, requiring careful attention to ensure each period is billed with appropriate codes.

Medicare Part A SNF Billing

Medicare Part A covers Skilled Nursing Facility care for eligible beneficiaries requiring daily skilled services following a qualifying hospital stay. Medicare Part A SNF billing requires a three-day prior inpatient hospitalization, admission within thirty days of hospital discharge, and ongoing need for skilled services.

Part A coverage extends for up to one hundred days per benefit period, with full coverage for the first twenty days and coinsurance required for days twenty-one through one hundred. Residents must continue to require skilled services throughout the covered stay, with coverage ending when skilled need resolves.

SNF timely filing requirements demand that claims be submitted within twelve months of the date of service for Medicare reimbursement. Facilities must track benefit period usage, Medicare denials, and resident payment responsibilities to ensure complete revenue capture.

Medicare Part B Therapy Billing

Residents not in a Medicare Part A covered stay may still receive skilled services under Medicare Part B. Medicare Part B therapy billing covers physical therapy, occupational therapy, and speech-language pathology services provided to residents in skilled nursing facilities, regardless of whether they reside in the Medicare Part A benefit period.

Part B therapy services require physician orders, skilled therapy need, and ongoing documentation of treatment and progress. Services are billed using therapy-specific CPT codes with appropriate modifiers indicating therapy discipline and service type.

Therapy minute documentation remains essential under PDPM, though payment no longer directly correlates with minutes provided. Therapists must document treatment accurately to support medical necessity and justify continued services, even though payment depends on clinical characteristics rather than therapy volume.

SNF Consolidated Billing

Skilled Nursing Facilities operate under consolidated billing requirements that designate the facility as the sole billing source for most services provided to residents during covered stays. SNF consolidated billing ensures that Medicare pays a single bundled payment covering all services included in the SNF prospective payment.

Consolidated billing identifies specific service categories that fall within the SNF payment, including most routine services, therapy, and certain diagnostic tests. Services outside the consolidated billing umbrella, such as physician professional services and certain high-cost items, may be billed separately by outside providers.

Understanding SNF consolidated billing requirements and exceptions prevents duplicate billing and ensures that outside providers do not inappropriately bill for services already covered by facility payment. Facilities must educate vendors and monitor claims to prevent payment disruptions.

Medicaid Nursing Facility Reimbursement

They serves as the primary payer for long-term custodial care, covering residents who have exhausted personal resources and meet clinical eligibility criteria. Medicaid nursing facility reimbursement varies significantly by state, with some using prospective payment systems and others retaining cost-based methodologies.

Medicaid eligibility determination involves both clinical and financial criteria. Residents must require nursing facility level of care and meet income and asset limits established by state programs. Medicaid eligibility verification requires ongoing monitoring as resident circumstances change.

Some residents may be dually eligible for both Medicare and Medicaid, with Medicare covering skilled services and Medicaid covering custodial care and cost-sharing responsibilities. Coordinating benefits for these residents requires careful attention to payment ordering and crossover claim processing.

Managed Care Long-Term Care Billing

States increasingly enroll Medicaid beneficiaries in managed long-term care programs, transferring responsibility for nursing facility services to managed care organizations. Managed care long-term care billing requires facilities to contract with MCOs and navigate varying plan requirements.

Managed care contracts establish payment rates, covered services, and administrative requirements that may differ significantly from traditional Medicaid. Facilities must verify enrollment, obtain authorizations, and submit claims according to plan specifications while tracking payments against contracted amounts.

Medicare Advantage SNF billing adds another layer of complexity for residents enrolled in Medicare private plans. These plans may have different coverage policies, prior authorization requirements, and payment methodologies than traditional Medicare, requiring facility staff to understand and navigate multiple plan variations.

Long-Term Care Insurance Billing

Private long-term care insurance policies provide coverage for many residents, particularly those entering facilities from community settings. Long-term care insurance billing involves understanding policy provisions, filing requirements, and coordination with other coverage.

Policies vary widely in covered services, benefit periods, daily benefit amounts, and elimination periods. Facilities must obtain policy information at admission, verify coverage details, and submit claims according to insurer requirements while tracking benefit exhaustion and resident responsibility.

