Pricing a SNF claim: the PDPM per diem, interim bills and consolidated billing

What a 21x claim is paid on

A skilled nursing facility bills its own stays on an institutional claim (837I or UB-04). When the bill type is 21x, the stay is Medicare Part A, and Medicare pays it as a per diem under the Patient Driven Payment Model (PDPM): a daily rate set by the resident’s assessment, not by the services on the claim.

The rate comes from the revenue code 0022 lines. Each carries a HIPPS code in its HCPCS field and that code’s covered days in its units. The HIPPS code is five characters, which makes it easy to mistake for a procedure code:

• Character 1: the physical and occupational therapy group (A to P).
• Character 2: the speech-language pathology group (A to L).
• Character 3: the nursing group (A to Y, 25 groups).
• Character 4: the non-therapy ancillary group (A to F).
• Character 5: the assessment indicator, which does not change the payment.

A stay can carry more than one 0022 line: when an interim payment assessment changes the groups partway through, the later days are billed on a second line with the new code. The days continue the same count; they do not start over.

The per diem, component by component

The daily rate is the sum of six components. Five are case-mix adjusted: the component rate times the case-mix index (CMI) of the group the HIPPS code names. The sixth, the non-case-mix component, is the same for everyone. The total is then wage-adjusted on the labor share, 72.0% in FY2027 and 71.9% in FY2026.

For HIPPS code NHNC1 at an urban facility, the case-mix adjusted rates are:

The case-mix indexes and the day schedule below are the same in both years; only the component rates and the labor share changed on October 1.

The day of the stay

Two components change with the day of the stay. Physical and occupational therapy pay in full through day 20 and then step down 2% every seven days. Non-therapy ancillaries, mostly drugs, pay three times the rate for days 1 to 3 and the normal rate after that.

So the same HIPPS code pays less on day 30 than on day 3, and an interim bill cannot be priced from its own dates alone. A first interim bill (212) starts at the admission; a continuing or last bill (213, 214) starts wherever the previous bill ended, which only the admission date tells you. Priced as if its first day were day 1, a continuing bill collects three days of tripled ancillaries it was never owed.

A worked claim

A resident of Sharpville Residence and Rehabilitation Center in Houston (CCN 455333), admitted September 20, 2026 and still there on October 3, assessed at HIPPS NHNC1. The stay crosses October 1, and Medicare requires separate bills for each federal fiscal year when an admission spans the annual update on October 1 (Medicare Claims Processing Manual, Pub. 100-04, Chapter 6, §30). So it is billed twice: a first interim bill (212) for September 20 to 30 with one 0022 line, NHNC1 for 11 days, and a continuing bill (213) for October 1 to 3 with NHNC1 for 3 days. Their other lines, taken together:

Each bill is priced on its own fiscal year’s rates and the facility’s wage index for that year:

Last comes the facility’s value-based purchasing multiplier, which Medicare sets for each SNF every fiscal year and keeps on its provider record. Sharpville’s is 0.9849 for FY2026 and 0.9969 for FY2027, so the 212 pays $9,162.27, the 213 $2,318.49, and the stay $11,480.76. The pricer applies each facility’s multipliers from its record; a multiplier you enter overrides them.

$13,420 of charges on six lines, and every dollar of the payment comes from one: the 0022 line.

Consolidated billing

During a Part A stay the facility is responsible for nearly everything its resident receives, and it bills it all on its own claim. That is consolidated billing. The therapy, drugs, supplies, labs and imaging on a 21x claim are there to report what was provided and what it cost; the per diem already pays for them. Repricing those lines on the fee schedules pays for the same care twice.

The main exception is the physician. A physician’s or practitioner’s professional services are excluded from consolidated billing and billed separately, on their own claim.

When there is no HIPPS code

A 21x claim with no usable HIPPS code has no Medicare-equivalent per diem: a missing code, or a code that is not on the PDPM list. The default code ZZZZZ is different. It is billed for the days an assessment was late, and Medicare pays those days the PDPM default rate: the lowest case-mix group in each component plus the non-case-mix rate, still on the variable per diem schedule. For days with no usable code, a payer has to choose what to do, and the choice belongs in the contract or the payment policy:

• flag the claim for review and pay nothing until a valid code arrives;
• pay a percent of billed charges for those days; or
• price the days at a HIPPS code the plan supplies, such as one from the MDS.

Part B and outpatient SNF claims

Bill types 22x (a resident without Part A coverage for the stay, such as after the 100 days are used) and 23x (outpatient) are not paid a per diem. They are priced line by line on the fee schedules: therapy on the physician fee schedule at the non-facility rate, with the multiple-procedure reduction on later therapy units the same day; labs on the clinical lab fee schedule; drugs at the average sales price payment limit. The sample 221 claim, with therapy on three dates, a complete blood count and an injection, is allowed $455.18.

Physician claims for residents

Every line of a facility’s claim carries a revenue code. Lines with a CPT or HCPCS code and no revenue code are almost certainly a physician’s or practitioner’s professional claim (837P). They are priced on the physician fee schedule, and the place of service decides which rate: the facility rate at POS 31, during a Part A stay, because the facility’s per diem already covers the staff, space and supplies; the non-facility rate at POS 32 otherwise.

Checks for SNF claims

• Read the bill type first. 21x is a per diem; 22x and 23x are fee schedule lines.
• Price only the 0022 lines on a 21x claim, and treat everything else as information.
• Require the admission date on 213 and 214 claims.
• Split a stay that crosses October 1 by day: each day takes its own year’s rates and wage index.
• Check that the 0022 units add up to the covered days in the statement period.
• Decide, in writing, what happens to a claim with no usable HIPPS code.
• Expect physician claims for the same resident at POS 31 or 32, and do not deny them as duplicates of the facility’s claim.