What is a Skilled Nursing Facility (SNF)?

Q: How is an SNF different from a nursing home?

SNFs provide short-term medical care and therapy under physician oversight, while nursing homes focus on long-term custodial care with less clinical involvement.

Q: Who licenses and certifies SNFs?

SNFs are licensed by state health departments and certified by CMS to bill Medicare and Medicaid, based on compliance with federal care standards.

Q: What services can SNFs bill for?

SNFs bill through the SNF PPS system for bundled services like skilled nursing, rehab therapy, medications, and medical supplies using PDPM classifications.

Q: Can SNFs bill for care management programs like CCM or CoCM?

No. SNFs typically cannot bill for CCM or CoCM under PPS. These services may be handled through discharge planning or external partnerships.

A Skilled Nursing Facility (SNF) is a licensed healthcare facility that provides round-the-clock medical care and rehabilitation services to patients who require a higher level of care than can be delivered at home but do not need acute hospitalization. Often used as post-acute care settings, SNFs serve patients recovering from surgery, stroke, injury, or chronic illness who need ongoing support from registered nurses, physical therapists, or other licensed professionals.

While the term “SNF” is often confused with “nursing home,” they are not the same — SNFs are Medicare-certified clinical facilities with defined care standards, while nursing homes may focus more on long-term custodial care.

Key Components of a Skilled Nursing Facility

Medicare-Certified under CMS rules (Title 18 and 19 providers)
Must have licensed nursing staff available 24/7
Provides short-term, medically necessary care — not custodial or residential care
Offers rehabilitation services, including physical, occupational, and speech therapy
Often used as post-discharge step-down settings after hospital stays
Eligible to bill Medicare Part A under SNF PPS (Prospective Payment System)
Care is typically directed by a Qualified Health Professional (QHP) with RN and PT/OT support teams

How Skilled Nursing Facilities Work in Practice

Skilled Nursing Facilities (SNFs) operate as regulated, short-term care settings for patients who require daily medical support or rehabilitation following a hospital discharge. They play a critical role in the post-acute care continuum, often bridging the gap between inpatient hospitalization and home-based recovery.

Key Operational Characteristics of SNFs:

Medical Supervision: Each SNF has a physician or medical director who oversees patient care, supported by RNs, LPNs, nurse aides, and therapists
Care Plan Requirements: Patients must receive a personalized care plan reviewed by a licensed clinician
Therapy Services: Most SNFs offer physical, occupational, and speech-language therapy multiple times per week
Length of Stay: Typically short-term (7–30 days), but can vary based on clinical need and payer coverage
Admission Criteria: Must meet medical necessity and be ordered by a physician (especially for Medicare Part A billing)
Interdisciplinary Care Teams: Include nursing, social work, dietary, therapy, and administrative professionals working together
Transfer Patterns: Patients are commonly referred from hospitals and discharged to home, assisted living, or hospice

SNFs may also participate in value-based care initiatives, including Transitional Care Management (TCM), Principal Care Management (PCM), and remote care coordination programs.

Skilled Nursing Facility vs Nursing Home

Although the terms “Skilled Nursing Facility (SNF)” and “nursing home” are often used interchangeably, they refer to two very different types of care settings — especially in terms of medical scope, licensing, and reimbursement.

Here’s how they compare:

A side-by-side comparison table titled “Skilled Nursing Facility vs. Nursing Home” lists eight features. For purpose: SNFs provide short-term medical care and rehab, while nursing homes provide long-term custodial care. SNFs have 24/7 licensed nursing and physician oversight, while nursing homes may lack full-time clinical staff. SNFs offer IV therapy, rehab, and medication management; nursing homes offer basic daily living support. SNFs are licensed as clinical facilities under Medicare/Medicaid; nursing homes are residential facilities. Medicare covers SNFs for eligible patients; nursing homes are typically not covered. SNFs are for short-term stays, nursing homes are long-term. SNFs require a physician-directed care plan; nursing homes may not.

Benefits and Challenges of Skilled Nursing Facilities

Skilled Nursing Facilities (SNFs) play a critical role in the post-acute care ecosystem, offering medically necessary services that support recovery and reduce hospital readmissions. However, operating or coordinating care through SNFs also involves significant regulatory complexity and logistical constraints.