Private pay LTC billing applies to residents without insurance coverage or those whose benefits have been exhausted. These residents pay directly for services, requiring clear communication about rates, billing cycles, and payment expectations. Effective private pay management includes regular statements, convenient payment options, and systematic follow-up on past due accounts.

VA Community Living Center Billing

The Department of Veterans Affairs operates Community Living Centers and contracts with community nursing homes to serve eligible veterans. VA community living center billing involves specific contracts, payment rates, and reporting requirements that differ from other payers.

VA contract nursing home programs require facilities to meet VA standards, accept VA-determined payment rates, and submit claims through VA systems. Facilities must verify veteran eligibility, obtain necessary authorizations, and coordinate with VA case managers on care planning and discharge.

For veterans eligible for both VA benefits and Medicare or Medicaid, coordination of benefits determines payment order and facility reimbursement. Understanding these relationships ensures that facilities receive appropriate payment from all available sources.

Medicare Denial Management

Medicare denials in skilled nursing facilities arise from various sources, including coverage determinations, coding errors, and documentation deficiencies. Medicare denial management for SNFs requires systematic identification of denial causes and persistent pursuit of appropriate payment.

Common denial reasons include insufficient documentation of skilled need, missed assessment deadlines, incorrect HIPPS code assignment, and failure to meet coverage criteria. Each denial type requires specific appeal strategies and supporting documentation.

SNF conditions of participation establish the framework for Medicare coverage determinations. Facilities must maintain current compliance with all participation requirements, as survey findings can affect payment and program participation. Regular internal audits identify potential issues before they trigger payment denials.

RUG Coding Transition

While the Resource Utilization Group system has been replaced by PDPM for Medicare Part A, RUG classification remains relevant for some state Medicaid programs and other payers. RUG (Resource Utilization Group) coding continues to affect reimbursement in certain contexts.

Some Medicaid nursing facility payment systems retain RUG-based methodologies, requiring facilities to maintain competency in both PDPM and RUG classification. Staff must understand the different assessment requirements, calculation methods, and documentation standards for each system.

Transitioning from RUGs to PDPM billing required significant operational changes for skilled nursing facilities. Staff training, system updates, and workflow redesign ensured successful implementation of the new payment methodology. Facilities that navigated this transition effectively continue benefiting from PDPM’s clinical focus.

Therapy Documentation Requirements

Therapy documentation supports both clinical care and reimbursement, demonstrating medical necessity, documenting treatment provided, and tracking resident progress. Therapy minute documentation captures the time therapists spend delivering skilled services, though payment under PDPM no longer directly correlates with minutes.

Access federal healthcare policy updates via U.S. Department of Health & Human Services.

Therapy evaluations establish baseline function, identify treatment needs, and develop plan of care. Treatment notes document services provided, resident response, and progress toward goals. Progress summaries at established intervals evaluate treatment effectiveness and support continued care.

Medicare Administrative Contractors and other auditors review therapy documentation to verify that services were medically necessary and appropriately delivered. Facilities maintaining strong documentation practices reduce audit risk and support successful appeals when questions arise.

Maximizing SNF Reimbursement

Optimizing reimbursement for skilled nursing facilities requires systematic attention to every element of the revenue cycle. From pre-admission verification through final payment posting, each step affects ultimate financial performance.

Maximize SNF reimbursement through comprehensive revenue cycle management addressing all available funding sources. Medicare Part A coverage for skilled stays forms the foundation, supplemented by Medicare Part B therapy, Medicaid nursing facility payments, managed care contracts, and private resources.

Optimize long-term care revenue cycle by ensuring accurate MDS assessments, timely claim submission, and persistent denial management. Clean claim rates measure the percentage of claims accepted by payers on first submission, with specialized billing partners achieving high rates through systematic quality control.

Cost Analysis: Outsourcing Long-Term Care Billing

Maintaining long-term care billing capabilities internally requires significant investment in personnel, technology, and training. Long-Term Care Billing Services Billing staff must understand PDPM, MDS assessment coordination, consolidated billing, and multiple payer requirements. Technology must support assessment submission, claim generation, and comprehensive reporting.

Outsourcing to a specialized long-term care billing services provider eliminates these costs while improving results. The cost of outsourced billing typically ranges from four to seven percent of collected revenue, comparable to industry rates but with the advantage of specialized SNF expertise.

