Skilled Nursing Facility Coding Services

The healthcare domain is in a constant state of flux with regular coding updates and additions. Within the value-based care continuum, extended care facilities must ensure positive patient outcomes while also dealing with the Prospective Payment System (PPS) and Consolidated Billing regulations. Skilled Nursing Facilities (SNFs) have been using medical coding services to improve accuracy while also remaining profitable.

Let us delve into the specific challenges faced by care facilities and how our dedicated medical coding support for skilled nursing facilities resolves these issues.

Coding Challenges faced by Skilled Nursing Facilities

On 10/04/2023, CMS issued the correction notice CMS-1779-CN for the federal/fiscal year 2024 pertaining to the SNF PPS final rule published on August 7. Even though the impact of this update may seem to represent only pennies per day in reimbursement rates, the corrections impact all PDPM urban and rural component rate tables and the rural wage index table.

Let us look at how various categories of codes cover the patient’s diagnosis as well as services performed on them.

HCPCS codes used for skilled nursing facility consolidated billing:

  • 99304: Initial Nursing Facility Care Per Day, for Evaluation and Management, Low Severity
  • 99305: Initial Nursing Facility Care Per Day, for Evaluation and Management, Moderate Severity
  • 99306: Initial Nursing Facility Care Per Day, for Evaluation and Management, High Severity

The relevant CPT code for this would be:

  • CPT 99304 – Initial nursing facility care, per day, for the evaluation and management of a patient, which requires these 3 key components: a detailed or comprehensive history; a detailed or comprehensive examination; and medical decision making that is straightforward or of low complexity.

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  • ICD-10 codes are used for diagnosis and maintaining case history of the patient:
    • Z50: This code relates to ‘care involving the use of rehabilitation procedures.’Skilled Nursing Facility Coding Services
    • 8 is the ICD-10 code for ‘care involving the use of other rehabilitation procedures.’
    • 89 relates to ‘encounter for other specified aftercare.’ (Effective from October 1, 2023.)
  • However, skilled nursing facilities need to deal with multiple other challenges such as:

    1. Coding Accuracy and Reimbursement: Studies estimate that SNF coding error rates range from 8% to 12.6%, leading to inaccurate reimbursement under the CMS Prospective Payment System (PPS) and potential penalties. (AHIMA 2019 study, Journal of AHIMA)
    2. Lack of dedicated and trained resources: There is a distinct lack of certified coding professionals specialized in CPT and HCPCS (procedural) codes besides ICD-10 (diagnostic) coding for skilled nursing facilities. Most extended care facilities are forced to depend on nurses and other in-house staff to handle their coding needs.
    3. Overburdening staff and documentation variability: While inconsistent documentation can lead to ambiguity and coding errors, keeping up with the paperwork can be a chore for in-house staff.
    4. Missed payments and denied claims due to inaccurate coding: A 2021 study by the University of Pittsburgh found that a single coding error in a SNF resident’s record resulted in a $1,500 underpayment. (Journal of the American Medical Association)
    5. Complex medical history of residents: SNF residents often have multiple chronic conditions and co-morbidities, making accurate diagnosis and procedure coding (HCPCS) intricate.
    6. Bundled Services: The PPS bundles many services, requiring coders to identify and code only non-bundled services for separate billing.


    • Technology Adoption: Utilizing advanced AI driven billing and coding software to improve accuracy and efficiency in medical coding.
    • Coder Certification and Training: Implementing specialized training and certification programs for SNF coders.
    • Collaborative Partnerships: Building partnerships between coders, clinicians, and administrators to improve documentation.

    Some of these steps entail large upfront costs which makes outsourcing the medical coding process an easy choice for Skilled Nursing Facilities.

    Outsource Coding Services for Skilled Nursing Facility

    Outsourcing the coding requirements of your skilled nursing facility to an external service helps address many challenges.

    • Improved Accuracy and Reduced Errors: Outsourcing to companies who employ certified coders specializing in skilled nursing facilities. These service providers understand the intricacies of CPT and ICD-10 codes and modifiers, which leads to fewer coding errors and higher reimbursement rates.
    • Enhanced Efficiency and Productivity: SNF staff can focus on patient care while experienced coders handle time-consuming coding tasks, improving overall operational efficiency.
    • Reduced Costs and Resource Savings: Outsourcing eliminates the need for SNFs to invest in training, software, and infrastructure for in-house coding, leading to cost savings.
    • Compliance Expertise and Updates: Companies offering skilled nursing facility coding services stay updated on the latest coding regulations and requirements, ensuring compliance, and minimizing the risk of audits and penalties.
    • Scalability and Flexibility: Outsourcing allows care facilities to easily scale their coding needs up or down based on patient volume and workload, without hiring additional staff.
    • Data-Driven Insights and Reporting: Many prior authorization companies offer data analytics and reporting tools, providing skilled nursing facilities with valuable insights into coding patterns, reimbursement trends, and areas for improvement.

    Challenges and Considerations of Outsourcing:

    • Choose a reputable and experienced outsourcing partner specializing in SNF coding to ensure quality and security.
    • SNFs must ensure the medical coding company has robust data security measures to protect patient information.
    • Clear communication and collaboration between the SNF and the outsourcing partner are essential for maintaining accuracy and efficiency.

    Specialized Coding Services for Skilled Nursing Facility Practices

    No matter the acuity level of the resident, our coders help you get reimbursed for services rendered. Stringent coder training, advanced billing software, AI and cutting-edge processes let us deliver accurate SNF coding at minimum costs with zero compliance issues.

    Our prior authorization service come with the commitment of:

    • Error free patient entry
    • Real time transaction audits for patient and charge entry
    • Claims submission within 48 hours of receiving patient (demographic & insurance) and service information
    • Rejection follow-up within 24 hours
    • Tracking and follow-up of partial or incorrect payments
    • Denial management based on detailed analysis
    • Methodical and proactive AR follow-ups
    • Timely payment posting to reflect accurate AR
    • HIPAA compliance
    • Customized reporting for
      • Claims submission
      • Collections
      • Denials
      • Accounts receivables

    Choose the Right Coding Service for Your Skilled Nursing Practice

    As a strategic partner in medical coding for your skilled nursing facility, we bring:

    • Reduction in operational cost by 80%
    • Better recovery rate with the highest collection ratio

    Get ICD-11 ready, certified coders and a partner dedicated to your growth. Talk to our experts today to find out how we can help your practice thrive.

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