Answer: In the Balanced Budget Act of 1997, Congress mandated that payment for the majority of services provided to beneficiaries in a Medicare covered Skilled Nursing Facility (SNF) stay be included in a bundled prospective payment made through the fiscal intermediary to the SNF. These bundled services had to be billed by the SNF to the fiscal intermediary (FI) in a consolidated bill. No longer would entities that provided these services to beneficiaries in a SNF stay be able to bill separately for those services. Medicare beneficiaries can either be in a Part A covered SNF stay, which includes medical services as well as room and board, or they can be in a Part B non-covered SNF stay in which the Part A benefits are exhausted, but certain medical services are still covered though room and board is not.

For Medicare beneficiaries in a non-covered stay, only therapy services are subject to consolidated billing. All other covered SNF services for these beneficiaries can be separately billed to and paid by contractors or FIs.

Medicare recovery letters will contain a spreadsheet identifying the patients and claims that are included in the SNF consolidated billing overpayment.

Reference: The CMS SNF Consolidated Billing web page.

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