Skilled nursing facility billing operates under two distinct Medicare payment systems—Part A PDPM for covered stays and Part B for physician services—with strict consolidated billing rules that determine what can be separately billed and what is bundled. VeriMedix provides the regulatory expertise SNFs and physician practices need to navigate this complex billing environment and reduce the 14.9% improper payment rate CMS reported for SNF Part A claims.
Medicare SNF Part A reimbursement is governed by the Patient Driven Payment Model (PDPM), effective October 1, 2019. PDPM classifies residents across five case-mix components—Physical Therapy (PT), Occupational Therapy (OT), Speech-Language Pathology (SLP), Nursing, and Non-Therapy Ancillary (NTA)—each generating a separate per-diem rate that is summed for the daily payment. Classification is derived from MDS (Minimum Data Set) assessments, particularly the 5-day PPS assessment at admission. Unlike the former RUG-IV model, PDPM payment does not depend on therapy volume, reducing therapy documentation as a payment driver while increasing the importance of accurate ICD-10 coding on the MDS and complete clinical documentation. The HIPPS code—a 5-character code generated from the MDS—is submitted on the SNF UB-04 claim and drives the facility's Part A per-diem rate.
Consolidated billing is one of the most operationally complex aspects of SNF practice. The SNF bears billing responsibility for virtually all services provided to Medicare beneficiaries during a covered Part A stay. Non-SNF providers—including ancillary labs, therapists, and specialists—cannot bill Medicare directly for services furnished during the Part A stay; they must bill the SNF instead. A limited number of services are excluded from consolidated billing and may be billed separately: physician professional services, specific chemotherapy drugs and administration, certain dialysis services, radioisotope services, customized prosthetics, and certain ambulance services. Practitioners who inadvertently bill Medicare directly for bundled services during a Part A stay will have their claims denied and may face audit liability.
Physician services in the nursing facility are billed under Medicare Part B using place of service 31 (SNF) or 32 (nursing facility). Initial nursing facility visits are coded 99304 (low MDM or 25–34 min), 99305 (moderate MDM or 35–44 min), or 99306 (high MDM or 45+ min). Subsequent visits use 99307 (straightforward MDM or 10–14 min), 99308 (low or 15–29 min), 99309 (moderate or 30–44 min), or 99310 (high or 45+ min). As of January 1, 2023, the annual assessment code 99318 was deleted; annual exams are coded as subsequent visits. Prolonged service add-ons (G0317 for Medicare) may be appended to 99306 or 99310 when time exceeds the highest-level threshold by at least 15 additional minutes.
Below are commonly billed codes our certified coders manage for nursing home / snf practices. Always confirm payer-specific coverage and current code values.
| Code | Description | Billing note |
|---|---|---|
99304 | Initial nursing facility care – straightforward or low MDM, or 25–34 min | POS 31 or 32; only a physician may perform the initial visit in a SNF (NPPs may in NF per state law) |
99305 | Initial nursing facility care – moderate MDM, or 35–44 min | Moderate MDM requires equivalent of level 4 office visit decision-making |
99306 | Initial nursing facility care – high MDM, or 45+ min | Most complex initial admission; high-complexity MDM required |
99307 | Subsequent nursing facility care – straightforward MDM, or 10–14 min | Equivalent of level 3 office visit MDM complexity |
99309 | Subsequent nursing facility care – moderate MDM, or 30–44 min | Common code for medically complex residents post-acute admission |
99310 | Subsequent nursing facility care – high MDM, or 45+ min | For most acutely deteriorating or unstable residents; strongest documentation required |
99315 | Nursing facility discharge day management – 30 min or less | Coded by time; document actual time spent on discharge day activities |
99316 | Nursing facility discharge day management – more than 30 min | Requires documented time >30 min; higher complexity discharge planning |
G0317 | Prolonged nursing facility E/M beyond highest-level visit (Medicare-specific add-on) | Add to 99306 at ≥60 min or 99310 at ≥60 min; each unit = 15 additional min beyond threshold |
Our standard operating procedures for nursing home / snf revenue cycle management — the step-by-step workflow we follow on every claim:
These are the issues we see most often in nursing home / snf billing — and exactly how we resolve them:
Per CMS, insufficient documentation accounted for 79.1% of SNF improper payments in the 2023 reporting period. The medical record must show the patient requires daily skilled care (nursing, PT, OT, or SLP) that can only be provided in an SNF setting and is related to a condition treated in the qualifying hospital stay. Fix: implement standardized daily skilled care justification notes and ensure interdisciplinary team documentation supports continued Medicare coverage at each recertification.
