Compliance claims are the unsung heroes of the skilled nursing facility (SNF) billing process. When submitted accurately and timely, they keep the billing highway free from the backed-up traffic of claims denials and improper reimbursement. They are an often overlooked but necessary step in the SNF billing process.
Think of the Medicare billing process like driving on a busy highway. Every resident’s care journey is a vehicle on that road, and CMS (Centers for Medicare & Medicaid Services) is the traffic control center, monitoring every lane to help ensure smooth, legal, and efficient travel. A compliance claim is like a checkpoint or toll booth—a tracking mechanism that helps ensure each vehicle (resident’s care) is on the right path, using the correct lanes (benefits), and not bypassing any rules. These checkpoints help CMS verify that Medicare recipients are receiving the benefits they’re entitled to—and that no one’s taking a detour into fraudulent billing territory.
There are four key types of compliance claims, each like a different kind of road sign or checkpoint:
No Pay
Mrs. Doe has been admitted to your facility for a Medicare Part A stay. Upon completion of rehabilitation therapies, she will be discharged from skilled services but remain in a Medicare-certified bed under a non-skilled level of care. Since Mrs. Doe will not physically discharge from the facility, CMS requires the submission of a No Pay compliance claim, which can be submitted monthly or upon discharge from the facility. This claim serves to notify CMS that she has been discharged from the skilled level of care but remains a resident in the facility. If Mrs. Doe leaves the facility overnight at any point, a final No Pay compliance claim must be submitted using the appropriate discharge status code. Failure to submit this final claim may result in claim denials for other providers. For example, CMS may question how she could be admitted to a hospital while still listed as a resident in your census.
Maintaining an accurate and up-to-date census is essential for timely and accurate billing. Proper documentation helps ensure smooth claim processing and prevent unnecessary delays or denials.
Benefits Exhaust
Mr. Doe has been admitted to your facility under Medicare Part A for skilled care and has utilized his full 100-day benefit period. Although his Part A benefits are now exhausted, he continues to receive a Medicare defined skilled level of care—such as therapy five distinct days per week. It is critical to submit monthly Benefits Exhaust compliance claims to CMS to document that Mr. Doe remains at a skilled level of care. If these claims are not submitted and 60 days pass without notification, CMS may erroneously reset his benefit period. This error can have serious downstream consequences. For instance, if Mr. Doe is later hospitalized and meets the three-midnight requirement, he could be readmitted to your facility—or another—under Part A benefits he is no longer eligible for. This would result in improper payments that will eventually be identified and recouped from the providers involved. To avoid compliance issues and financial risk, it is essential to maintain accurate documentation and submit timely compliance claims.
Skilled Qualifying Stay or Transfer Requirement Not Met
Mrs. Doe has been discharged from a hospital after two midnights and is admitted to your facility for daily skilled nursing care. Medicare requires the submission of monthly compliance claims reflecting a skilled level of care even if the resident doesn’t qualify for a Medicare Part A stay due to not having a qualifying hospital stay. This type of claim does not count against her Medicare benefit period, but it is essential for notifying CMS that she is receiving skilled-level services so that a new benefit period is not incorrectly obtained. Timely submission helps to ensure compliance and maintain accurate records for future eligibility and billing purposes.
Medicare Advantage (MA) Informative
Mr. Doe is enrolled in a Medicare Advantage (MA) plan through XYZ Insurance Company. He is admitted to your facility for skilled care, which is authorized and reimbursed according to the terms of his MA plan. Admission to skilled care under an MA plan is considered a qualifying event, allowing the beneficiary the option to transition back to traditional Medicare if they choose. Mr. Doe elects to make this transition, and Medicare begins paying Part A benefits—up to the full 100-day benefit period. But how is this possible? Shouldn’t the days he received skilled care under the MA plan reduce his available Part A days? Yes, they should. However, if an MA Informational Compliance Claim is not submitted to CMS each month while Mr. Doe is receiving skilled care under the MA plan, CMS has no record of those days being used. As a result, Mr. Doe may receive traditional Medicare Part A benefits he is not entitled to. Just like in the case of a Benefits Exhaust Compliance Claim, this discrepancy will eventually be identified, and CMS will recoup any improper payments made in error—potentially impacting your facility and other providers involved. To help ensure compliance, accurate benefit days available, and protect against future recoupments, it is essential to submit timely MA Informational Compliance Claims for all residents receiving skilled care under an MA plan.
When a SNF fails to accurately track a patient’s demographics and level of care with Medicare, it’s like misreading road signs and ignoring traffic signals on a complex highway system. This misstep can lead to a series of roadblocks and detours:
- A benefit period might reset incorrectly—like taking an unintended exit that sends you miles off course.
- Hospital, SNF, or outpatient therapy claims could be denied—similar to hitting a dead-end or encountering a road closed sign.
- If the patient hasn’t been properly discharged, the SNF might be held responsible for services they didn’t expect to cover—like being ticketed for driving in a restricted lane.
Even if a claim initially gets through, it might later be flagged and “towed” (recouped), sometimes years down the road. This kind of error can cost tens of thousands of dollars—like paying for a toll road you never meant to enter.
Ultimately, not following the Medicare billing “traffic laws” can result in serious financial penalties, just like ignoring road rules can lead to fines, delays, and accidents. Staying on the right path with proper documentation and compliance is the best way to help ensure a smooth and cost-effective journey.
Forvis Mazars is pleased to offer our Compliance Claims Billing Tool, designed to help you navigate billing requirements and understand the specifics of each claim type. More information on Compliance Claims can also be located in the CMS Claims Processing Manual, Chapter 6, Section 40.8. If you have any questions or need assistance, please reach out to one of our professionals.