SNF and Supplier Responsibilities

10.4.2 - SNF and Supplier Responsibilities (Rev. 412, Issued: 12-23-04, Effective: 05-21-04, Implementation: 01-24-05) Problems involving the absence of a valid arrangement between an SNF and its suppliers typically tend to arise in one of the following two situations. Problem Scenario 1: An SNF elects to utilize an outside supplier to furnish a type of service that would be subject to Part A consolidated billing, but then fails to inform the supplier that the resident receiving the service is in a covered Part A stay. This causes the supplier to conclude mistakenly that the service it furnishes to that resident is not subject to consolidated billing. Based on the inaccurate impression that the resident’s SNF stay is noncovered, the supplier inappropriately submits a separate Part B claim for the service, and may also improperly bill other insurers and the resident. Then, the supplier only learns of the actual status of the resident’s Medicare- covered SNF stay when that Part B claim is denied. In this scenario, even though the supplier made reasonable efforts to ascertain from the SNF both the beneficiary’s status as an SNF resident and the specific nature of the beneficiary’s SNF stay, the information from the SNF (on which the supplier relied) proved to be inaccurate. While we recognize that inadvertent errors may occasionally occur in the course of furnishing such information, an SNF should not only make a good faith effort to furnish accurate information to its supplier, but must reimburse the supplier once such an error is called to its attention. If, in the scenario at issue, the SNF refuses to pay the supplier for the service even after being apprised of the inaccuracy of its initial information, the SNF would not be in compliance with consolidated billing requirements. As discussed previously, having supporting documentation in place for the disputed service would not only help to ensure compliance with the consolidated billing requirements, but should also provide a vehicle for resolving the dispute itself. Of course, the SNF can often prevent such disputes from arising to begin with, simply by ensuring that the supplier receives accurate and timely information about the status of a resident’s Medicare-covered SNF stay. The SNF’s responsibility to communicate accurate and timely resident information to its suppliers is especially important in those instances where a particular portion of an otherwise bundled service remains separately billable to Part B (for example, the professional component that represents a physician’s interpretation of an otherwise bundled diagnostic test). Problem Scenario 2: A resident temporarily departs from the SNF on a brief leave of absence, typically accompanied by a relative or friend. While briefly offsite, the resident (or the relative or friend, acting on the resident’s behalf) obtains services that are subject to the consolidated billing requirement, but fails to notify the SNF. The SNF refuses to pay for the offsite services, and the supplier bills the beneficiary/family member directly. As in the previous scenario, the SNF remains responsible for any services included in the SNF “bundle” of services subject to consolidated billing that are furnished to the resident by an outside entity, even in the absence of a valid arrangement with the SNF. The SNFs can act to prevent such problems from arising by ensuring that each resident (and, if applicable, his or her representative) is fully aware of the applicable requirements. For example, while the Medicare law at §1802 of the Act guarantees a beneficiary’s free choice of any qualified entity that is willing to furnish services to the beneficiary, in selecting a particular SNF, the beneficiary has effectively exercised this right of free choice with respect to the entire package of services for which the SNF is responsible under the consolidated billing requirement, including the use of any outside suppliers from which the SNF chooses to obtain such services. SNF staff need to communicate these requirements to beneficiaries and family members upon admission. Further, in providing such advice periodically throughout each resident’s stay, the SNF should take particular care to include any resident who is about to leave the facility temporarily, in order to ensure that the resident (and, if applicable, the resident’s representative) understands the need to consult the SNF before obtaining any services offsite. Moreover, while the SNF itself should take reasonable steps to prevent such problems from arising, the supplier in this scenario is also responsible for being aware of and complying with the consolidated billing requirements. This means that prior to furnishing services to a Medicare beneficiary, the supplier should routinely ascertain whether the beneficiary is currently receiving any comprehensive Medicare benefits (such as SNF or home health benefits) for which Medicare makes a bundled payment that could potentially include the supplier’s services. If the supplier ascertains that a particular beneficiary is, in fact, a resident of an SNF with which the supplier does not have a valid arrangement in place, then the supplier should contact the SNF before actually furnishing any services to that beneficiary that are subject to the consolidated billing provision. Further, under the regulations at 42 CFR 489.21(h), the beneficiary cannot be charged for the bundled services.