The following tackles the issues of Pulmonary Rehabilitation and Respiratory Therapy (PR-RT) services furnished to residents of SNFs. First published in January, the below is a much-needed update.

At Issue

First, this is not a clinical discussion. A service can have clinical value and still not be payable under the billing pathway someone chose for it. The question is whether, how and by whom PRRT is billable to Medicare Part B when the patient lives in a nursing facility. The answer depends on the procedure, the setting, the bill type, and the resident’s status. It is not a general SNF entitlement to bill respiratory services.

Utilization patterns in a growing number of SNFs cannot be reconciled with the rules. This is not anecdotal; we cross-contextualized provider-specific Medicare Part B claims, cost reports, MDS/PDPM classifications, PBJ staffing and other CMS data. A statistical outlier is not a finding of misconduct. Even so, the findings took my breath away.

Respiratory Therapy

Respiratory Therapy is not categorically equivalent to Physical, Occupational, or Speech Therapy – confusion is rooted in nomenclature. RT encompasses a broad spectrum of clinical modalities defined by the service, not the clinician delivering it. In many states, services commonly furnished by Respiratory Therapists fall within the scope of practice of Registered Nurses and, in some jurisdictions, Licensed Practical Nurses. In other words, a nebulizer treatment delivered by an RN, or an RT, or a physician, is a nebulizer treatment.

Respiratory therapists have no separate Medicare billing authority and no benefit category of their own. Routine respiratory care is part of what the nursing facility already does. A credential in the room does not create a Medicare benefit. [1, 7]

Medicare – Medicaid

The point of controversy arises with long-stay, dual-eligible residents. Medicaid pays for the long-term stay because Medicare does not cover custodial care. That does not make Medicaid primary. For any service Medicare covers, Medicare pays first; Medicaid is the payer of last resort. [6] So the question is not who pays first. It’s whether Medicare covers the service at all – and whether Medicaid already paid for it.

Medicaid rate construction is state-specific and too detailed for a full breakdown here. Many states build routine respiratory costs into the per diem; some do not. If respiratory costs are in the Medicaid rate, billing Medicare Part B for the same services is a duplication risk. The reverse doesn’t work, either: leaving RT out of the Medicaid rate does not create Medicare coverage.

Examples of routine respiratory care include:

•     Nebulizer or inhaler administration

•     Chronic oxygen monitoring

•     Maintenance breathing exercises and prophylactic incentive spirometry

•     Generic education absent a new skilled need

•     Services nursing staff can safely and effectively provide

TECHNICAL NOTE - The first question is always whether Medicare covers this service, from this provider, in this location, on this claim. Everything else is commentary.

Medicare Part B: The Bill Type Comes First

The “routine versus ancillary” debate gets the most airtime, but the bill type settles more claims than any argument. CMS established the relevant billing edits in Transmittal 351 (CR 3531), issued Oct. 29, 2004, and effective Jan. 1, 2005. The edits prohibit payment on SNF inpatient Part B claims (Type of Bill 22X) for specified revenue codes, with remark code M28 on the denial [1, 2].

Noridian applies that restriction to respiratory services, revenue code 041X: respiratory care is bundled during a covered Part A stay and, once Part A benefits are exhausted, is “not payable under Part B in the SNF setting.” Noridian leaves a narrow opening for certain Ato-B rebills and nothing more [3]. Note the date. This is not new policy. It has been on the books for more than two decades.

Two caveats keep this honest. First, the edit applies to 22X, not 23X, the outpatient bill type. But 23X is not an alternative billing pathway for a resident occupying a Medicare-certified SNF bed. CMS requires 22X for Part B services furnished to those residents, including when Part A coverage has ended. TOB 23X applies to SNF outpatients and certain beneficiaries residing outside the Medicare-certified portion of a facility [1]. If respiratory dollars are flowing, the resident’s location and bill type are the first things to check.

Second, the edit does not reach every physician, diagnostic or qualified outpatient service a resident receives from someone else, billed under that provider’s own rules. It does reach the SNF’s billing of routine respiratory care to Part B under its own provider number.