Benefits of SNFs

Medically Supervised Recovery: Patients receive 24/7 clinical oversight and structured therapy after discharge
Medicare Coverage for Eligible Patients: Short-term SNF care is often covered under Medicare Part A for up to 100 days
Supports Transitional Care Goals: SNFs help bridge the gap between inpatient hospitalization and home-based care
Enables Intensive Rehab: Facilities provide physical, occupational, and speech therapy multiple times per week
Reduces Readmission Risk: When managed well, SNF stays can prevent bounce-backs to the hospital
Qualified Care Teams: Staff typically include RNs, PTs, OTs, social workers, and licensed administrators

Challenges of SNFs

Strict Medicare Billing Rules: Must meet daily skilled care criteria, physician orders, and face scrutiny under SNF PPS audits
High Operational Costs: Staffing, licensing, and regulatory compliance place pressure on margins
Documentation Burden: Care teams must produce detailed MDS assessments, care plans, and progress notes
Variable Quality: Performance, staffing ratios, and infection control standards vary significantly across facilities
Discharge Planning Complexity: Coordinating transitions from SNF to home or hospice requires tight communication and often external support tools
Limited Reimbursement Beyond Acute Need: Many SNFs face financial pressure once a patient no longer meets “skilled” status

Licensure and Certification for Skilled Nursing Facilities

In the U.S., Skilled Nursing Facilities (SNFs) are not “recognized” like FQHCs — instead, they must obtain state licensure and federal certification to legally operate and bill Medicare or Medicaid.

Licensure Requirements

SNFs must be licensed as nursing facilities by their state’s health department or regulatory agency
State licensure confirms compliance with fire, safety, staffing, and operational standards
Requirements vary by state but generally include inspections, background checks, and staffing ratios

CMS Certification

To receive payment from Medicare or Medicaid, SNFs must be certified by the Centers for Medicare & Medicaid Services (CMS) under:

Medicare Part A (Title 18) for skilled care reimbursement
Medicaid (Title 19) for long-term care services

Certification is based on meeting Conditions of Participation, which include:

24/7 licensed nursing
Medical director oversight
Patient assessment and care planning
Documentation and reporting (e.g., MDS)

SNFs are routinely surveyed by state survey agencies acting on behalf of CMS, and can lose certification if found out of compliance.

Reimbursement and Billing for SNFs

SNFs operate under a distinct payment structure known as the Skilled Nursing Facility Prospective Payment System (SNF PPS). This system is used by Medicare Part A to reimburse for short-term skilled care.

How SNF PPS Billing Works:

Medicare pays a daily per diem rate based on the patient’s clinical profile, functional status, and therapy needs
The system is powered by PDPM (Patient-Driven Payment Model) — not service-level CPT codes
Billing is tied to accurate Minimum Data Set (MDS) assessments, which determine the case-mix classification
Coverage is limited to up to 100 days per benefit period, with the first 20 fully covered and coinsurance applying after that

A two-column table titled “What SNFs Can Bill For” lists five service categories and their corresponding billing mechanisms. Routine skilled care, such as RN and wound care, is included in the SNF PPS daily rate. Rehab services like physical, occupational, and speech therapy are included under PDPM classification. Medications and supplies are often bundled, with some possibly billed separately. Telehealth services are limited and allowed only under special waivers or arrangements. Care management programs, such as CCM, are not directly billable under SNF PPS and must be addressed through discharge planning or partnerships.

Frequently Asked Questions about SNFs

1. What is a Skilled Nursing Facility (SNF)?

A Skilled Nursing Facility (SNF) is a licensed clinical care setting that provides short-term medical treatment and rehabilitation services for patients recovering from illness, surgery, or hospitalization. SNFs are certified by Medicare and staffed with licensed nurses and therapy professionals.

2. How is an SNF different from a nursing home?

SNFs deliver short-term, medically necessary care — including IV therapy, wound care, and rehab — under physician supervision. Nursing homes provide long-term custodial care, such as help with bathing or eating, and often lack the same clinical staffing or Medicare coverage.

3. Who licenses and certifies SNFs?

SNFs must be licensed by their state health department and certified by CMS (Centers for Medicare & Medicaid Services) to bill Medicare and Medicaid. Certification requires compliance with federal Conditions of Participation and regular facility surveys.

4. What services can SNFs bill for?

SNFs bill Medicare under the SNF Prospective Payment System (SNF PPS). Covered services include skilled nursing, physical/occupational therapy, medications, and medical supplies — all bundled into a per diem rate based on the PDPM classification.

5. Can SNFs bill for care management programs like CCM or CoCM?

No — SNFs generally cannot bill directly for CCM or CoCM under PPS. These services may be addressed through discharge planning, external partnerships, or by eligible providers post-discharge.