Medicare Part B Billing Mistakes That Cost SNFs Revenue
Eric HansenFounder, Burst BillingJuly 16, 202610 min readOne number explains the whole problem.
24.1%.
That's the DMEPOS improper payment rate in the 2024 Medicare fee-for-service supplemental data. About $2.3 billion. Roughly 3 times the 7.66% Medicare fee-for-service average.
DMEPOS is the billing category your medical supply claims fall into. Surgical dressings. Urological supplies. Ostomy supplies.
CMS's own data points to what's driving it: documentation. Records that don't prove an item was medically necessary or that it was actually provided. The FY2024 improper payments fact sheet confirms documentation as the leading cause across Medicare fee-for-service. Most of the 24.1% is administrative failure, not fraud.
That failure, in almost every case, traces back to one of six billing habits. Each looks reasonable in isolation. Run them for twelve months and they compound.
Scheduling Part B supply review only when something forces it
Most Part B supply review happens because something required it. A cost question from the CFO. A vendor switching. A discrepancy that surfaced in a report.
Reactive review catches individual events. It never surfaces the pattern behind those events, because patterns only appear when you look at a full period of activity.
A fixed monthly review queue, covering documentation status, payer status, exclusion reasons, and claim outcomes, catches gaps that a triggered, one-issue review walks past. The event that forces the reactive review is usually downstream of a pattern that's been running for months.
Confirming resident payer status at the back end of the workflow
Part B billing eligibility turns on the resident's payer status during the date of service. A resident in a covered Part A stay is subject to consolidated billing, which restricts separate Part B billing for most supplies.
When payer status is confirmed late in the workflow, the team reviews items that should have been excluded from the first step. And sometimes misses items that were eligible, because the attention shifts to correction instead of decision.
Payer status confirmation at the front end routes the workflow correctly from the start. One check. Most wrong turns don't happen.
Letting a supplier's billing stand in for yours
Outside suppliers deliver supplies reliably. The billing picture is a separate question.
When a supplier bills Part B under their own NPI for your residents' supplies, the facility isn't in the claim. You don't see what was billed, what documentation it rested on, what NPI was used, or whether the amount matched what your clinical records could have supported.
The compliance exposure stays with your facility. The care relationship is yours. The documentation burden is yours. Keep the supplier relationship. Build visibility into the billing behind it.
Building claims from invoice data
An invoice documents delivery. It doesn't establish medical necessity, identify the ordering physician, confirm the resident's payer status, or satisfy coverage documentation requirements.
A defensible Part B supply claim needs the clinical reason, the signed physician order, the resident's eligibility on the date of service, and any coverage documentation the applicable LCD requires. An invoice is the starting point. The clinical record is what makes the claim stand.
If the full documentation picture isn't in place before submission, hold the claim. A conservative hold is recoverable. A post-payment issue costs more and takes longer to resolve.
Billing by supply category instead of specific item
"Wound supplies." "Urological supplies." "Ostomy supplies." Useful for shelf management. They don't function as billing identifiers.
HCPCS Level II codes identify the specific products that CPT doesn't cover. Coverage rules, documentation requirements, and quantity limits operate at the item level. A generic category label gives a coder nothing specific to work with and a payer no specific basis for approval.
Map each item to its HCPCS code and a specific review path before it reaches billing. Flag uncertain items before submission.
Tracking submissions and ignoring exclusions
A submitted-claims log shows what went through. It doesn't show what should have gone through but didn't, or why.
An exclusion log is where the control lives. It demonstrates that the billing process only advances claims the record can support, which is useful documentation in a TPE, RAC, or UPIC audit. It also works as a diagnostic: the same supply category or the same vendor appearing repeatedly as an exclusion points to a documentation gap, a vendor reporting issue, or a training need you can't identify from the submitted-claims list.
Keep the list of what you didn't bill. It's evidence of a controlled process. And it's a map of what to fix.