The Contractor Has Spoken (Twice)

Program defenders will quote Noridian's 2025 advisory group minutes. Reviewing one SNF claim, Noridian called spirometry, pulse oximetry, and inhaler-education codes "respiratory therapy codes, which would be services allowed in a SNF," and noted that RT is not subject to SNF consolidated billing for Part B residents." [4].

Then Noridian went to the manual. In February 2026, it removed TOB 22X from its respiratory billing article to align with Chapter 7, §10.1.1. In June 2026 it published the denial guidance above, in both Jurisdiction E & F [3, 4]. Quote 2025 minutes if you like. Noridian has moved on.

The same minutes record that vendors were visiting SNFs claiming their programs were “endorsed by Medicare” [4] - they weren’t.

Skilled Respiratory Procedures (G0237–G0239)

HCPCS G0237–G0239 describe individual respiratory therapeutic procedures, not a pulmonary rehabilitation program. Where a payable pathway exists, coverage requires a physician or qualified practitioner order, a specific medical need, a patient-specific plan, qualified personnel and complete records [7]. The codes’ existence does not override the 22X edit.

These procedures are not billable because a credentialed RT happens to be on the floor. Nor is a service automatically routine because an RN could perform some version of it. But if an RN can safely deliver the treatment as part of ordinary care, Medicare Part B is not the payer. “Time limited” is not an open-ended concept. Routine maintenance care, even when repeated daily, does not qualify.

Pulmonary Rehabilitation (CPT 94625–94626)

Medicare Part B covers Pulmonary Rehabilitation as an outpatient benefit. Since Jan. 1, 2022, it has been billed with CPT 94625 (without continuous oximetry) and 94626 (with continuous oximetry); HCPCS G0424 was deleted at the end of 2021 [8]. 

42 CFR §410.47 requires a qualifying diagnosis (moderate to very severe COPD, or persistent post-COVID respiratory dysfunction, plus any nationally approved indications), a physician-prescribed program of exercise, education, psychosocial assessment, and outcomes assessment, an individualized treatment plan, and physician or qualified NPP supervision. And it names the setting: a physician’s office or a hospital outpatient department [8].

A SNF is neither.

Noridian put it plainly: all CMS guidance says PR “cannot be reimbursed when performed in a SNF” [4]. The divide between a formal outpatient program and respiratory assistance embedded in custodial care is more than a divide; it is a chasm. A long-stay resident may be clinically eligible for PR. That doesn’t make the SNF’s dayroom a hospital outpatient department.

Physician or External Outpatient Services

Certain physician services, diagnostics, and external outpatient services (e.g., ventilator management, pulmonary function testing) may be separately billable under their own rules. These exceptions are definable and narrow. They do not convert routine respiratory therapy furnished by the SNF into a Part B-covered ancillary by association [5, 7].

Current Billing Patterns and Compliance Risk

Recent SNF-based PR-RT billing patterns diverge sharply from statistically plausible scale and scope. Classic markers of a questionable program include:

Large proportions of long-stay residents enrolled in similar treatment plans.

Near-daily or ongoing therapy for chronic conditions, without reassessment.

Utilization clustering at time or payment thresholds.

Uniform documentation across clinically dissimilar residents.

Services that start shortly after Part A coverage ends.

Services furnished exclusively to FFS Medicare Part B residents.

The last point is critical. If a service is medically necessary, it is medically necessary for the Medicare Part A or Medicaid-only resident in the next bed, too.

In other words, you cannot document a cure for a structurally non-compliant claim.

Frequently Aired Questions (FAQ)

Why did RT utilization surge?

Systemic overutilization may begin as a simple oversight: a service appears on a claim and is paid. Payment suggests coverage, utilization expands, ideas are shared, and well-intentioned vendors spread the practice, often with an indemnity attached. At that point, the practice becomes normalized.

But so many providers are billing it.

As stated: normalized. A popular billing pattern is evidence of a trend, not of coverage.

My documentation is exemplary.

Excellent records cannot cure a noncovered setting, a prohibited bill type, or a service outside the benefit. Starting with the conclusion and building a narrative that fits is a time-tested approach.

Time has spoken many times.

Why are the MACs paying claims?

