On July 13, 2007, the Centers for Medicare and Medicaid Services (CMS) issued Transmittal Number 1290, to remind operators of skilled nursing facilities and swing bed providers (collectively here, SNFs) that they must submit informational claims for beneficiaries in a Part A stay and enrolled in Medicare Advantage (MA) Plans to their fiscal intermediary (FI) or Part A/Part B Medicare Administrative Contractor (Contractor) for purposes of updating the beneficiary's Common Working File (CWF). However, the transmittal further clarifies that SNFs that provide services to beneficiaries enrolled in a MA Plan must look to the MA Plan for payment, rather than traditional "fee-for-service" Medicare.

Transmittal Number 1290 incorporates new provisions into Chapter 6 (SNF Inpatient Part A Billing) of the Medicare Claims Processing Manual that require SNFs to apply certain policies when providing services to MA Plan beneficiaries. Where a SNF does not participate in a beneficiary's MA plan, CMS clarifies that the SNF must notify the beneficiary that it does not participate in the MA Plan because the beneficiary would become private-pay under such circumstances. On the other hand, where a SNF participates in a beneficiary's MA plan, the SNF should seek pre-approval from the MA Plan for the SNF stay and if the plan denies coverage, the SNF must appeal such denial to the MA plan, rather than the Medicare FI or Contractor.

The changes to the Medicare Claims Processing Manual, which become effective January 1, 2008 and will be implemented January 7, 2008, instruct SNFs to count the number of days paid by a beneficiary's MA Plan towards the number of Part A days used by the beneficiary. An informational claim should be submitted to the Provider's FI or Contractor for purposes of subtracting benefit days from the CWF records. The covered claims should include a HIPPS code, room and board charges and condition code 4, which indicates that it is an informational only bill. If a beneficiary drops his or her MA plan during the course of the SNF stay, CMS indicates that the beneficiary will be covered under Medicare fee-for-service for the remainder of days available to the beneficiary under his or her initial 100 available SNF days.

Ober|Kaler's Comment: SNFs should exercise caution in determining how to record and account for care provided to MA plan beneficiaries, paying particular attention to the status of the SNFs participation in the beneficiary's plan. On-going monitoring of MA plan beneficiary admissions will help SNFs track and identify the appropriate payment source and assist the SNF in its reporting obligations to CMS.