SNF Consolidated Billing Exclusions List 2026: Medicare Rules Providers Must Know

Skilled Nursing Facilities are a major part of Medicare’s post-acute care scenario, with more than 1.5 million Medicare-covered SNF stays generating roughly $25 billion in Medicare payments in 2023. Most of these stays occur in freestanding facilities, which accounted for nearly 98% of SNF utilization and spending that year.

This level of activity highlights the importance of clear payment policies within the SNF setting, especially as CMS updates Medicare rules and payment structures each year.

This blog covers SNF Consolidated Billing exclusions for 2026 and essential Medicare rules.

SNF Consolidated Billing Exclusions List 2026

The SNF Consolidated Billing Exclusions List for 2026 defines services that are intentionally carved out of the SNF Prospective Payment System during a covered Medicare Part A stay. These exclusions reflect CMS policy decisions that certain services are either too specialized, too resource-intensive, or not routinely furnished by SNFs.

• Physician and Practitioner Professional Services

Physician and practitioner professional services are categorically excluded from SNF Consolidated Billing. These services are viewed by CMS as professional medical decision-making activities rather than institutional care components. The exclusion applies broadly across evaluation, management, and consultative services provided by physicians and recognized non-physician practitioners. As these services are independent of the SNF’s operational costs, they are not incorporated into the PPS rate and remain outside the consolidated billing framework in all covered Part A stays.

• Selected Chemotherapy and Radioisotope Services

The exclusion list includes selected chemotherapy drugs, administration services, and radioisotopes that meet CMS’s “high-cost, low-frequency” criteria. These services are typically associated with oncology care that requires specialized handling, monitoring, or delivery settings. CMS limits the exclusion strictly to identified HCPCS codes rather than entire service categories. In fact, each annual update reflects newly approved drugs, changes in utilization, and cost analyses, ensuring the list remains clinically and financially current for Medicare payment purposes.

• Customized Prosthetic Devices

Customized prosthetic devices are excluded when they are individually fabricated for a specific beneficiary rather than mass-produced or routinely stocked. CMS recognizes that these devices involve specialized design, fitting, and materials that fall outside SNF standard supply expectations. The exclusion applies only to prosthetics that meet customization criteria, distinguishing them from standard durable medical equipment. This policy separates highly individualized patient equipment from services intended to be covered under the SNF PPS rate.

• Outpatient Hospital and Intensive Services

Certain outpatient hospital services are excluded because they require diagnostic technology, procedural capacity, or clinical infrastructure unavailable within SNF settings. These services include emergency department care, advanced imaging, interventional procedures, and radiation-based treatments. CMS classifies these services as hospital-level care rather than post-acute facility care. Their exclusion preserves appropriate Medicare payment alignment by recognizing the distinct cost structures and clinical environments in which these services are delivered.

• Dialysis and ESRD-Related Services

Dialysis services associated with End-Stage Renal Disease are excluded from SNF Consolidated Billing due to their separate Medicare payment methodology. ESRD care is governed by dedicated reimbursement rules that operate independently of SNF PPS payments. This exclusion also extends to dialysis-related ambulance transportation. CMS maintains this separation to ensure consistent access to life-sustaining renal services while preventing overlap between SNF bundled payments and ESRD-specific Medicare coverage structures.

• Remote Therapeutic Monitoring Codes

CMS expanded the exclusion list to include specific remote therapeutic monitoring device supply codes related to respiratory and musculoskeletal systems. These services involve technology-enabled data collection over defined timeframes and reflect modern care delivery models beyond traditional facility-based monitoring. Their exclusion acknowledges that remote therapeutic monitoring represents an external clinical service model rather than an embedded SNF care function, warranting separate consideration under Medicare Part B.

Medicare Rules Providers Must Know

Medicare rules governing SNF Consolidated Billing establish how and when services are bundled into the SNF Prospective Payment System and when they remain separately payable under Medicare Part B. These rules apply primarily during covered Part A SNF stays and are designed to prevent duplicate payments while ensuring access to specialized care.

• Covered Part A Stay Requirement

SNF Consolidated Billing applies when a Medicare beneficiary is in a covered Part A SNF stay. During this period, most services related to the resident’s care are included in the SNF PPS payment. Medicare treats the SNF as financially responsible for bundled services, regardless of whether those services are delivered directly by the SNF or under arrangement. The presence of a covered Part A stay is the primary condition that activates consolidated billing rules.

• Therapy Services Outside Part A Coverage

Therapy services follow a unique Medicare rule within the consolidated billing framework. Physical therapy, occupational therapy, and speech-language pathology services remain subject to SNF consolidated billing even when the resident is not in a covered Part A stay. CMS maintains this distinction to ensure consistency in therapy reimbursement and to avoid fragmented billing across post-acute settings. This rule differs from most other non-therapy services, which are generally billed under Part B outside Part A coverage.

• Included vs. Excluded Services

Medicare differentiates services based on whether they are considered routine SNF care or specialized services beyond the SNF scope. In fact, included services are bundled into the PPS payment, whereas excluded services remain separately payable under Part B. This distinction is not based solely on provider type but on CMS policy determinations tied to service complexity, cost, and the typical site of care. Moreover, exclusion status is determined strictly at the HCPCS code level.

• HCPCS Code–Based Determinations

SNF Consolidated Billing rules are applied using detailed HCPCS and CPT code lists published by CMS each year. Medicare does not recognize broad service categories as excluded unless specific codes are identified. A service may be excluded in one year and included in another based on CMS evaluation. This code-specific structure allows Medicare to adjust payment policy in response to clinical advancements, utilization trends, and cost data.

• Annual CMS Updates and MAC Files

CMS updates SNF Consolidated Billing rules annually through Part A and Part B Medicare Administrative Contractor files. These updates reflect additions, deletions, and revisions to the exclusion lists and payment indicators. The annual update process ensures alignment with current Medicare coverage policies, newly approved services, and legislative changes. Medicare relies on these files as the official reference for determining billing treatment during the applicable calendar year.

• Interaction with Other Medicare Payment Systems

SNF Consolidated Billing functions alongside other Medicare payment systems rather than replacing them. Though SNF PPS governs bundled facility payments, Medicare Part B continues to apply to professional services, excluded items, and certain outpatient or technology-based services. CMS uses consolidated billing to coordinate these systems, ensuring that services are reimbursed under the appropriate payment methodology without overlap or duplication.

Conclusion

SNF Consolidated Billing in 2026 reflects Medicare’s continued effort to balance bundled post-acute payments with appropriate reimbursement for specialized and high-intensity services. The exclusion framework, code-specific determinations, and annual CMS updates collectively define how services are categorized across Part A and Part B payment systems. As these rules evolve to accommodate advanced treatments and technology-driven care models, accurate interpretation of Medicare policy becomes increasingly important. As a result, outsourcing SNF billing and coding services to 24/7 Medical Billing Services offers structured support aligned with SNF Consolidated Billing requirements. Therefore, this will help the healthcare organizations navigate Medicare complexity while maintaining consistency with current CMS guidance.

FAQs

Are observation stays treated the same as Part A SNF stays?

Observation stays do not trigger SNF Consolidated Billing because they are not Part A-covered stays.

Can an excluded service become included mid-year?

CMS may revise HCPCS status through annual or corrective updates, making mid-cycle monitoring important.

Are telehealth professional services subject to SNF Consolidated Billing?

Professional telehealth services remain excluded when billed under physician or practitioner Part B rules.