Medicare operates on a pay-and-review basis, and enforcement follows patterns, not first claims. But don’t mistake payment for permission. CMS has had a 22X edit on the books since 2004, and at least one MAC is now enforcing it out loud. When a claim pays anyway, find out exactly what was billed – bill type, revenue code, HCPCS – before you call it validation. [1–3]

How do you interpret the data?

Cross-contextualization. Discrepancies between billed units, staffing, expenses, case mix, and payer mix become visible when claims, cost reports and operational data are reviewed together.

A SNF’s Data Profile matters, and it is not invisible.

Isn’t the contractor responsible?

Ultimately, no. If the claim goes out under the SNF’s provider number, the SNF owns it. Contractors design and staff programs, but liability follows the billing provider, and no indemnity overrides CMS rules. Read yours carefully: many cover what the SNF paid the vendor, not what Medicare paid the SNF. If yours is one of them, it’s a net negative either way. Read the contract before you rely on the hall pass.

What level of utilization is reasonable?

There is no national quota. For illustration only, a 100-bed SNF without ventilator capacity might see a handful of residents a month with individually supportable respiratory needs, each receiving a short course of care. Revenue in the $1,500-a-month range is hypothetically plausible, but only where an independently payable pathway exists, and the cost would likely outweigh it.

For SNF-billed Pulmonary Rehabilitation, the setting rule sets the number at zero. 

What is my exposure?

We don’t know how Medicare will proceed. One near certainty is they take back what was paid without a payable service or pathway. Anything beyond that depends on facts, timing and knowledge – and the answer is claim-specific.

Anything else I should know?

Yes. The impact extends beyond payment:

 Operations: Clustered treatments pull residents away from nursing care for extended periods; scheduling and PBJ reporting are affected. RT hours do not count as nursing hours for Five-Star.

 Case-Mix: Seven days of qualifying respiratory therapy can place a resident in PDPM Special Care High, provided the Nursing Function Score is 14 or lower. The October 2026 RAI Manual clarifies that maintenance, or prophylactic incentive spirometry qualifies only when skilled supervision is clinically necessary [9]. In budget-neutral state case-mix systems, when one facility inappropriately captures a higher weighted PDPM score, their rate goes up, but unless new Medicaid funds are added, that rate increase is subsidized by other providers. 

 Quality: Higher reported acuity raises case-mix expected staffing. If nursing hours don’t keep pace, the Five-Star staffing rating can fall [10].

 Litigation: Distorted Data Profiles make impactful soundbites for the Plaintiff’s Bar, starting with a sudden shift to high-acuity care without added nursing hours.

 Valuation & Underwriting: Medicare Part B is a fragile driver of financial performance. PRRT at scale can blow up the underwriter’s model. No one wants to be on the wrong side of that transaction.

By the Numbers

The number of SNFs billing respiratory and pulmonary services to Part B began climbing in Q1 2022. By 2024, Zimmet Healthcare Services Group had fielded inquiries from operating companies representing thousands of providers considering the program.

More than 1,000 providers billed in at least one quarter of 2023; that number abruptly fell to 608 in Q1 2024, then began to climb again. For the 12 months ended 6/30/25, 708 providers billed at least one discipline, with average reimbursement in the pulmonary series approaching $400,000 annualized.

A word on labels. The “PR” series below is a revenue-code grouping, not a count of CPT 94625/94626 claims. Revenue code 046X is Pulmonary Function, which ordinarily means testing. In the one SNF “pulmonary rehab” claim Noridian reviewed, the codes turned out to be spirometry, pulse oximetry, and inhaler education [4]. Either way, it isn’t pulmonary rehabilitation – and it’s a great deal of money.

Net Medicare Part B reimbursement, 7/1/24 - 6/30/25

Source: z-INTEL. “PR” reflects the pulmonary revenue-code grouping, not CPT 94625/94626 specifically.

Air Compliance Index

Take our simple self-diagnosis test by answering True or False about your Respiratory / Pulmonary care program (non-vent unit).  

☐ We know the exact bill type, revenue code and HCPCS/CPT code for every respiratory claim – and none are 041X on TOB 22X.

☐ No Pulmonary Rehabilitation (CPT 94625/94626) is billed under the SNF’s provider number.

