Skilled Nursing Facility Payment Bans or Denial of Payment for New Admissions

Published 07/12/2022

Skilled Nursing Facility Payment Bans or Denial of Payment for New Admissions
Under the Social Security Act at Sections 1819(h) and 1919(h) and CMS’ regulations at 42 CFR 488.417, CMS may impose a Denial of Payment for New Admissions (DPNA) against a Skilled Nursing Facility (SNF) when a facility is not in substantial compliance with requirements of participation. For policy detail, see Internet-Only Manual (IOM) Pub. 100-02, Medicare Benefit Policy Manual, Chapter 8 (PDF), 'Coverage of Extended Care (SNF) Services Under Hospital Insurance,' Sections 20.3 –

New Admissions
A new admission occurs when a patient is admitted to an SNF where he has not previously received services.

The provider is liable for services rendered during a sanction period unless a Notice of Non-Coverage is issued to the beneficiary prior to admission. It is the provider's responsibility to notify the beneficiary, in writing that the service is non-covered and the reason why the service is non-covered. The Notice of Non-Coverage should indicate that Medicare will not be making payment for the stay due to the DPNA.

If the patient elects to receive services at the sanctioned facility, the patient assumes financial responsibility for the days the facility was sanctioned. These days are billed as non-covered, with occurrence span code 76 and are not deducted from the patient’s 100 skilled days. No utilization is applied to the beneficiary’s benefits record.

In addition to reporting the occurrence span code 76, condition code 21 is reported when submitting Medicare claims in order to receive a formal denial for supplemental insurance billing purposes. Providers should indicate in Remarks, 'DPNA – Beneficiary Notification Given.'

If a Notice of Non-Coverage was not issued to the beneficiary, the SNF assumes responsibility for the costs incurred during the sanction period. Payment sanctions are applied to days that would normally be paid, or days that the beneficiary was receiving skilled care in a Medicare bed. Since the patient is receiving skilled care, the days during the sanction period are counted as benefit days and are deducted from the patient’s 100 skilled days. Utilization is applied to the beneficiary’s benefits record.

The claim should be filed as a covered stay (covered days and covered charges) with occurrence span code 77 for the days the facility was under sanction. The covered units reported under revenue code 0022 should be the number of covered days minus the number of days reported under occurrence span code 77. Billing with occurrence span code 77 indicates that the provider should not be paid, but benefit days should be used.

Providers should indicate in Remarks, 'DPNA – No Beneficiary Notification Given.'

Medicare will pay for services rendered to a patient who is readmitted to a facility that is under a DPNA. A readmission occurs when the patient is admitted to a facility from which he has previously received services. It does not matter what type of service (skilled or non-skilled) the patient received or what type of bed he was in when previously at the facility.

If the patient was receiving services at the facility and leaves (such as admission to the hospital, goes home or takes a therapeutic leave of absence) then returns to the same facility that is now under a DPNA, Medicare payment can be made as long as the patient meets all other coverage requirements.

Claims for readmissions that are not subject to the payment ban should be submitted with condition code 57.

Previous stay dates should be reported with occurrence span code 80. Occurrence span code 80 is defined as the from/through dates of a prior same-SNF stay indicating a patient resided in the SNF prior to, and if applicable, during a payment ban period up until his discharge to a hospital.

Current Patients
Patients receiving services at the facility when the sanction is put into effect are not affected by the payment ban. The payment ban only applies to patients admitted during the sanction period. The billing requirements for these claims do not change.

Additional information regarding DPNA can be found in IOM Pub. 100-04, Chapter 6, Section 50 (PDF). 

Negative Medicare Reimbursement
Medicare payments may be reported as negative amounts on the Medicare Remittance Advices (MRAs). This is possible any time the patient share is greater than the Medicare reimbursement and the billed amount is greater than the Medicare share. This negative reimbursement will balance the patient share against the provider expected payments so patient refunds would not be required.

In this inpatient setting, negative reimbursements are encountered any time the cost of the stay is greater than the Patient Driven Payment Model (PDPM) Grouper rate and the billed amount is applied to the patient’s Medicare coinsurance. The negative reimbursement rule also applies to partial DPNA claims.

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