Beyond direct cost savings, outsourcing delivers value through improved collection rates, reduced administrative burden, and enhanced compliance. Specialized billing partners stay current with regulatory changes, payer policies, and technology advancements that individual facilities cannot track effectively.

Technology for Long-Term Care Billing

Effective long-term care billing depends on technology designed for the unique requirements of skilled nursing facilities. SNF EHR integration ensures that clinical documentation flows seamlessly to billing systems, supporting accurate coding and claim submission.

Long-term care management software should accommodate MDS assessment submission, PDPM classification, consolidated billing rules, and multiple payer requirements. Systems must support electronic claim submission to Medicare, Medicaid, managed care plans, and other payers while maintaining compliance with privacy and security requirements.

MDS software integration with billing systems reduces duplicate data entry and improves accuracy. When MDS assessments automatically generate HIPPS codes and feed claim information, facilities reduce errors and accelerate payment cycles.

Frequently Asked Questions
Long-Term Care Billing Services

What makes long-term care billing different from other medical billing?

Long-term care billing services differ fundamentally due to the assessment-driven reimbursement model that distinguishes skilled nursing facilities. PDPM (Patient-Driven Payment Model) billing bases payment on clinical characteristics captured in MDS 3.0 assessment coordination, not on services provided. SNF consolidated billing designates facilities as the sole billing source for most services. These unique features require specialized expertise.

What is the Patient-Driven Payment Model and how does it affect reimbursement?

PDPM replaced therapy-driven reimbursement with payment based on resident clinical characteristics. Five case-mix components determine per diem rates: physical therapy, occupational therapy, speech-language pathology, nursing, and non-therapy ancillary. PDPM reimbursement optimization requires accurate MDS assessments at admission and when resident condition changes, as these assessments determine payment for the entire stay.

How does MDS assessment affect SNF reimbursement?

The Minimum Data Set captures resident health status, functional capabilities, and service needs. MDS 3.0 assessment coordination involves completing assessments at specified intervals, with the five-day assessment establishing initial PDPM classification. HIPPS code calculation translates assessment data into payment codes. Accurate and timely MDS submission is essential for proper reimbursement.

What is SNF consolidated billing?

SNF consolidated billing designates the facility as the sole billing source for most services provided to residents during Medicare covered stays. The facility receives a bundled payment covering included services, and outside providers cannot bill separately for these services. Understanding SNF consolidated billing requirements and exceptions prevents duplicate billing and payment disruptions.

What is the difference between Medicare Part A and Part B in skilled nursing facilities?

Part A vs Part B skilled services determines coverage based on resident benefit status. Medicare Part A SNF billing covers skilled stays following qualifying hospital admissions. With payment under PDPM. Medicare Part B therapy billing covers services for residents not in a Part A benefit period. Billed separately using therapy codes. Facilities must track benefit periods to bill services appropriately.

Final Considerations

Long-term care facilities serve as essential homes and healthcare providers for millions of elderly and disabled Americans. Delivering skilled nursing services and supportive care to individuals unable to live independently. The complex reimbursement systems that sustain these facilities—PDPM. Consolidated billing, Medicaid methodologies, and managed care contracts. It require specialized revenue cycle management expertise that general billing companies cannot provide.

Partnering with a dedicated provider of long-term care billing services strengthens the financial foundation of your skilled nursing facility. From PDPM (Patient-Driven Payment Model) billing to MDS 3.0 assessment coordination. Expert billing partners handle the complexity so you can focus on resident care. They navigate SNF consolidated billing, manage Medicare Part A SNF billing, and ensure that every eligible service generates maximum reimbursement.

The skilled nursing facilities that thrive in coming years will be those that combine clinical excellence with robust financial operations. By choosing the right billing partner. You position your facility for lasting sustainability. Optimize long-term care revenue cycle through professional outsourcing and dedicate your resources to the residents who depend on your services.

Major Industry Leader

Ready to optimize your skilled nursing facility’s financial sustainability? Partner with Aspect Billing Solutions,the leader in long-term care billing services for SNFs nationwide. From PDPM reimbursement optimization to comprehensive long-term care revenue cycle management. We handle the complexity so you can focus on resident care. Contact us today for a complimentary revenue analysisand discover how our skilled nursing facility. Billing expertise can maximize your facility’s reimbursement!