Three controls that catch most of this
| Fix this first | What it catches | Why it's first |
|---|---|---|
| Payer status verification at workflow start | Consolidated billing errors, wasted review time on ineligible items, eligible items missed | One decision routes the entire workflow correctly from the start |
| Documentation completeness check | Unsupported claims, audit exposure, denials for missing or insufficient records | Documentation drives most of the 24.1% DMEPOS improper payment rate |
| Monthly exception report | Repeating patterns, vendor gaps, training needs, missed reimbursement | Leadership cannot fix a trend it has not seen |
None of these require a large internal build. A fixed review schedule, a consistent documentation checklist, and an exception log built in whatever system the team already uses. Most facilities have what they need to start.
Habits compound. A small documentation gap, repeated across hundreds of residents over twelve months, adds up to the number CMS publishes. If one of the six above matches your current workflow, that's where to start. A schedule, a check, and an exception log.
"Most of the 24.1% isn't fraud. It's habits nobody stopped to fix."
Where this fits with the rest of the series
- The six-check gate before you submit: Medicare Part B supply billing checklist for SNFs.
- Why facilities miss the revenue in the first place: Why SNFs miss Medicare Part B supply reimbursement.
- The workflow fix without adding headcount: Improve SNF Medicare reimbursement accuracy without more staff.
- How PointClickCare data surfaces the gaps: What your PointClickCare data is telling you about Part B billing gaps.
Compliance note
This article is for general educational purposes only. It doesn't replace facility-specific billing, compliance, legal, or payer guidance. SNFs should verify coverage, coding, documentation, and submission decisions against applicable CMS guidance, payer rules, and their own compliance policies.
References
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Written by
Eric Hansen
Founder, Burst Billing
Eric Hansen is the founder of Burst Billing. He has spent over a decade helping skilled nursing facilities recover missed Medicare Part B supply reimbursement through cleaner documentation, tighter vendor workflows, and risk-free billing reviews.
More from Eric →Frequently asked questions
- Six habits drive most of the errors: reviewing supply billing only when something forces it, confirming resident payer status at the back end of the workflow instead of the front, accepting supplier billing without visibility into the claims, building claims from invoice data instead of clinical documentation, billing under generic supply category labels instead of specific HCPCS codes, and tracking submitted claims while leaving exclusions untracked. Each is a documentation or visibility gap rather than a single large error.
- CMS 2024 Medicare fee-for-service supplemental data shows DMEPOS improper payments at 24.1%, about $2.3 billion and roughly 3 times the 7.66% Medicare FFS average. Documentation failures drive most of it: records that can't establish medical necessity or confirm delivery. DMEPOS has a higher rate partly because supply documentation is distributed across vendors, clinical staff, and billing teams, creating more points where a gap can form before anyone catches it.
- Payer status verification at the workflow start. It determines whether a claim is appropriate before any review time is spent. Getting it right at the front prevents consolidated billing errors and keeps the rest of the workflow on eligible claims. Documentation completeness and a monthly exception report are the next two controls that catch the most failures.
- Yes. An exclusion log demonstrates that the process only advances claims the record can support, which matters in an audit. It also works as a diagnostic: if the same supply category keeps appearing as an exclusion, that pattern points to a documentation gap, a vendor reporting issue, or a training need you can't find by reviewing submitted claims alone.
- An invoice establishes delivery. A defensible Part B claim also needs the clinical reason for the item, the signed physician order, the resident's payer status on the date of service, and any coverage documentation the applicable LCD requires. Invoice data alone leaves gaps that lead to denials or post-payment review.
- When a supplier bills under their own NPI for your residents' supplies, the facility has no visibility into the claims. You don't see what was billed, what documentation was used, or whether the reimbursement matched what your records could support. The compliance exposure stays with the facility because the care relationship and documentation belong to you.
- On a fixed monthly schedule. Reactive review, triggered by a problem or question, catches individual events. A monthly pass through a consistent review queue, covering documentation status, payer status, exclusion reasons, and claim outcomes for the full period, surfaces patterns. Patterns are where the revenue gaps and compliance risks accumulate.
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