Skilled Nursing Facility (SNF) Billing Guidelines: Top Tips

What’s the fastest way to lose money at a skilled nursing facility? Billing errors. Whether it’s missing documentation, misunderstood Medicare rules, or delays in filing claims, the smallest mistake can cost thousands.

Plus, for administrators juggling census targets, payer mixes, and a revolving door of billing staff, staying compliant isn’t easy.

That’s why we’ve compiled these SNF billing guidelines to help your team navigate billing more confidently, avoid costly mistakes, and protect your bottom line.

In this article, we’ll cover:

• Key SNF billing guidelines and compliance requirements

• Medicare billing rules and reimbursement strategies

• Best practices to minimize denials and maximize revenue

Understanding SNF billing basics

If you’re new to the process, you might be asking: What is SNF billing? It refers to how skilled nursing facilities get reimbursed for services like therapy, medications, and nursing care — each with its own coding and payer rules.

Billing for skilled nursing care isn’t as straightforward as hospital billing, and if you're in charge of making it all work, you already know that.

SNF billing involves a layered process that depends on accurate documentation, proper coding, and understanding which payer Medicare, Medicaid, or private insurance — is responsible for which services.

Each part covers different types of services, has separate documentation requirements, and demands close attention to timing. These are the two main parts: 

• Part A generally covers room and board, therapy, and nursing services when a patient qualifies for a SNF stay after a hospital visit.
  
  

• Part B, on the other hand, applies to things like outpatient therapy or physician visits — often overlapping with Part A services in ways that complicate billing if not carefully managed.

Getting this distinction wrong can lead to underbilling, double billing, or worse — denials.

What are the biggest billing challenges for SNFs?

Even the most experienced billing teams can struggle to keep up with the constant changes in reimbursement rules, payer requirements, and documentation standards.

The margin for error is small — and the financial impact of getting it wrong can be huge. Whether you're managing billing in-house or working with a third-party vendor, certain challenges show up again and again across SNFs:

• Claim denials eat up time and revenue. Denials often stem from missing or inconsistent documentation, incorrect codes, or late submissions. Each denial means staff have to chase down records, file appeals, and reprocess claims — wasting hours that could’ve been avoided with the right checks upfront.
  
  

• Incomplete documentation leads to billing gaps. If clinical teams aren’t trained on what’s required for billing — or if handoffs between departments are unclear — key details fall through the cracks. And when documentation doesn’t match what’s being billed, reimbursements stall or get rejected entirely.
  
  

• Coding errors delay payments and trigger audits. ICD-10 and CPT codes must be accurate and up to date, but staying current takes work. Even small mistakes, like using outdated codes or forgetting a modifier, can trigger payment delays or draw unnecessary attention from auditors.

Skilled nursing facility billing under Medicare requires familiarity with consolidated billing rules, classifications, and knowing exactly which services must be bundled versus billed separately.

Medicare SNF billing guidelines

After your facility gets Medicare certifications, understanding the nuances of Medicare billing is central to most SNFs' revenue. However, it also brings some of the most complex rules in the system. Between shifting payment models, strict documentation requirements, and bundled services under consolidated billing, it’s easy to make costly mistakes like these if your team isn’t dialed in:

• Consolidated billing limits what you can separately charge for: Under Medicare Part A, SNFs must bundle most services into a single payment. That includes labs, therapies, and some medications — even if they’re provided by an outside vendor.
  
  But not everything is bundled. Certain high-cost treatments and physician services may still be billed separately. Understanding these carve-outs is key to avoiding double billing or missed reimbursements.
  
  

• PDPM shifted how SNFs get paid: The Patient-Driven Payment Model (PDPM) replaced RUG-IV in 2019, moving reimbursement away from therapy minutes and toward patient complexity.
  
  Under PDPM, five clinical components determine payment: PT, OT, SLP, nursing, and non-therapy ancillaries. That means your documentation needs to clearly reflect a resident’s clinical condition — not just their therapy schedule.
  
