Skilled Nursing Facilities are paid under a prospective payment system for Part A services. Skilled nursing facilities are reimbursed for Medicare Part A claims under a prospective payment system (PPS).

To recognize the differences in the resources used by SNF residents, each resident is classified into a Resource Utilization Group (RUG), based on data from the Minimum Data Set (MDS 2.0). There are different payment rates for each RUG. Thus, PPS allows greater reimbursement for patients requiring more care, i.e., more resources.

Per diem payment includes all covered services.

The PPS payments are based on per diem rates and cover all costs of furnishing covered SNF services - routine, ancillary and capital-related costs - except for the costs associated with approved educational activities and Medicare bad debts.

Reference

Skilled Nursing Facility Prospective Payment System and Consolidated Billing Manual at http://www.cms.hhs.gov/manuals/downloads/clm104c06.pdf

Claims Payment Timeliness Floor

All provider payments are subject to a holding period called the Claims Payment Timeliness (CPT) Floor.

As shown by the table below, the length of time a payment is held after receipt and before release to the provider depends upon the means by which the claim was submitted to the Fiscal Intermediary:

Clean claims defined

Claims differ in their level of complexity and in the amount of development or investigation required to resolve them. Claims which require no investigation or external inquiry are called clean claims.

Interest on clean claims

Interest will be paid to the provider if a clean claim is not paid within 30 days after its receipt by the Fiscal Intermediary.

Part B reimbursement

Items or services furnished to a resident of a SNF for which payment will be made under Part B will be paid under the applicable fee schedule if CMS has a fee schedule in place.

All other services will be paid according to their current payment methodology.

Negative reimbursement definition

When the total deductions on a claim (i.e., deductible plus coinsurance amounts) exceed the calculated provider reimbursement, the result is called negative reimbursement.