What makes skilled nursing facility billing different
Skilled nursing facility billing services sit at the intersection of Medicare's institutional payment rules, state Medicaid programs and private payers that each price the stay differently. A skilled nursing facility does not bill visit by visit the way a physician office does. It bills days and payment groups, and the documentation that sets those groups starts the moment the patient is admitted. A missed assessment or a wrong diagnosis code can move an entire stay into a lower payment group.
Facilities that outsource this work to a nursing home billing services partner get the assessment calendar, diagnosis review and payer-specific rules handled before claims go out. Fastora handles this billing inside the medical billing services we provide for facilities, with certified billing and coding professionals who work SNF claims full time.
How a Medicare SNF stay is paid: PDPM basics
Medicare pays a covered SNF stay under the Patient-Driven Payment Model (PDPM), which replaced RUG-IV in October 2019. PDPM classifies each resident into payment components based on clinical characteristics rather than the volume of therapy minutes. The components are physical therapy, occupational therapy, speech-language pathology, nursing and non-therapy ancillary services.
The HIPPS code on the claim encodes these classifications, and it is built from the MDS assessment and the diagnosis codes. That makes coding and the assessment schedule the two levers that decide payment.
MDS assessments and the payment calendar
| Item | What it means for the claim |
|---|---|
| 5-day PPS assessment | Sets the HIPPS code for the start of the stay; must reflect the resident's condition in the first days |
| Interim Payment Assessment (IPA) | Optional assessment when a resident's condition changes materially; can reset the payment classification |
| PPS discharge assessment | Completed at discharge; combines with the 5-day assessment when the stay is short |
| HIPPS code | Five-character code reported on the claim that encodes the PDPM payment groups |
| NTA component | Non-therapy ancillary costs; a small number of high-cost conditions and services raise this component |
| Variable per diem | PT, OT and NTA payment rates adjust downward over the course of longer stays |
Medicare Part A covers up to 100 days in a benefit period after a qualifying three-day inpatient hospital stay, with no cost sharing for the first 20 days and a daily coinsurance after that. Checking the benefit period, the qualifying stay and any prior SNF days is part of every admission review our skilled nursing facility medical billing team runs.
Consolidated billing and Part A vs Part B
Under consolidated billing, the SNF is responsible for almost all services a resident receives during a covered Part A stay, including therapy, most ancillaries and many procedures done by outside vendors. Those vendor bills come to the facility, not to Medicare. A short list of excluded services — such as physician professional services and certain therapies — can still be billed separately to Part B.
When a stay is not covered by Part A, or when a service is not part of the covered stay, the facility bills Part B on a separate institutional claim. Knowing which type of bill goes to which payer for each day is a large part of what nursing home medical billing teams manage day to day.
Medicare Advantage, Medicaid and private pay
Medicare Advantage plans write their own rules for SNF stays, and they almost always require prior authorization before admission and concurrent review for continued days. A plan may also waive the three-day qualifying stay, or keep it. We confirm the plan's authorization rules, the approved day count and the per-day rate at admission.
Medicaid pays SNF stays on state-set per diem rates with its own eligibility process. Residents whose Medicaid applications are still pending create a different problem: days provided while eligibility is uncertain need tracking so the facility can bill once the case is approved. Our eligibility checks cover Medicare, Medicare Advantage, Medicaid and commercial plans for every admission.
Common SNF billing denials and how we prevent them
| Denial | Typical cause | Prevention step |
|---|---|---|
| No qualifying inpatient stay | Observation days counted as the qualifying stay | Admission source verified against hospital records before the Part A claim |
| MDS/HIPPS mismatch | Assessment data and claim classification disagree | Coding reviewed against the MDS before the claim is released |
| Consolidated billing denial | Vendor service billed to Medicare during a covered stay | Vendor charges routed to the facility, not to the payer, at intake |
| Late or missing assessment | Assessment not completed in the required window | Assessment calendar tracked from admission day one |
| Authorization exhausted | Medicare Advantage days used up without a new approval | Approved days tracked against the census daily |
Every claim passes our Advanced Pre-Submission Claim Review before submission. Denials that still occur are worked by our denial management team, corrected or appealed with the record, and the root cause is fed back to admissions and the MDS coordinator.
Credentialing and enrollment for facilities
SNFs enroll in Medicare as institutional providers, and the enrollment has to stay current through revalidations and ownership changes. Medicaid enrollment follows each state's process, and Medicare Advantage and commercial contracts are negotiated plan by plan. Claims sent before an effective date are denied, and credentialing gaps in a facility hit every bed at once.
Our credentialing and enrollment service tracks facility enrollments, revalidations and payer contracts through a nine-stage process, with a calendar that flags renewals before they lapse.
How Fastora supports skilled nursing facility billing
As a nursing home billing services company, Fastora works inside your existing EHR and billing system under the user access you grant, with no software to install and no hidden setup fees. You get a dedicated account contact, transparent dashboards, monthly performance reporting and a monthly review call.
Fees are quoted after a free assessment of your census, payer mix and current AR, and you can read how our pricing models work beforehand. To see how your current claims hold up, start with a free billing assessment.