  

• PDPM vs. RUG-IV: Under RUG-IV, facilities could increase reimbursement by delivering more therapy. PDPM removed that incentive and shifted focus to clinical accuracy. For billing teams, that requires a closer partnership with clinical staff to ensure assessments and documentation align with the billing data submitted.
  
  

• Coding under Part A and Part B needs clear separation: Part A typically covers SNF stays up to 100 days after a qualifying hospital stay, while Part B covers outpatient services. Errors often happen when services are mistakenly billed under both, or when Part B billing isn’t triggered after a Part A stay ends. Having clear internal workflows for transitioning between the two is essential to staying compliant.

Skilled nursing facility billing becomes even more complex when private insurers or Medicaid are involved, since each payer brings its own rules around authorizations, documentation, and timelines.

Rules on how to bill Medicare evolve often. The best SNFs are the ones that treat Medicare billing as a living system, not a set-it-and-forget-it task.

Navigating private insurance and Medicaid billing

Medicare gets most of the attention, but private insurance and Medicaid bring their own billing headaches — especially when it comes to dual-eligible patients and coordination of benefits.

These payers often have their own documentation rules, authorization timelines, and billing formats. If your team isn’t tracking those differences, delays and denials start to pile up.

Watch out for these points with Medicaid billing:

• Medicaid billing varies by state — and so do the rules: Unlike Medicare, which follows national standards, Medicaid is run at the state level. That means everything from reimbursement rates to covered services and required forms can differ widely.
  
  If your facility operates in multiple states, you'll need workflows that adapt to local Medicaid policies without reinventing the wheel every time.
  
  

• Private insurers require extra legwork: Most commercial plans require pre-authorizations, have narrower coverage criteria, and come with portal-based claim systems that don’t always play nicely with SNF software.
  
  Billing teams must stay organized and persistent — following up on unpaid claims, navigating insurer portals, and documenting every interaction.
  
  

• Dual-eligible patients add layers of complexity: When someone qualifies for both Medicare and Medicaid, knowing who pays for what (and when) is critical. Medicare is typically the primary payer, with Medicaid covering some secondary costs.
  
  But even one misstep in coordination can lead to denied claims or delayed payment. Facilities need strong systems in place to track benefits, coverage periods, and claims sequences.
  
  

• Coordination of benefits requires constant attention: It’s not enough to just list the right primary and secondary payer. You also need to ensure the timing of claims submission matches what payers expect. Submitting a Medicaid claim before Medicare processes their portion, for example, will usually result in an automatic denial.

Whether you’re billing Medicare, Medicaid, or private insurance, the codes you use tell the story of the care you delivered, including durable medical equipment (reported through DME billing). But when those codes are wrong, incomplete, or outdated, that story falls apart — and so does your reimbursement.

Skilled nursing facility coding guidelines and billing codes

Skilled nursing facility coding guidelines help ensure that diagnoses, procedures, and therapy services are reported accurately to support medical necessity and payment integrity.

Whether you’re billing Medicare, Medicaid, or private insurance, the codes you use tell the story of the care you delivered. But when those codes are wrong, incomplete, or outdated, that story falls apart — and so does your reimbursement.

A quick overview of SNF billing codes

Every skilled nursing facility relies on two primary code sets to bill:

• ICD-10 codes identify the resident’s diagnoses and medical conditions.

• CPT/HCPCS codes describe the services and procedures delivered.

But SNF coding comes with extra layers. For example, under PDPM, ICD-10 codes determine case-mix group classifications — which directly influence how much you get paid.

That means choosing the right primary diagnosis isn’t just a medical decision. It’s a financial one too.

Which codes matter most?

Here are some of the commonly used codes in skilled nursing billing:

• ICD-10: Codes like I63.9 (stroke) or F03.90 (unspecified dementia) may drive your PDPM classification.
  
  

• CPT/HCPCS: Codes like 97110 (therapeutic exercises) or G0299 (RN services) are often billed under Medicare Part B.
  
  

• Revenue codes: Used on UB-04 claims to identify room and board, therapy services, or ancillary charges.

