Skilled Nursing Facilities (SNFs) billing services to Medicare Fiscal Intermediaries (FIs)

This article is based on Change Request (CR) 3962, which provides 1) Skilled Nursing Facility/Swingbed (SNF/SB) payment rate updates and 2) Health Insurance Prospective PaymentSystem (HIPPS) coding changes as a result of the refined case-mix system effective January 1, 2006.

The new HIPPS codes that will be added to the Medicares claims processing system result from the addition of 9 new Resource Utilization Group III (RUG-III) categories implemented by the 2006 final rule for SNF and SB Prospective Payment System (PPS). CR3962 is effective for claims with dates of service on or after January 1, 2006.

See the Background section of this article fort further details regarding these changes.

Annual updates to the Prospective Payment System (PPS) rates relating to Medicare payments and consolidated billing for Skilled Nursing Facilities (SNFs) are required by the Social Security Act (Section 1888(e)), as amended by:

• The Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999 (BBRA), and
• The Medicare, Medicaid and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA).

In addition, CMS is refining the case-mix system effective January 1, 2006.

The SNF PPS Final Rule for FY 2006 implemented nine new RUG-III categories that will be added effective for dates of service on or after January 1, 2006. Because of the addition of these nine new RUG-III groups, CR3962 includes nine new Health Insurance Prospective Payment System (HIPPS) codes that are listed in the following table:

These changes will be reflected in an updated SNF PPS Pricer, and the complete list of new HIPPS Codes is included as an Attachment to CR3962.

Note: The HIPPS code has five digits that include the following two components:

• A three-digit classification code assigned to each RUG-IIIcode, and
• A two-digit assessment indicator that specifies the type of Medicare-required assessment used to support billing.

CR3962 also includes the following instructions:

• The case-mix system will be refined effective January 1, 2006; wage indices effective 10/1/05 will continue to apply;
• Medicare systems shall:
• Apply the FY 2006 SNF PPS payment rates that are effective for dates of service on or after January 1, 2006 through September 30, 2006;
• Discontinue temporary add-on payments, except for the add-on payment for residents with AIDS, with the implementation of the 53-Group RUG-III coding system;
• Edit the following therapy HIPPS codes, billed under the 0022 revenue code with units greater than 10 on bill types 18x or 21x, to ensure that at least one therapy ancillary revenue code, either 042x, 043x, or 044x, is reported on the claim:
  • RHLxx, RHXxx, RLXxx, RMLxx, RMXxx, RVLxx and RVXxx;
• Edit the following therapy HIPPS codes, billed under the 0022 revenue code with units greater than 10 on bill types 18x or 21x, to ensure at least two different therapy ancillary revenue codes, either 042x and/or, 043x and/or, 044x, are reported on the claim:
  • RULxx, RUXxx;

The implementation date for this instruction is January 3, 2006.

For complete details, please see the official instruction issued to your intermediary regarding this change. That instruction may be viewed by going to:
http://www.cms.hhs.gov/Transmittals/

From that Web page, look for CR3962 in the CR NUM column on the right, and click on the file for that CR. If you have any questions, please contact your intermediary at their toll-free number, which may be found at:
http://www.cms.hhs.gov/medlearn/tollnums.asp