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SKILLED NURSING FACILITY  ("SNF") SERVICES
 

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A QUICK SCREEN TO AID IN IDENTIFYING COVERABLE CASES

Medicare Part A provides payment for post-hospital care in skilled nursing facilities (SNFs) for up to 100 days during each spell of illness.  A “spell of illness” begins on the first day a patient receives Medicare-covered inpatient hospital or skilled nursing facility care and ends when the patient has spent 60 consecutive days outside the institution, or remains in the institution but does not receive Medicare-coverable care for 60 consecutive days.

If Medicare coverage requirements are met, the patient is entitled to full coverage of the first 20 days of SNF care.  From the 21st through the 100th day, Medicare pays for all covered services except for a daily co-insurance amount; which is adjusted annually.

For 2011 the SNF copayment is:

  • Days 0-20: $0

  • Days 21-100: $141.50 / day

Skilled nursing facility coverage includes the services generally available in a SNF: nursing care provided by registered professional nurses, bed and board, physical therapy, occupational therapy, speech therapy, social services, medications, supplies, equipment, and other services necessary to the health of the patient.

Unfair denials of Medicare coverage for skilled nursing facility care occur with surprising frequency.  Because Medicare uses rules and procedures which may improperly restrict coverage, patients are sometimes required to pay for care which should be covered by Medicare.

Medicare should pay for skilled nursing facility care if:

  • The patient was hospitalized for at least three days and was admitted to the SNF within 30 days of hospital discharge.  (In unusual cases, it can be more than 30 days.)

  • A physician certifies that the patient needs SNF care.

  • The beneficiary requires skilled nursing or skilled rehabilitation services, or both, on a daily basis.  Skilled nursing and skilled rehabilitation services are those which require the skills of technical or professional personnel such as nurses, physical therapists, and occupational therapists.  In order to be deemed skilled, the service must be so inherently complex that it can be safely and effectively performed only by, or under the supervision of, professional or technical personnel.

  • The skilled nursing facility is a Medicare certified facility.

OTHER IMPORTANT POINTS

  • The restoration potential of the patient is not the deciding factor in determining whether skilled services are needed.

  • The management of a plan involving only a variety of “custodial” personal care services is skilled when, in light of the patient’s condition, the aggregate of those services requires the involvement of skilled personnel.

  • The requirement that a patient receive “daily” skilled services will be met if skilled rehabilitation services are provided five days per week.

  • Examples of skilled services:

    • Overall management and evaluation of care plan;

    • Observation and assessment of the patient’s changing condition;

    • Levin tube and gastrostomy feedings;

    • Ongoing assessment of rehabilitation needs and potential;

    • Therapeutic exercises or activities;

    • Gait evaluation and training.

  • The doctor is the patient’s most important ally.  If it appears that Medicare coverage will be denied, ask the doctor to help demonstrate that the standards described above are met.

  • If the nursing home issues a notice saying Medicare coverage is not available and the patient seems to satisfy the criteria above, ask the nursing home to submit a claim for a formal Medicare coverage determination.  The nursing home must submit a claim if the patient or representative requests it; the patient is not required to pay until he/she receives a formal determination from Medicare.

  • Don’t be satisfied with a Medicare determination unreasonably limiting coverage; appeal for the benefits the patient deserves.  It will take some time, but appeals are often successful.

What to do when Medicare denies coverage for skilled nursing facility care 

  • If the denial is oral (no written notice), call the Center for Medicare Advocacy for free advice.

  • If you have received a written denial, ask the nursing home to submit the claim to Medicare for a second formal opinion from the Medicare “Contractor”.  You do not have to pay the nursing home until you receive Medicare’s determination.

  • If coverage is still denied in Medicare’s determination, APPEAL.  Call the Center for Medicare Advocacy for legal help.  Download a Self-Help Packet here.  And please take a moment to share your story with us.


IMPORTANT PROVISIONS REINSTATED IN MEDICARE SKILLED NURSING FACILITY REGULATIONS

In July,1998 revisions were made to the federal regulations which made significant changes to the Medicare skilled nursing facility level-of-care requirements. The revisions created a lack of clarity about what constitutes skilled nursing and, therefore, about a beneficiary's ability to receive Medicare coverage for skilled nursing facility care. This confusion was resolved, one year later, when the important provisions defining skilled nursing were reinstated into the federal regulations. 64 FR 41670 (July 30, 1999).

