Coding & Reimbursement

Payment for Nursing Home Patients

By Suzanne L. Corcoran, COE

Seeing patients who reside in a skilled nursing facility entails certain rules with which ophthalmology practices may not be familiar. One area of confusion is known as “consolidated billing.“

Q. What is consolidated billing?

A. Medicare Part A covers nursing facility stays under very limited conditions; usually only after discharge from a hospital stay lasting at least three days. For those patients who are in this situation, special rules apply to some ophthalmic services. Since 1998, the Social Security Act requires skilled nursing facilities (SNFs) to bill Medicare for the entire package of services that their residents receive during the course of their covered Part A stay. An exception is made for certain excluded items and services described below.

Prior to this payment system for SNFs, Medicare experienced significant problems with duplicate billing to Part ? Medicare for services furnished to SNF residents covered under Part A Medicare.

Q. Are all services included?

A. There are a number of services that are excluded from SNF consolidated billing. They include physicians' professional services (e.g., exams and consultations) and the professional component of physician diagnostic services submitted with modifier 26 (e.g., A-scan interpretation). The complete list of excluded services can be found on the CMS Web site.¹ Note that services provided in your office are subject to consolidated billing rules for these patients.

Q. If only the professional component of tests is excluded how should physicians bill for the technical component of diagnostic tests performed on patients resident in a skilled nursing facility

A. When Medicare Part A coverage is in place, the technical component of diagnostic tests is paid as part of the reimbursement to the SNF. Physicians should contract with the SNF to be compensated for the technical component. Ideally, an agreement with the nursing home should be in place prior to providing care for these patients. In the absence of a prior agreement, physicians should present an invoice to the SNF director and, if necessary, explain that the technical component is already included in Part As comprehensive per diem payment to the SNF for the covered stay.

Q. What about injectable medications

A. Many injectable medications are excluded from consolidated billing, but not all. The following ophthalmic drugs are included in consolidated billing, although the list is not exhaustive. This means the physician may not bill Medicare for these medications when they are administered to Medicare patients during the course of a Part A covered SNF stay.

► Avastin (J3490)
► Celestone (J0702)
► Depo-Medrol(J0120)
► Dexamethasone (J 1100)
► Fluorouracil (J9190)
► Garamycin(J1580)
► Kenalog (J3301)
► Lucentis (J2778)
► Solu-Medrol (J2920)
► Vancomycin (J3370)
► Verteporfin (J3395)

The SNF is required to provide the drugs or to pay the physician for them. Payment is most common in ophthalmology, as it is unlikely that the SNF will purchase these drugs. Of course, if the injection is administered in the physicians office, the physician must look to the SNF for payment.

Q. What about other services

A. Consolidated billing rules stipulate that the SNF must provide all DME POS items that residents in a covered stay require, either directly or under arrangement. This is challenging for the optical dispensary, since post-cataract eyeglasses are paid for under the DME POS portion of Medicare law. If your patient is a resident in an SNF and subject to the consolidated billing rule, arrange with the SNF for payment and do not file a claim with the DME MAC. Alternatively, if you deliver the post-cataract glasses outside of the 100-day covered period, file a claim as usual with the DME MAC.

Q. If no agreement is in place with the SNF, how do we collect payment from the facility

A. In the absence of a written agreement, you risk not being paid for the service, even though the service is Medicare-covered and included in the SNF's global per diem. In some instances, you may have been unaware that the patient was in a Part A stay until your Part ? claim is denied. It is necessary to discuss this with the SNF's director and work out an equitable arrangement for payment. OM

Reference

1. 2009 Carrier/A/B MAC Update; see: http://www.cms.hhs.gov/SNFConsolidatedBilling/02j_2009Update.asp#TopOfPage

Suzanne L. Corcoran is vice president of Corcoran Consulting Group. She can be reached at (800) 399-6565 or www.corcoranccg.com.