Medicare Poised to Expand List of Medications Excluded from Consolidated Billing

Medicare Poised to Trim List of Medications Excluded from Consolidated Billing

SNFs now have a golden opportunity to speak up about an issue that prevents many patients from accessing their care.

We are now about a week away from the loss of the Medicare Part A skilled nursing facility (SNF) waiver, and patients will once again require a three-day inpatient admission to access that benefit. Dr. Juliet Ugarte Hopkins, president of the American College of Physician Advisors, wrote about it a few weeks ago, but let me add to that. Now is the time to sit down with your physical therapists and review the requirements for access to a SNF or inpatient rehabilitation facilities (IRFs). I suspect that many of you have been faced by a patient who had a physical therapy evaluation and was told by the therapist that they recommended transfer to a SNF or IRF, only to find out that the patient had Medicare and had not been admitted as an inpatient – or that the patient didn’t have the necessary three days to get to a SNF, or didn’t meet the IRF requirements for admission, or perhaps that they had a Medicare Advantage (MA) plan, which must give authorization for either SNF or IRF care. That is one difficult conversation that can be avoided if only the therapist would perform their evaluation, then come and talk to the case manager about the patient’s coverage before discussing the plan with the patient. It is much better to be honest and realistic with our patients than to make promises that cannot be fulfilled.

Speaking of SNFs, as many of you know, Medicare pays these SNF stays under Part A. And part of that payment structure is something called consolidated billing. Under this payment structure, the payment from Medicare to the SNF covers most services provided to the patient, including those that the SNF provides “under arrangement.” If a doctor orders an X-ray or an EKG on a patient in a SNF, the SNF has to arrange for the service to be provided and pay for the technical component. And like during an inpatient admission, the medication costs fall on the facility. But Medicare does have a list of services that are excluded from consolidated billing because of their high cost, such as CT scans, ED visits, surgery, radiation therapy, and some select chemotherapy agents. I am sure that some of you have had patients who warranted SNF care, but because the cost of one or more of their medications, the SNFs wouldn’t accept them.

Well, now is your chance to tell Medicare about that. In their 2024 proposed rule for SNFs, they are asking for suggestions of chemotherapy agents to be added to the exclusion list. Now, it may be difficult to remember the drug that led to the SNF refusing a patient, so perhaps we should all just suggest that the Centers for Medicare & Medicaid Services (CMS) set a price target, and any medication over that price should be excluded, be it a chemotherapy agent or a medication in any other class. For instance, we are seeing an increase in heart failure due to amyloid, and the oral medication to treat that, tafamidis, costs over $600 a day. As patients with heart failure often require SNF care after a hospitalization to regain their functioning, these patients would never be accepted, since the cost of that one pill would far exceed the daily payment to the facility for their care.

To submit your comment, go to this link and press “Comment.” Remember, CMS reads and responds to every comment. We saw the tremendous effects of comments to proposed rules with the changes to require MA plans to follow the Two-Midnight Rule.

Also of note is that CMS is proposing to add to the exclusion list payment for marriage and family therapist services, as well as mental health counselor services. It is nice to see that CMS recognizes that significant medical illness can have mental health effects on patients, spouses, and families.


Ronald Hirsch, MD, FACP, CHCQM, CHRI

Ronald Hirsch, MD, is vice president of the Regulations and Education Group at R1 Physician Advisory Services. Dr. Hirsch’s career in medicine includes many clinical leadership roles at healthcare organizations ranging from acute-care hospitals and home health agencies to long-term care facilities and group medical practices. In addition to serving as a medical director of case management and medical necessity reviewer throughout his career, Dr. Hirsch has delivered numerous peer lectures on case management best practices and is a published author on the topic. He is a member of the Advisory Board of the American College of Physician Advisors, a member of the American Case Management Association, and a Fellow of the American College of Physicians. Dr. Hirsch is a member of the RACmonitor editorial board and is regular panelist on Monitor Mondays. The opinions expressed are those of the author and do not necessarily reflect the views, policies, or opinions of R1 RCM, Inc. or R1 Physician Advisory Services (R1 PAS).

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