The 1998 changes had eliminated "overall management and evaluation of a patient's care plan, observation and assessment of the patient's changing condition, and patient education services@ from the list of examples of skilled nursing services which, if delivered on a daily basis, qualify a patient for Medicare skilled nursing facility (SNF) coverage. 42 CFR '409.33(a)(1)-(3). These services are fundamental to basic nursing practice and, therefore, should have remained as a basis for determining a skilled nursing facility level of care. (See 42 CFR Section 409.32; The Lippincott Manual of Nursing Practice, 1996, page 5.) The changes resulted in the identification of only certain specific examples of nursing care, such as Foley catheter changes and intravenous or intramuscular injections, as skilled services which could trigger Medicare coverage for SNF care.

On April 28, 1999 HCFA Administrator Nancy-Ann Min DeParle responded to an inquiry regarding this issue from the Center for Medicare Advocacy (click here to view letter). Administrator DeParle confirmed that HCFA continued to consider these services skilled nursing care. In her letter, which is available from the Center, Ms. DeParle wrote:

...we did not intend that our deletion of care plan management/evaluation, observation/assessment, and patient education would indicate that we no longer regard these services as appropriate examples of skilled care. Rather, we made this revision in the belief that such services need no longer be separately identified in the administrative criteria since they are already effectively captured by the clinical proxies utilized in the [new] Resource Utilization Groups [RUGS], version III [payment] system of resident classification used under SNF PPS.
(Emphasis added.)

Fortunately for beneficiaries, these provisions were reinstated in the federal regulations issued in July, 1999. In reinstating the provisions the Secretary noted:

Our reason for deleting the explicit references in the regulations to management and evaluation, observation and assessment, and patient education was not that they no longer represented appropriate examples of skilled care, but rather, because we believed that these separate references were no longer necessary in view of the clinical indicators that have been incorporated into the upper 26 RUG-III groups. However, in order to avoid possible confusion on this point, we are accepting the commenters= suggestion to reinstate these categories as specific examples in the SNF level of care regulations. 64 FR 41670 (July 30, 1999).

The three reinstated regulation provisions incorporate some of the most critical nursing activities for invoking Medicare coverage. They are as follows:

1. Overall management and evaluation of an individual's care plan ( 42 CFR 409.33(a)(1));

2. Observation and assessment of the patient's changing condition. (This includes identifying and evaluating the patient's need for modification of treatment or for additional medical procedures until the condition stabilizes.) ( 42 CFR 409.33(a)(2));

3. Patient education services ( 42 CFR 409.33(a)(3 ) ).

Advocates should remember these important coverage rules and the administration's commentary when seeking benefits for skilled nursing facility patients in order to insure that they obtain the Medicare coverage to which they are entitled. The regulations and related commentary, quoted above, should be brought to the attention of hospital discharge planners, SNF providers, fiscal intermediaries, administrative law judges, and others interested in Medicare skilled nursing facility determinations. This is particularly true when advocating on behalf of patients whose need for daily skilled nursing services may not be identified through the process of establishing a RUGS classification.


THE MEDICARE PROSPECTIVE PAYMENT SYSTEM 

Payment System Prior to July, 1998: Retrospective and Cost-Based

Until July, 1998, nursing homes used to be reimbursed for care provided to Medicare Part A-covered residents residing in Medicare-certified beds through a retrospective cost-based system. The rate received by a nursing home for a Medicare covered resident was based on three components:

Routine costs: These consisted of the services included in the facility's daily charge;

Ancillary costs: These key charges were those that were directly attributable to individual resident care needs, such as therapy, drugs and lab charges. Physical therapy, for example, was covered separately by Medicare based upon a determination regarding medical necessity. There was, therefore, a fiscal incentive for nursing homes to provide such therapy to Medicare Part A covered residents;

Capital costs: costs of land, buildings and equipment.

Prospective Payment System (PPS) Mandated as of July 1, 1998

The Balanced Budget Act mandated a prospective per diem rate for the Medicare SNF benefit. All three components which comprised the previous rate are folded into the new prospective rate. The prospective rate is based upon a case-mix system, with the reimbursement premised upon measuring the type and intensity of the care required by each resident and the amount of resources which are utilized to provide the care required.

To arrive at this measure, a classification system based upon resident acuity, called Resource Utilization Groups (RUGS-III), is used to place each Medicare-coverable resident into one of 7 major classifications and then into one of 44 categories. The classifications are mutually exclusive, meaning that every resident can be placed into one classification and no resident fits into more than one classification.

The process of placing residents into the RUGS-III classifications requires accurate and comprehensive information-gathering about a resident's characteristics and needs. This is a critical component of a RUGS classification because the RUGS classification has implications for both reimbursement and Medicare coverage.

