Medicare Update for Clinical Social Workers

NASW is currently  receiving telephone calls from members regarding Medicare changes in reimbursement  for  clinical social workers who file claims for services provided in skilled nursing facilities (SNFs). Members are reporting that Medicare carriers are: (1) denying claims submitted for services provided in  SNFs; and (2) requesting refunds of  claim payments previously made for  services provided in SNFs under Medicare Part A. Thus far, members have voiced concerns from the states of  California, Florida, Georgia, Illinois, Kansas, Michigan, Missouri, New Jersey, North Carolina, Ohio,  Pennsylvania, Tennessee, Texas, Virginia, and Wisconsin. NASW evaluated  these reports from members, discussed the situation with several Medicare carriers, and requested documentation from the Centers for Medicare and Medicaid Services (CMS). A summary of the Medicare changes as they relate to clinical social workers follows.


CMS Program Memorandum Carriers, Transmittal B-02-067, Change Request 2360, was sent to Medicare carriers on October 26, 2002. This memorandum was a revision to Consolidated Billing in  SNFs and implementation of  Common Work File Edits for clinical social workers billing for services provided in SNFs.

In this memorandum, Medicare carriers were informed by CMS to enforce the Balanced Budget Act which states that services provided  by clinical social workers to Medicare beneficiaries in a Part A SNF stay cannot be billed separately to the Medicare carrier.  Payment for these services is included in the prospective payment rate paid to SNFs. Although this policy has been in effect since April 1, 2001, official enforcement began on April 1, 2003. However, some members have reported earlier enforcement by their Medicare carrier.


There are several enforcement concerns about CMS Change Request 2360:

  • Some clinical social workers have received letters from Medicare carriers requesting recovery of funds previously paid to them for patient services provided in  SNFs during a Medicare Part A stay. The amounts specified for repayment range from hundreds to thousands of dollars, presenting an unexpected hardship for many clinical social workers. As a result, some clinical social workers have been forced to close their private practice and seek independent contracts in specialty areas other than SNFs. 
  • Medicare carriers have been inconsistent in how they are complying with the Balanced Budget Act. Several Medicare carriers are not seeking recovery of refunds for services provided prior to April 1, 2003. However, some carriers are requesting refunds for services retroactive to April 1, 2001 and others are requesting refunds of payments for services dated to 1999. 
  • Medicare carriers are also automatically rejecting claims filed by clinical social workers who use  “place-of-service” code number 31 on the claim form. (Code number 31 is the designation for a “skilled nursing facility”.)  It is important for clinical social workers to resubmit  denied claims  for a Medicare Part B stay with the proper “place of service code” (32 for nursing facility or 33 for custodial care). Clinical social workers should also utilize the psychotherapy Current Procedural Terminology (CPT) Codes  for “residential care” rather than an “outpatient  in office” service.

The following steps provide alternatives  for clinical social workers who may receive letters from Medicare carriers for claim denials and/or  requests for refund of overpayment of services provided in a SNF:

  • Give the letter your prompt attention and outline your action plan. Review and note the time for response and appeal. Remember that the Medicare carrier should only collect for overpayment of dates of services rendered in a Part A stay on or after April 1, 2001.
  • Review the claim to see if coding was a problem. If so, resubmit the claim and use the proper place-of-service codes when billing. For a Medicare Part B stay, use place of service codes 32 (nursing facility) or 33 (custodial care facility). Use the psychotherapy CPT codes for residential care when billing.
  • Review your Medicare records to see if the Medicare carrier properly informed you of the changes prior to implementation.
  • Consult an attorney experienced in Medicare issues.
  • Write to  to share your concerns with NASW.
  • Remain calm and objective.

NASW is advocating for clinical social workers to receive reimbursement of services provided in a Medicare Part A stay of a SNF and has supported introduction in the Senate, First Session of the 108th Congress,  the “Clinical Social Work  Medicare Equity Act of 2003”. This Act would amend Title XVIII of the Social Security Act to permit direct payment under the Medicare program for clinical social work services provided to residents of skilled nursing facilities. In the meantime, NASW  plans to continue discussions with Medicare carriers and CMS to advocate on behalf of  our members.
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