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 ($217 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

See how Rcmaxis handles the full scope of Skilled Nursing Facility billing on our Skilled Nursing Facility billing services page.

Tracking the Three-Day Qualifying Stay

The three-day rule is simple to state and easy to get wrong. The patient needs at least three consecutive inpatient days in the hospital, not counting the day of discharge, and observation days don't count. The most common trap is a patient who spent three days in the hospital but was in observation for one or more of them. That patient doesn't qualify for Part A SNF coverage, and the hospital's status decision decides it.

Build a verification step into admissions: ask the hospital for the inpatient admission order date and the discharge date, and confirm status before the patient arrives. If the stay doesn't qualify, you need to know before the first day is billed, not after the claim is denied.

Keeping Skilled Need Documented Every Day

Part A coverage continues only while the patient needs skilled care. That's a daily question. The record should show what skilled service was provided, by whom, and why a licensed professional was needed. Language like "resting comfortably" or "continues plan of care" doesn't show skilled need on its own.

The audit risk builds toward the end of the stay. Claims for days after skilled needs ended, when the care had become custodial, are a common finding. Set a weekly review where the therapy team, nursing, and the physician confirm whether skilled need continues and record the answer. If it ends, plan the transition rather than continuing to bill Part A.

Separating Facility and Physician Billing

The facility bills Part A for the bundled per-diem, and the physician bills Part B for their own services. Mixing them up is the root of many SNF denials. Physician visit notes should stand on their own under the same medical decision making rules used in the office, and the claims should go to the correct payer on the correct form.

Keep a short reference sheet showing which services are bundled into the per-diem and which are billed separately by the physician. When a new biller joins the team, that sheet saves weeks of trial and error and prevents repeat denials.

Use a Weekly Interdisciplinary Review to Protect Coverage

A weekly review with nursing, therapy, and the physician is the best control on Part A coverage. For each resident, ask the same questions: is a skilled service still being provided, is it documented, and what is the expected end date? Record the answers in the chart, and adjust billing when the answer changes.

It also protects residents. When skilled need is ending, the team can plan the transition, and the resident and family get notice instead of a surprise. That planning includes giving the required notices before coverage ends, which matters both for compliance and for the relationship with the family.

Keep the review notes. They show that coverage decisions were made deliberately, day by day, not assumed to continue.

SNF Billing Quick Checklist

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

Do observation days count toward the 3-day SNF qualifying stay?

No. Only days where the patient is formally admitted as an inpatient count toward the 3-day qualifying stay for SNF Part A coverage. Observation status days, even when the patient is physically in the hospital, do not count.

Can a physician bill for SNF visits when the patient is on Medicare Part A?

Yes. Physician visits during a Part A SNF stay are billed under Medicare Part B using CPT codes 99304-99310. The facility's Part A per-diem payment covers facility services, not physician services. Both claims are submitted to Medicare simultaneously in different payment systems.

What is the Medicare daily coinsurance for SNF days 21-100 in 2026?

The Medicare SNF coinsurance for days 21-100 is $217 per day in 2026. Days 1-20 are covered at 100% with no coinsurance. After day 100, Medicare Part A provides no SNF coverage and the patient is responsible for all costs.