Impact on Nursing Home Reimbursement

The RUGS classifications are hierarchical, with the higher categories providing greater reimbursement. The prospective reimbursement rate is being phased in over a three year transition period. Depending upon when a facility's cost reporting period ends, the phase-in begins either beginning October 1,1998 or January 1,1999. During the first year of implementation, the old facility-specific rate accounts for 75% of a facility's reimbursement with the prospective calculation accounting for 25% of a facility's rate. In the second year of operation, these percentages change to 50% each and in the third and final transition year, the respective percentages are 25% and 75%. By the fourth year, the entire reimbursement rate will be prospectively determined.

The Seven Major RUGS Categories

The seven major RUGS categories, in hierarchical order based upon intensity of resource utilization, are:

1. Rehabilitation (14 classifications)

2. Extensive Service (3 classifications)

3. Special Care (3 classifications)

4. Clinically Complex (6 classifications)

5. Impaired Cognition (4 classifications)

6. Behavior Only (4 classifications)

7. Decreased Physical Function (10 classifications)

There are 26 RUGS classifications within the first 4 major categories. These convey a presumptive Medicare coverage status at this time. The remaining 18 classifications are contained within the 3 lowest major RUGS categories.

Impact on Medicare Coverage: A Presumption of Medicare Coverage for "Upper 26"

The Health Care Financing Administration has announced that residents who are classified in the top 26 classifications are presumed to automatically meet the Medicare coverage criteria.

One might assume that a Medicare beneficiary who is classified into one of the top 26 RUGS categories would have an easy time with SNF placement. However, there appear to be barriers to SNF admission for some Medicare beneficiaries in the top 26 RUGS. These barriers appear to be caused by the high cost to SNFs of caring for certain groups of individuals seeking SNF admission. The common characteristics shared by those experiencing increasing difficulty gaining admission to SNFs include patients who meet the SNF coverage criteria, but who also require :

Kidney dialysis, with round-trip ambulance transportation to a dialysis center thee times a week;

Radiation therapy, with round trip ambulance transportation;

Fitting of a prosthesis;

Certain types of chemotherapy or other intravenous medications.

All of the costs of providing the services needed by those groups are subsumed in a SNF's Medicare prospective per diem rate. Many SNFs have informally communicated a reluctance to accept such individuals when Medicare is the apparent payment source, because of the costs involved. As a result, it appears that individuals who have these needs encounter difficulties to obtaining SNF placement.

By What Standard Will Those Classified in the "Lowest 18" Be Evaluated?

For residents who are classified in the lowest 18 classifications, no presumption of coverage will be applied. These residents will have their care needs reviewed on a case-by-case basis for the purpose of determining if Medicare coverage can be established. The Health Care Financing Administration announced in promulgating the new Medicare skilled nursing facility reimbursement regulations, that "existing administrative criteria@ should be used to evaluate whether or not a resident requires daily skilled care, the legal standard for Medicare coverage.

Three of the most critical nursing activities that can invoke Medicare coverage included in the administrative criteria are as follows:

1. Overall management and evaluation of an individual's care plan ( 42 CFR 409.33(a)(1));

2. Observation and assessment of the patient's changing condition. (This includes identifying and evaluating the patient's need for modification of treatment or for additional medical procedures until the condition stabilizes.) ( 42 CFR 409.33(a)(2));

3. Patient education services ( 42 CFR 409.33(a)(3 ) ).

Importantly, while these provisions were deleted from the regulations in July, 1998, they were reinstated by federal regulations issued in July, 1999. In reinstating theses provisions the Secretary noted:

Our reason for deleting the explicit references in the regulations to management and evaluation, observation and assessment, and patient education was not that they no longer represented appropriate examples of skilled care, but rather, because we believed that these separate references were no longer necessary in view of the clinical indicators that have been incorporated into the upper 26 RUG-III groups. However, in order to avoid possible confusion on this point, we are accepting the commenters= suggestion to reinstate these categories as specific examples in the SNF level of care regulations. 64 FR 41670 (July 30, 1999).

In an April 28, 1999 letter to the Center for Medicare Advocacy regarding the deleted examples of skilled nursing, Nancy-Ann Min DeParle, the Administrator of the Health Care Financing Administration, also made this important point:

...we did not intend that our deletion of care plan management/evaluation, observation and assessment and patient education would indicate that we no longer regard these services as appropriate examples of skilled care.

Advocates should remember these important coverage rules and the Administration's commentary when seeking benefits for skilled nursing facility patients in order to insure that they obtain the Medicare coverage to which they are entitled. This is particularly true when advocating on behalf of patients whose need for daily skilled nursing services may not be identified through the process of establishing a RUGS classification.  


SKILLED NURSING FACILITY ARTICLES AND UPDATES

 
 


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