When actual therapy minutes documented in the visit records differ from minutes reported on the MDS, claims are adjusted or denied and RAC audits are triggered. Fix: implement daily reconciliation between therapy visit logs and MDS Section O entries before the MDS is locked; require therapy supervisors to sign off on the comparison.
Ancillary labs, radiology groups, or specialists who bill Medicare directly for services rendered during a covered Part A stay will have claims denied. Fix: provide all referral partners and on-call specialists with a consolidated billing policy document; build an internal review step to catch any direct-bill claims before they are submitted.
Claims are denied when certifications are not obtained at or near the time of admission or when recertifications are past the 14-day (first) or 30-day (subsequent) windows. Fix: assign a dedicated billing coordinator to maintain a certification calendar; send automated reminders to the attending physician 7 days before each recertification deadline.
Continuing to bill Part A after the 100-day benefit is exhausted (or when the patient no longer meets daily skilled care criteria) results in denials and potential fraud exposure. Fix: track each patient's Part A day count in real time; trigger a billing status change notice and convert to Part B billing (or private pay/Medicaid as applicable) immediately upon benefit exhaustion or loss of qualifying criteria.
Verimedix works inside the systems nursing home / snf practices already use, including:
PDPM (Patient Driven Payment Model) classifies SNF residents across five separate case-mix components—PT, OT, SLP, Nursing, and Non-Therapy Ancillary—each with its own per-diem rate, producing a total daily payment as the sum of all five. Unlike RUG-IV, where therapy volume (minutes per week) drove the majority of payment, PDPM bases reimbursement on clinical characteristics including diagnoses, functional scores, and care needs derived from the MDS. This shift rewards accurate clinical documentation and ICD-10 coding rather than maximizing therapy minutes.
Consolidated billing requires the SNF to bill Medicare for nearly all services provided during a covered Part A stay. However, a specific list of services is excluded and may be billed directly to Medicare by the providing practitioner: physician professional services, certain chemotherapy drugs and administration, dialysis-related services, certain ambulance services, radioisotope services, and customized prosthetics. Practitioners must verify whether a service falls on the exclusion list before submitting a direct Medicare claim during a Part A stay.
To qualify for SNF Part A benefits, a Medicare beneficiary must have had an inpatient hospital stay of at least 3 consecutive calendar days (not counting the day of discharge), admitted as a formal inpatient—not observation. The SNF admission must begin within 30 days of hospital discharge. Observation status days do not count toward the 3-day qualifying stay, which is a common source of patient and billing confusion.
Under Medicare, a physician must visit a patient in the SNF at least once every 30 days for the first 90 days, and at least once every 60 days thereafter. These are the minimum federally mandated frequencies. More frequent visits may be medically necessary and billable based on clinical need. After the physician's initial visit in the SNF, an NPP may conduct alternate required visits under the physician's supervision.
In a SNF (POS 31), only a physician may perform and bill the initial visit. In a NF (POS 32), an NPP may perform the initial visit when state law permits. After the initial physician visit in the SNF, an NPP may perform subsequent care visits (99307–99310) and bill under their own NPI at 85% of the physician fee schedule. Incident-to billing does not apply in SNF or NF settings; NPP services must be billed under the NPP's NPI.
The primary diagnosis on the MDS Section I drives the clinical component of the PT and OT PDPM classification. Specificity is critical: using the correct stroke code (e.g., I63.411 vs. I63.9), fracture code with laterality and encounter type, or orthopedic diagnosis significantly affects the payment group and rate. Additionally, coding comorbidities such as malnutrition (E44.0, E41), pressure injuries (by stage), and behavioral symptoms affects the Nursing component NTA classification.
Common platforms include PointClickCare (the market-leading SNF EHR with integrated MDS and billing), MatrixCare SNF, Netsmart myUnity, American HealthTech (AHT), and OnShift (workforce/scheduling). Billing and revenue cycle tools often include Waystar, Zirmed (now Waystar), and payer-specific portals. Physician billing for SNF Part B services can be managed through general ambulatory PM systems such as athenahealth, Kareo, or AdvancedMD.
Verimedix handles the entire nursing home / snf revenue cycle — coding, submission, denials, and A/R — so your team can focus on patients.