Skilled Nursing Facility Billing 2026: SNF Codes, Part A vs Part B & Denial Patterns

Skilled nursing facility billing sits at the intersection of two Medicare payment systems — Part A for the facility and Part B for the physician — and errors in distinguishing the two cost practices tens of thousands in denials and recoupments annually. The qualification rules for SNF Part A are specific, time-limited, and actively audited by RAC contractors.

SNF Part A vs Part B: The Distinction That Matters Most

When a patient is admitted to a skilled nursing facility under Medicare Part A, the SNF receives a bundled per-diem payment that covers most services including nursing care, therapy, and many ancillary services. Physicians who see patients during a Part A stay bill separately under Part B using SNF visit codes — that revenue is yours to capture regardless of what the facility bills.

Qualifying for SNF Part A Coverage: The 3-Day Rule

Medicare Part A SNF coverage requires a qualifying inpatient hospital stay of at least 3 consecutive days (not counting the discharge day). Observation status days don't count — this is one of the most consequential distinctions in Medicare billing, and patients who don't know about it regularly end up owing the facility directly for their SNF stay.

Once the qualifying stay is confirmed, Part A covers SNF care for up to 100 days per benefit period: days 1–20 at 100% with no coinsurance, days 21–100 with a daily coinsurance ($204 per day in 2026). After day 100, the patient is responsible for all costs.

Documentation Requirements for SNF Physician Visits

SNF visit notes follow the same MDM framework as outpatient E&M since the 2021 coding changes. The level is driven by:

• Number and complexity of problems addressed
• Amount and/or complexity of data reviewed
• Risk of complications and morbidity or mortality

The note must reflect the actual work done, not a template fill-in. RAC auditors specifically look for cloned notes across sequential SNF visits — identical language on day 3 and day 12 is a red flag that triggers additional documentation requests.

Skilled Service Requirement: What Counts

Part A SNF coverage requires that the patient be receiving a skilled service — defined as care that can only be performed by or under the supervision of licensed technical or professional personnel. Skilled nursing services include IV administration, wound care requiring professional judgment, and complex medication management. Skilled therapy includes PT, OT, and SLP when the patient has a condition requiring the skills of a therapist to perform safely and effectively.

Custodial care — help with daily activities, medication reminders, basic wound dressing that a layperson could perform — doesn't qualify. When a patient's skilled needs end, Part A coverage ends, regardless of how many days remain.

OIG and RAC Audit Focus Areas for SNF Billing

The OIG Work Plan has included SNF services repeatedly. Current focus areas:

• Claims for patients who didn't have a qualifying 3-day inpatient stay
• SNF stays continuing past the point where skilled needs ended (custodial care billed as skilled)
• Therapy minutes claimed without corresponding documentation
• Physician visits billed when the patient was in custodial-only status