Reducing SNF Claim Denials: Common Errors and Preventive Auditing

Skilled Nursing Facilities (SNFs) face a growing challenge from claim denials that not only drain revenue but also disrupt operations. According to the 2024 Medicare Fee-for-Service (FFS) data, the improper payment rate for SNF services reached 17.2%, with projected improper payments of approximately $5.9 billion. In particular, the CMS Supplemental Improper Payment Data for 2023 reports that SNF inpatient Medicare Part A claims had an error rate of about 14.9%, compared to 7.4% for all providers.

Most of these denials arise from documentation problems rather than medical necessity. For example, in 2023 insufficient documentation accounted for nearly 79.1% of improper payments in SNF Part A claims. Likewise, other common triggers include a lack of response to medical record requests and mis-coding related to HIPPS or MDS documentation.

As these errors are both frequent and often preventable, SNFs must focus on auditing, reviewing, and strengthening their billing processes. This blog will explore the common errors that cause denials in SNF claims, and lay out the preventive auditing framework that facilities can use to reduce denials, protect revenue, and comply with regulatory expectations.

Common Errors that Trigger SNF Claim Denials

SNFs often experience claim denials due to multiple points of failure in documentation, coding, and submission processes. The following are the most frequent and costly SNF-specific claim errors:

1. Pre-Submission and Documentation Errors

1.1 Missing or Late Physician Certification

A common cause of SNF claim denials is the absence or late submission of physician certifications. Medicare mandates that physicians certify a patient's need for skilled care and complete timely recertifications throughout the stay. When these certifications are missing, incomplete or dated after the billing period, the claim is often rejected for non-compliance with regulatory requirements.

1.2 Incomplete or Missing Physician Orders

Claims may be denied when a valid physician order does not back services such as therapy, wound care, or dietary modifications. Missing or undated orders create uncertainty about medical necessity that result the payers to question the legitimacy of the billed services. This issue often arises when documentation fails to reflect the physician's direction accurately.

1.3 MDS and HIPPS Coding Mismatch

The Minimum Data Set (MDS) determines the HIPPS code used for billing the Patient-Driven Payment Model (PDPM). When data entered into the MDS such as clinical characteristics, therapy minutes, or comorbidities do not match the information recorded in the patient's chart, the claim may be flagged for inconsistency. These mismatches create discrepancies between reported and actual care levels, resulting in payment denials.

1.4 Missing 5-Day or Discharge Assessments

Failure to complete or submit the required 5-day or discharge MDS assessments often leads to immediate claim rejections. In fact, every Medicare stay requires the timely submission of these assessments, and any delay or missing acceptance confirmation from the state database invalidates the associated claim. This error commonly occurs when assessment timelines are not correctly tracked.

2. Coding and Billing Errors

2.1 Incorrect Diagnosis or Procedure Codes

Inaccurate ICD-10 or procedure coding remains one of the most frequent billing issues in SNFs. When the primary diagnosis does not align with the patient’s documented condition or when secondary codes are omitted, claims are flagged for improper coding. Such inconsistencies compromise the clinical accuracy of the claim and often prompt payer denials or further review.

2.2 HIPPS and Case-Mix Coding Errors

Errors in assigning HIPPS or case-mix codes can cause underpayment, overpayment or complete claim denial. When coding selections do not match the clinical data or MDS entries, payers identify the submission as inaccurate. These errors frequently arise from misinterpretation of assessment data or incorrect mapping of clinical information to the corresponding payment group.

2.3 Duplicate or Overlapping Claims

Submitting multiple claims for the same patient and dates of service is a recurring administrative error in SNF billing. Duplicate claims typically occur when staff resubmit corrected claims without confirming the status of prior submissions. Overlapping billing periods also confuse payers and may result in the entire batch being rejected.

2.4 Span Date and Timely Filing Errors

Improper span dates on claims can lead to automatic rejections, especially when service dates overlap incorrectly or fall outside the approved billing period. Similarly claims submitted after the payer's deadline for timely filing are often denied outright. These issues indicate weak internal tracking of billing cycles and deadlines.

