Common Skilled Nursing Facility Billing Mistakes That Could Jeopardize Your Revenue

Skilled nursing facility billing works like fuel for driving an SNF as it plays the most critical for the financial health of the practice. The truth is that the nature of the skilled nursing facility billing services is intricate and a single error in the billing process can lead to revenue loss and other severe consequences.

One of our clients, a busy skilled nursing facility was known for excellent care. But what kept it running smoothly wasn’t just the hardworking staff—it was their billing system. This system made sure money flowed in so they could continue caring for patients.

However, the billing process was complicated, like a puzzle. One mistake could lead to late payments, tight budgets, and even affect patient care. One day, a small error slipped through during claim submission. At first, it seemed minor, but soon, payments were delayed, and the team had to rush to fix things.

This experience showed them that skilled nursing facility billing wasn’t just about managing money—it was crucial to keeping the facility alive and thriving.

Federal insurance bodies like Medicare and Medicaid are very strict with the billing process. Errors in billing for these federal insurance organizations can cause your practice not to be allowed to bill for these entities for several years.

When it comes to running a successful long-term care facility billing, you must know about the frequent billing mistakes that practices often make so that you can efficiently avoid those mistakes.

Common errors in long-term care facility billing services:

1) Neglecting details on claims:

Even small errors like switching digits or misspelling names can have serious consequences, often resulting in claim denials. These seemingly minor mistakes disrupt the flow of revenue, causing delays that can quickly pile up. What might start as a simple oversight can lead to a time-consuming process of resubmitting claims and appealing denials, creating extra work for staff and slowing down payments. This not only affects the financial health of the facility but also diverts valuable resources away from patient care.

2) Billing the wrong payor:

Inaccurate patient information is one of the major reasons behind claim denials. Skilled nursing facilities often ignore confirming the primary and secondary insurance companies of their patients. Assuming a patient’s coverage without verification always leads to incorrect billing.

3) Missing prior authorization:

There are several SNF services like skilled nursing care, physical therapy, occupational therapy, speech therapy, durable medical equipment, wound care, IV therapies, and specialized nutrition services that require you to obtain prior authorization approval from a patient’s insurance company. The main objective of prior authorization is to ensure that the prescribed course of SNF treatment is medically justified and reasonable in terms of costs.

Different insurance companies have their own sets of rules and regulations regarding prior authorization. Furthermore, insurance companies are also increasing the list of SNF treatments that require PA, thus making the process of managing prior authorization really overwhelming for practices. Unable to receive PA approvals always leads to claim denials and hampered cash flow.

4) Inaccurate coding:

Most skilled nursing facility billing claims are rejected due to coding mistakes. There is a substantial number of procedural and diagnosis codes that your administrative team needs to deal with. Amateur in-house coders often make mistakes by assigning the wrong code. Apart from this mistake, unbundling and upcoding are the frequent reasons behind coding errors. Upbundling typically happens when you use two separate codes for procedures that are supposed to be billed as one single code. When you use a higher-level code than the justified one, it is called upcoding. Insurance companies consider both these mistakes as serious billing offenses.

5) Duplicate billing:

A lot of times, SNF practices bill for the same procedure more than once. This kind of discrepancy is known as duplicate billing, and it often occurs due to clerical mistakes such as entering the same service twice in error. These errors can slip through the cracks during the hectic pace of daily operations, especially when multiple staff members are involved in the billing process. Duplicate billing not only complicates the revenue cycle but also triggers claim rejections from payers. This forces the facility to spend extra time and resources on identifying the errors, resubmitting corrected claims, and waiting for payments to be processed. Moreover, repeated issues with duplicate billing can raise red flags with insurance companies and regulatory bodies, potentially leading to audits or fines.

6) Using wrong modifiers:

Misuse of modifiers is also one of the common reasons behind claim denials. Assigning an incorrect modifier or not using one when necessary can also cause claim denials and poor cash flow for your practice.

7) Poor AR management:

Most skilled nursing facilities lack experienced staff members who can manage accounts receivable efficiently, thus causing an increased number of delinquent accounts and substantial revenue leakage during the fiscal year. Accounts receivable is the money that your practice owes from your patients and their insurance companies. The more time an account remains delinquent, the less chance you have to receive payment from that account.

8) Inefficient denial management:

Most SNFs lose a significant amount of money due to claim denials. However, almost 60% to 65% of claims are recoverable. This means with a robust denial management process, involving proper appeals, correction and resubmission, you can recover the majority of denied claims. Unfortunately, practices often lack a team of experienced denial management professionals, thus leaving their practices with a chunk amount of unresolved denied claims and significant revenue leakage.

Fortunately, you can avoid all these critical mistakes in your skilled nursing facility billing services by outsourcing. You can delegate the entire billing operations to a professional third-party revenue cycle management company like Sunknowledge. Outsourcing enables you to fully focus on skilled nursing care, while we take care of your end-to-end billing cycle.

For the past decade, we’ve been a reliable partner in medical billing. Our team understands what it takes to manage your revenue cycle effectively. With skilled billers and coders who are well-versed in inpatient guidelines, we help reduce your operational costs by up to 80%, making us a trusted choice. To learn more about the revenue cycle management process, schedule a non-obligatory call with one of our experts.