Skilled Nursing Facility (SNF) Consolidated Billing (CB)

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Consolidated Billing Background

Prior to the Balanced Budget Act of 1997 (BBA), an SNF could elect to furnish services to a resident in a covered Part A stay, either: directly, using its own resources; through the SNF’s transfer agreement hospital; or under arrangements with an independent therapist (for physical, occupational, and speech therapy services). In each of these circumstances, the SNF billed Medicare Part A for the services.

However, the SNF also had the further option of “unbundling” a service altogether; that is, the SNF could permit an outside supplier to furnish the service directly to the resident, and the outside supplier would submit a bill to Medicare Part B, without any involvement of the SNF itself.  This practice created several problems, including the following:

• Potential for duplicate (Parts A/B) billing if both the SNF and outside supplier billed;
• An increased out-of-pocket liability incurred by the beneficiary for the Part B deductible and coinsurance even if only the supplier billed; and
• A dispersal of responsibility for resident care among various outside suppliers adversely affected the quality (coordination of care) and program integrity, as documented in reports by both the Office of the Inspector General (OIG) and the Government Accountability Office (GAO)

Congress then enacted the Balanced Budget Act of 1997 (BBA), Public Law 105-33, Section 4432(b), and it contains a Consolidated Billing (CB) requirement for SNFs.  Under the CB requirement, an SNF itself must submit all Medicare claims for the services that its residents receive (except for specifically excluded services listed below).

CB eliminates the potential for duplicative billings for the same service to the Part A fiscal intermediary by the SNF and the Part B carrier by an outside supplier. It also enhances the SNF’s capacity to meet its existing responsibility to oversee and coordinate the total package of care that each of its residents receives.

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