3. Post-Submission and Appeals Errors

3.1 Delayed or Incomplete Appeal Submissions

Denials that can be overturned sometimes remain unresolved as appeals are submitted late or without complete documentation. In fact, missing evidence such as therapy notes or certification forms, weakens the appeal and reduces the chance of claim recovery. Delayed submission further limits the facility's ability to contest the payer's decision.

3.2 Lack of Denial Root-Cause Analysis

When facilities repeatedly face the same type of denial, the underlying cause often goes unexamined. Without identifying the exact reason such as recurring documentation gaps or miscommunication between departments, these errors continue to impact claim quality. This oversight prevents long-term improvement in billing performance.

Preventive Auditing Framework for SNFs

A preventive auditing framework plays a vital role in helping SNFs identify and correct billing issues before they transform into costly claim denials. Such a systematic process can be-

1. Pre-Claim Scrub and Review

The first step focuses on conducting a detailed review of claims before submission. Facilities use claim-scrubbing technology combined with manual checks to identify missing fields, incorrect data, or mismatched billing codes. These reviews are usually performed daily or in batches, ensuring that claims are accurate and fully supported by documentation. As a result, SNFs can prevent rejections and improve first-pass claim acceptance rates.

2. Sample Internal Audits

Regular internal audits involve reviewing a random sample of claims to evaluate the quality and accuracy of documentation. In fact a set number of claims are selected each week or month for detailed examination. During this process, auditors compare the information on the claim form with the patient's chart to confirm that billed services are fully supported and compliant with payer requirements.

3. Focused Process Audits

Focused process audits are designed to evaluate specific billing areas that are prone to errors. These may include new patient admissions, MDS and therapy documentation, or initial claim submissions. In fact, these audits help ensure that front-end verification, authorization and coding steps are correctly executed across departments.

4. Denial Trend and Root Cause Audits

This stage emphasizes analyzing denial data to identify common trends and recurring problems. Facilities can determine the underlying issues causing claim rejections by reviewing denials by payer, physician or reason. This information becomes the foundation for refining internal processes and providing targeted training to staff members.

5. Ad-Hoc Audits

Ad-hoc audits are carried out whenever new payer rules, billing codes, or service lines are introduced. These on-demand reviews allow facilities to quickly adapt to changing regulations and identify any early compliance risks. Also, SNFs can prevent denials related to new or modified billing criteria through timely intervention.

6. Audit of High-Risk Areas

Certain billing areas such as therapy services, comorbidity coding, and physician certifications are considered high-risk due to their complexity. In fact monthly or quarterly audits of these claims provide a deeper assessment of documentation and coding accuracy. This focused approach ensures that high-value claims are billed appropriately and supported by strong clinical evidence.

7. Post-Audit Feedback and Continuous Improvement

The final step centers on documenting audit findings and implementing corrective actions. Every audit needs to generate a summary of identified issues, solutions and follow-up timelines. As a result, SNFs can transform audit results into meaningful process enhancements by tracking improvements and maintaining transparency that drives long-term accuracy, compliance, and financial stability.

Outsourcing to 24/7 Medical Billing Services

Undoubtedly, SNFs need a partner that understands both financial strategy and clinical depth. 24/7 Medical Billing Services stands out as a one-stop solution that integrates technology, expertise, and personalized support to strengthen every stage of the billing process.

Unlike conventional outsourcing firms, 24/7 Medical Billing Services combines human insight with advanced automation to simplify complex billing workflows. Their dedicated teams collaborate directly with SNF administrators, clinicians, and finance staff to ensure that documentation, coding, and billing flow seamlessly from care delivery to reimbursement. This hands-on approach bridges the gap between clinical operations and revenue cycle management that results in fewer denials and faster payments.

FAQs

Q1. How often should SNFs perform internal audits?

Most facilities conduct weekly pre-billing reviews and monthly random audits.

Q2. How do payer policy updates affect claim approvals?

Even minor rule changes can lead to denials if billing systems or staff are not updated.

Q3. How does proactive auditing support compliance?

It ensures SNFs meet Medicare, Medicaid, and private payer documentation standards consistently.