Fact Sheet On Dialysis Coverage in SNF's
Section 1861(h)of the Social Security Act (the Act) describes coverage of "extended care" (i.e., Part A SNF) services. In order for a specific type of service to be covered under this benefit, It must fall within one of the seven individual service categories set out in this section of the Act. Dialysis can potentially fit into this benefit under either of two categories in section 1861(h).
The first category is at section 1861(h)(6), which provides for coverage under the SNF benefit of transfer agreement hospital services. Section 1819(a)(2) of the Act specifies that, in order to participate in Medicare as an SNF, a nursing home must have a transfer agreement with a hospital to facilitate the ready exchange of patients and information between the two institutions. Under section 1861(h)(6), services such as dialysis can be covered under the SNF benefit when furnished to the SNF's residents under arrangements between the SNF and its transfer agreement hospital. However, in order to be covered under this provision, the dialysis must be finished directly by the SNF's transfer agreement hospital itself, rather than under arrangements between the hospital and some third party.
The second category is at section 1861(h)(7). In addition to the specific service categories set out in paragraphs (1) through (6) of section 1861 (h), paragraph (7) provides for coverage of other services that are generally provided by SNFs. Under a longstanding administrative policy that is reflected in section 3133.9.A. of the Medicare Intermediary Manual, Part 3, most of the Part B (medical and other health services) described in section 1861(s)of the Act (including dialysis, at section 1861(5)(2)(F)) are considered to be generally provided by SNFs for purposes of this provision.
However, prior to the Balanced Budget Act of 1997 (BBA, P.L. 105-33), the statutory language regarding services that are "generally provided by" SNFs required not only for a particular service to be "generally provided" (i.e., for the provision of that type of service to be the prevailing practice among SNFs nationwide), but also for the service to be provided directly "by" the SNF itself. However, effective for services furnished to SNF residents on or after July 1, 1998, section 4432(b)(5)(D) of the BBA expanded section 1861(h)(7) of the Act to include coverage of services that are generally provided by SNFs or by other under arrangements with them made by the SNF.
As a result, the extended care benefit will now cover the full range of services that SNFs generally provide, either directly or under arrangements with outside sources. For example, dialysis services (which have until now been specifically coverable as extended care services, only when directly provided by either the SNF itself or its transfer agreement hospital) will also become coverable when provided under an arrangement between the SNF and a free-standing dialysis facility.
Finally, it should be noted dialysis is one of the service categories the BBA specifically excludes from the SNF Consolidated Billing provision (which makes the SNF itself responsible for billing Medicare for virtually all of the services that its residents receive). This means that, while the BBA change in section 186 1(h)(7) of the Act makes dialysis coverable as a Part A SNF service if an SNF elects to provide it either directly or under arrangements with a qualified outside source, the SNF also has the option to unbundle the dialysis altogether. If the SNF elects this latter option, dialysis services that meet the Part B dialysis benefit's coverage requirements could be furnished and billed directly by an outside dialysis supplier, without having to make an "arrangement" with the SNF in which the SNF does the Medicare billing.
There are only two situations under which dialysis services would be considered a Part B service and billable by an ESRD facility or supplier when provided to a SNF patient. The first is for institutional dialysis services received at a Medicare certified ESRD facility. Institutional dialysis services must be provided by entities that meet the ESRD conditions of coverage that are specified at 42 Code of Federal Regulations, Part 405, Subpart U. These regulations limit outpatient maintenance dialysis services to those services provided "on the premises" of the facility.
Thus, it is not possible for Part B institutional dialysis services to be provided at the site of a nursing facility or SNF that does not itself meet the ESRD conditions of coverage.
The second situation involves Part B coverage of home dialysis services for patients in nursing facilities or SNFs as such facilities may qualify as the patient's home for purposes of this benefit. In order for Medicare payment of home dialysis to be made, the patient must elect to become a home dialysis patient and have completed a training program provided by an approved ESRD facility. Once a patient has completed the training, they must elect either Method I, where a ESRD approved facility furnishes the dialysis equipment and supplies, or Method II, where the patient elects a single supplier other than the ESRD facility to furnish all of their dialysis equipment and supplies other than laboratory services and support services which are provided by a certified ESRDD facility. Each home patient must have his own supplies and equipment. These cannot be shared with other SNF patients. Also, home dialysis is intended to be self-dialysis performed by the patient and/or his family. Therefore, Medicare does not cover the services or staff to assist with the home dialysis services.