Staying current matters — new ICD-10 codes are released each October, and CPT updates come every January. If your coders or software tools aren’t keeping up, you could be missing out on reimbursement or opening the door to audits.

Avoiding common coding pitfalls

It’s not always the big errors that cause problems. It’s often the small ones that quietly impact your bottom line. Here are some examples:

• Using non-specific diagnosis codes that don’t support medical necessity

• Forgetting required modifiers

• Failing to update codes after a resident’s condition changes

When in doubt, code to the highest level of specificity — and make sure clinical documentation backs it up.

Compliance and documentation best practices

If your documentation doesn’t support what you billed, it’s only a matter of time before you hear from an auditor. Accurate documentation is what protects your facility from takebacks, denials, and penalties.

What should documentation include?

At a minimum, your records should clearly support:

• The resident’s medical necessity for SNF-level care

• All services rendered (with dates, times, and provider signatures)

• Diagnoses that match the codes billed

• Progress notes that show ongoing need for skilled services

Building a culture of compliance

It’s not just about forms and checklists, it’s about habits. Facilities that stay audit-ready tend to:

• Train staff on documentation standards during onboarding.

• Audit charts regularly — not just after a denial.

• Create open lines of communication between nursing, therapy, and billing teams.

Why coding accuracy is non-negotiable

ICD-10 and CPT codes aren’t interchangeable — and misusing them can lead to incorrect reimbursements, billing delays, or worse, allegations of fraud.

Plus, with payment models like PDPM tying diagnosis codes directly to reimbursement, your financial outcomes depend on the precision of your clinical coding. The more aligned your documentation, coding, and billing are, the smoother the path to clean claims and faster payments.

Strategies to prevent billing denials and optimize revenue

Many SNFs struggle with denials simply because SNF billing workflows aren’t standardized across teams, leading to inconsistent submissions and missed details.

Reworking denials eats into time your billing team doesn’t have. The key is to avoid getting stuck in a reactive loop. When a claim is denied, start by looking at the reason code, but don’t stop there. Dig into the underlying issue.

Ask:

• Was the documentation complete and signed?

• Was the correct payer sequence followed?

• Were the codes updated to reflect the resident’s current condition?

• Was the service actually authorized or covered under the plan?

• Did the claim meet the payer’s submission timeline?

Once the issue is identified, build that lesson into your process. The goal isn’t just to fix this one claim. It’s to prevent five more from getting denied the same way. Track patterns. If you're seeing repeat denials from one payer or for a specific service, it's time to tighten up those workflows.

Best practices for cleaner claims

Reducing denials starts long before submission. These steps make a difference:

• Double-check eligibility and benefits before billing. Coverage can change between referral and admission — especially with Medicaid.
  
  

• Match codes precisely with documentation and clinical notes. If something isn’t documented, assume it won’t be reimbursed.
  
  

• Keep billing and clinical teams aligned on discharge plans, therapy schedules, orders, and status changes. A 5-minute huddle can prevent a 5-day delay.
  
  

• Create a checklist for high-risk items. Things like therapy minutes, physician certifications, or lab documentation often trip up claims. Use the checklist before submission — not after a denial.

Even small tweaks to your pre-bill review process can have a big impact on your clean claim rate.

Revenue cycle tips that actually help

SNF revenue cycles are complex, but that doesn’t mean they have to be chaotic. A few process-driven habits can make a noticeable difference:

• Watch your AR aging reports weekly, not monthly. Aging claims are harder to collect — and often less likely to be paid in full.
  
  

• Set a daily clean claim rate goal — and track it. Something as simple as aiming for a 95% clean claim rate can keep the team focused and accountable.
  
  

• Identify your most common denial reasons and do a monthly mini-review with the team. No finger-pointing — just a chance to course correct before the next batch goes out.
  
  

• Designate someone to own follow-ups with specific payers. Let staff develop relationships with payer reps, learn their quirks, and become go-to experts internally.
  
