October 2026 SNF Consolidated Billing HCPCS Update

Therapy Codes Move Off File #1, Retained Only on File #4

Rcmaxis Billing & Policy Update  ·  Posted October 17, 2026  ·  Effective: October 01, 2026 (implementation October 05, 2026)

Summary of the Rule or Edit Change

Skilled nursing facilities operate under consolidated billing: for most services furnished to a resident during a covered Part A stay, the SNF bills Medicare directly and pays the furnishing provider itself, rather than letting an outside provider bill Medicare separately. CMS maintains several reference files that list exactly which HCPCS codes fall under this rule, and which are excluded. File #1 and File #4 are two of those reference files, each covering a different category of excluded or included services.

CR 14561, effective October 1, 2026 and implemented by contractors October 5, 2026, moves a set of therapy-related HCPCS codes off File #1 and keeps them exclusively on File #4. The practical effect depends entirely on what File #1 versus File #4 represents in your system's logic: a code's presence or absence on a given file determines whether an outside therapy provider can bill Medicare Part B directly for a SNF resident, or whether that service has to run through the SNF's own consolidated bill.

For outside therapy providers (physical therapy, occupational therapy or speech-language pathology practices that treat SNF residents under arrangement or by referral) and for SNF billing offices on the other side of that relationship, this file reclassification can flip how a specific therapy code should be billed starting with October dates of service.

Action Required for Billing Teams

If you're an outside therapy provider billing for SNF residents, or a SNF billing office managing consolidated billing for your facility's residents, pull CR 14561 and the updated File #1 and File #4 lists, and reconcile them against the codes you currently route through consolidated billing versus direct Part B billing.

Getting this wrong in either direction has a real cost. An outside therapy provider that keeps billing Part B directly for a code that moved exclusively to File #4 risks a denial or a later overpayment finding once the SNF also bills for the same service under consolidated billing. A SNF that doesn't update its own consolidated billing arrangement risks paying an outside provider for a service it should have billed to Medicare itself, or missing a service it now needs to absorb into its own bundled rate.

Our skilled nursing facility billing guide and physical therapy billing guide cover how consolidated billing interacts with outside therapy arrangements in more depth.