#OffshoreSNFBillingandcoding

[outsourcingmentalhealthbillin]

Adapting to CMS-1802-F: What SNFs Need to Know About Billing and Payment Shifts

Skilled Nursing Facilities (SNFs) are subjected to ongoing regulatory changes that affect the billing, coding, and payment for Medicare Part A services. The most recent revisions by the Centers for Medicare & Medicaid Services (CMS) introduce vital changes that have a direct impact on medical billing and coding procedures. Ranging from new payment rates to ICD-10 code mappings to updated enforcement measures and reporting requirements, these changes demand the attention of SNF administrators, coders, and billing staff.

An Overview of CMS-1802-F

CMS-1802-F is the final rule under which the CMS has implemented the Fiscal Year (FY) 2025 SNF Prospective Payment System (PPS) and Consolidated Billing. This rule determines under what conditions SNFs will be reimbursed under Medicare Part A, makes changes in clinical coding requirements, modifies the patient classification system (PDPM), and amends quality data reporting and enforcement policies that eventually affect billing practices.

CMS-1802-F rule was released on July 31, 2024, and is set to be published in the Federal Register on August 6, 2024. These final changes are not only policy changes, but also influence billing and coding operations on a daily basis. Proper and accurate medical coding, timely submission of data, and compliant documentation will be critical to ensure proper reimbursement and prevent penalties.

Billing and Payment Shifts Under CMS Final Rule FY 2025

To improve care quality and ensure fair reimbursement, CMS has introduced several billing and payment policy updates for SNFs under the FY 2025 Final Rule. Let us have a look at such changes:

PDPM ICD-10 Code Mapping Updates

CMS finalized technical updates to ICD-10 code mappings in the Patient-Driven Payment Model (PDPM). Specifically, four codes (E88.10, E88.811, E88.818, E88.819) will now fall under the “Return to Provider” category instead of “Medical Management.” CMS believes these diagnoses are not appropriate as primary reasons for SNF Part A stays.

Medical coders must stop using these diagnoses as the primary diagnosis for PDPM case-mix classification. Using an incorrect code could lead to claim denials or underpayment. SNFs need to review documentation and train coding staff to select more appropriate diagnoses when admitting residents. It is important to coordinate closely with physicians to ensure accurate, billable diagnoses are documented at admission.

SNF Quality Reporting Program (QRP) Changes

CMS has finalized the addition of four new Social Determinants of Health (SDOH) items, such as living situation, utilities, and two food-related questions, into the SNF QRP. It also modified the existing transportation item to align better with federal screening tools. These data elements will be collected through the Minimum Data Set (MDS) for admissions on or after October 1, 2025.

Although these changes are focused on data collection, failing to report them properly can lead to a 2% reduction in SNF PPS payment updates. Clinical and MDS staff need to be trained on how to accurately gather and document these new SDOH measures. Billing teams must track compliance with QRP submissions to avoid future payment penalties. Though this is not a coding change, it has direct financial implications.

Updated SNF Market Basket Base Year

CMS has revised the SNF market basket base year from 2018 to represent current industry costs more accurately. This revision makes the rates more precise and reflect today’s operational costs. CMS normally revises the base year every four years, but this update came earlier to account for post-pandemic changes in SNF costs.

Medical billers and coders should be aware that reimbursement rates are now based on more recent financial information, which may better align with actual costs. SNFs should keep an eye on how this impacts their revenue estimates and plan accordingly. There are no coding modifications necessary, but finance and billing departments should recompute anticipated payments based on this new index.

SNF Value-Based Purchasing (VBP) Program Updates

CMS has introduced updates to the SNF VBP Program, including a new policy for selecting, retaining, or removing quality measures and a shift toward a more streamlined and equity-focused framework. A new “Health Equity Adjustment” will reward SNFs serving more underserved populations. CMS also plans to update readmission measures by 2027.

SNFs must closely monitor their performance on quality measures, as these directly affect reimbursements through the VBP program. SNF biller and coder needs to work with quality improvement teams to understand which metrics influence future payments and adjust strategies accordingly. Facilities that serve high-risk populations may benefit from the new Health Equity Adjustment but will need accurate coding and documentation to demonstrate eligibility.

Increase in SNF Payment Rate

CMS-1802-F rule has finalized a 4.2% increase in SNF Prospective Payment System (PPS) rates for FY 2025. This consists of a 3.0% market basket update, a 1.7% forecast error adjustment, and a -0.5% productivity adjustment. On average, SNFs are to receive $1.4 billion more in payments than FY 2024. This does not count the reductions from the SNF Value-Based Purchasing (VBP) program or the non-reporting quality data penalties.

Billing and coding team is required to use the revised payment rates as of October 1, 2024. Coders need to be aware of the rate changes when determining the reimbursements. Facilities must also stay in compliance with quality reporting to prevent having their payment increases cut due to penalties.

Data Validation Process for QRP Submissions

To improve the accuracy of quality data, CMS will begin requiring data validation for SNFs participating in QRP. Starting FY 2027, 1,500 SNFs will be selected annually to submit up to 10 medical records within 45 days of request. Failure to submit will result in a 2% penalty in their market basket update two years later.

SNFs must ensure that all quality-related data submitted through the MDS matches their internal medical records. Coding and documentation staff need to maintain accurate and consistent records that can support any submitted data. This requires improved coordination between clinical and billing teams and possibly auditing internal records more regularly to avoid penalties.

How can ICS help SNFs Adapt to CMS 2025 Changes?

With CMS finalizing new policies around civil money penalties, prior survey-based enforcement, value-based payment models, and stricter documentation requirements, SNFs face increasing pressure to maintain both compliance and financial stability. Outsourcing medical billing and coding services to a trusted company like InfoHub Consultancy Services means offering specialized support to help SNFs deal with these complex updates effectively.

For instance, with CMS now allowing both per-day and per-instance civil money penalties (CMPs) for the same deficiency, ICS can ensure accurate documentation and coding that minimizes regulatory violations and financial penalties. The company can also help SNFs meet evolving documentation standards and quality reporting metrics essential for success under CMS’s Value-Based Purchasing (VBP) and Quality Reporting Program (QRP).

Additionally, ICS can handle prior authorizations and manages the entire revenue cycle efficiently, helping SNFs respond to changes like retroactive penalties and multi-survey enforcement windows. With ICS, SNFs gain a reliable partner that ensures compliant billing and optimized reimbursement.

[outsourcingmentalhealthbillin]

Big CMS Changes Ahead for SNFs! The FY 2025 Final Rule (CMS-1802-F) brings updates to ICD-10 mappings, QRP, VBP, payment rates & more. Learn how your facility can stay compliant and boost revenue. ✅ Accurate Coding ✅ Timely Documentation ✅ Smart Outsourcing with ICS