Medical Review of Skilled Nursing Facility Prospective Payment

6.1 – Medical Review of Skilled Nursing Facility Prospective Payment System (SNF PPS) Claims (Rev. 924; Issued: 11-15-19; Effective: 10-01-19; Implementation: 12-17-19) In 1998, Medicare began paying skilled nursing facilities (SNFs) under a Prospective Payment System (PPS). PPS payments are per diem rates based on the patient’s condition and determined through a CMS prescribed case-mix model and payment classification system. This classification is done by the use of a clinical assessment tool, the Minimum Data Set (MDS), and is required to be performed periodically according to an established schedule for purposes of Medicare payment. Each MDS represents the patient’s clinical status based on an Assessment Reference Date (ARD) and established look-back periods for the covered days associated with that MDS. Medicare expects to pay at the rate based on the most recent clinical assessment (i.e., MDS), for all covered days associated with that MDS. Medical review decisions are based on documentation provided to support the coding and medical necessity of services recorded on the MDS for the claim period billed. Medicare contractors focus on the unique, individualized needs, characteristics and goals of each patient, in conjunction with CMS payment policies, to determine the appropriateness of the case-mix classifier billed. All Medicare contractors are to review, in accordance with their medical review strategies, SNF PPS services covered by the consolidated billing policy. SNF services excluded from consolidated billing are identified in §4432(a) of the BBA and regular updates which can be accessed by contractors at: http://www.cms.gov/Medicare/Billing/SNFConsolidatedBilling/index.html. “Rules of thumb” in the Medical Review (MR) process are prohibited. Medicare contractors must not make denial decisions solely on the reviewer’s general inferences about beneficiaries with similar diagnoses or on general data related to utilization. Any "rules of thumb" that would declare a claim not covered solely on the basis of elements, including but not limited to, lack of restoration potential, ability to walk a certain number of feet, or degree of stability, is unacceptable without individual review of all pertinent facts to determine if coverage may be justified. Medical denial decisions must be based on a detailed and thorough analysis of the beneficiary’s total condition and individual need for care. The goal of medical review is to determine whether the services are reasonable and necessary, delivered in the appropriate setting, and coded correctly, based on appropriate documentation. Under PPS, beneficiaries must continue to meet the regular eligibility requirements for a SNF stay as described in Pub. 100-02, Medicare Benefit Policy Manual, chapter 8, §§20ff, such as the 3-day medically necessary hospital stay and admission to a participating SNF within a specified time period (generally 30 days) after discharge from the hospital.