  

• Monitor your time-to-bill after discharge. The longer it takes to submit, the more likely something will go wrong. Set internal benchmarks to get bills out the door quickly.

Revenue protection doesn’t require fancy tools or sweeping changes, it just takes consistency, communication, and a clear view of where delays and denials are happening.

Streamlining SNF billing with technology

Even the best billing team can only work with the systems they’ve got. If those systems involve printing referral packets, toggling between portals, or manually flagging reimbursement risks, it’s no surprise that errors and delays slip through.

That’s where smarter tools (especially ones built specifically for SNFs) can make all the difference.

Why automation matters more than ever

At high-volume facilities, small inefficiencies add up fast. Automated billing tools can:

• Flag missing documentation before claims go out

• Submit and track claims in real time

• Reduce duplicate data entry by syncing with your EHR

• Help prioritize follow-ups based on payer response times

Frequently asked questions 

What is the difference between skilled nursing facility billing and hospital billing?

SNFs bill under Medicare Part A or Part B, depending on the type of care provided, and often must follow consolidated billing guidelines that bundle multiple services into a single claim. Hospitals, on the other hand, typically bill under Medicare Part A using the inpatient prospective payment system.

SNFs also deal more frequently with long-term care insurers, Medicaid variations by state, and complex care transitions — so the billing process requires more coordination across teams and tighter alignment with documentation.

What happens if an SNF claim is denied?

When an SNF claim is denied, the billing team must review the explanation of benefits (EOB) or denial code to understand the reason. From there, they may need to gather additional documentation, correct coding errors, or verify payer information before resubmitting or appealing the claim.

The key is to act quickly — most payers have strict appeal windows, and the longer the delay, the harder it is to collect.

How can SNFs reduce claim denials?

The most effective way to reduce denials is to prevent them in the first place. That starts with verifying eligibility, confirming prior authorizations, using the correct payer sequence, and ensuring documentation fully supports the services billed.

Tight communication between clinical and billing teams is essential, especially when codes are driven by assessments or therapy plans. SNFs should also track common denial reasons and use that data to improve internal workflows.

What documentation is required for accurate SNF billing?

Accurate SNF billing depends on documentation that clearly supports medical necessity and matches the codes submitted. This includes physician orders, therapy notes, daily skilled nursing progress notes, medication records, and signed certifications or recertifications.

For Medicare claims, the Minimum Data Set (MDS) assessment must also align with the resident’s diagnoses and care plan. Any gaps or inconsistencies in documentation can delay payment — or result in full denials.

Help reduce admin tasks like billing with ExaCare

ExaCare plays a key role in supporting billing systems and helping SNFs bill more accurately and confidently. 

Instead of waiting for billing problems to show up on the back end, ExaCare helps facilities surface them on day one. That shift — from reactive to proactive — is what gives teams more control over revenue.

Once you've cleaned up your SNF billing guidelines and processes, reduced denials, and tightened documentation, the next challenge is keeping it that way — especially with limited staff and constant pressure to move quickly. That's where smart systems can make a real impact.

If your team is still bouncing between portals, manually reviewing hospital packets, or tracking referrals in spreadsheets, you're spending time on admin tasks that could be automated and opening the door to missed information or delays.

ExaCare helps simplify the front end of your workflow so the back end runs smoother. By giving your team faster access to clinical and financial insights during the admissions process, ExaCare helps you get ahead of the billing curve before the resident even arrives.

That means fewer surprises later, better reimbursement visibility from day one, and less time chasing paperwork.

Here’s what we offer:

• AI-powered referral screener that reviews hospital packets in minutes, enabling quick and accurate admissions decisions
  
  

• Centralized referral management that brings all your sources into one platform
  
  

• Built-in analytics to help you track performance and optimize your referral relationships
  
  

• Automated insurance verification, expensive med alerts, and reimbursement analyses to guard your bottom line.
  
  

• A unified communication hub to streamline decision-making with colleagues.

Ready to see how ExaCare can help your facility win more referrals? Talk with our team to learn more.

Schedule a demo.