☐ An RT is always onsite or on-call when required.

☐ Urgent respiratory interventions are performed by personnel qualified to provide them.

☐ Nursing staff cannot safely provide the services.

☐ Services are patient-specific, time-limited and goal-directed; there is no standard utilization protocol.

☐ Residents rarely begin treatment shortly after Medicare Part A benefits end.

☐ When they do, it is because of a significant change in their clinical risk profile.

☐ Billed treatment units reconcile to RT hours on payroll and contract records.

Answer the next two only if services are under contract with a third-party company:

☐ Documented respiratory care failures existed before the vendor contract began.

☐ The vendor is paid in full for their services, even if Medicare denies the claim.

Medicare coverage controversies are nothing new. In fact, this is the second time around for Respiratory Therapy. Under SNF cost-based reimbursement in the 1990s, Medicare permitted certain respiratory costs to shift from “Routine” to “Ancillary” when programs and therapists were managed by acute care hospitals. The payer at the time was Medicare Part A. SNF PPS implementation abruptly ended the practice while multiple cases remained under review. The payment mechanics differ today, but the pattern is familiar.

New billing pathways emerge, utilization accelerates, payments flow, and confidence builds - until enforcement catches up. In January, we said we were waiting for definitive guidance. We’re still waiting for CMS to clear the air.

But a Medicare contractor has cited the manual, CMS has tightened the MDS, and the vendors’ “endorsed by Medicare” pitch has made it into a MAC’s meeting minutes. You’d think that would be enough to avoid the program like someone coughing next to you on a train. Sadly, it’s not. I’m reissuing this paper because if I have to verbally explain it again, I’m going to need RT, and my insurance doesn’t cover it.

Note that this paper is opinion, not policy. We have no insight into state or federal intent, but the notion that Medicare would sustain large-scale, long-term respiratory or pulmonary spending in SNFs while aggressively seeking savings everywhere else defies logic.

It is difficult to envision Medicare opening the wind tunnel on this one. Don’t hold your breath. Providers already deeply invested in these programs should come up for air.

Marc Zimmet is the CEO of Zimmet Healthcare Services Group.

Regulatory and Data References

[1]      CMS, Medicare Claims Processing Manual, Pub. 100-04, Chapter 7, §§10–10.1.1 (SNF Part B billing; editing of SNF Part B inpatient services).

https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/clm104c07.pdf

[2]      Centers for Medicare & Medicaid Services. Editing of Hospital and Skilled Nursing Facility Part B Inpatient Services. Transmittal 351, Change Request 3531. Issued October 29, 2004; effective January 1, 2005. CMS MLN Matters MM3531.  

[3]      Noridian Medicare, “Respiratory Care in Skilled Nursing Facility,” June 4, 2026 (Jurisdiction F Part A; identical article published for Jurisdiction E).

https://med.noridianmedicare.com/web/jfa/article-detail/-/view/10529/respiratory-care-in-skilled-nursing-

facility

[4]      Noridian Medicare, Jurisdiction E and F Provider Outreach and Education Advisory Group, Meeting Minutes, June 9, 2026 (including prior-item history from December 2024 forward). https://med.noridianmedicare.com/web/jea/education/poe-advisory-group/minutes-060926

[5]      CMS, Skilled Nursing Facility Consolidated Billing, overview and excluded services. https://www.cms.gov/medicare/coding-billing/skilled-nursing-facility-snf-consolidated-billing

[6]      Medicare.gov, “Medicaid” (dual-eligible coordination: Medicare pays first for covered services; Medicaid pays last). https://www.medicare.gov/basics/costs/help/medicaid

[7]      CMS Medicare Coverage Database, Billing and Coding: Respiratory Care (A57224); revised February 12, 2026, to remove TOB 22X.

https://www.cms.gov/medicare-coverage-database/view/article.aspx?articleId=57224

[8]      42 CFR §410.47, Pulmonary rehabilitation program: Conditions for coverage; CPT 94625/94626 replaced HCPCS G0424 effective January 1, 2022. https://www.law.cornell.edu/cfr/text/42/410.47

[9]      CMS, MDS 3.0 RAI User’s Manual v1.20.11, effective October 1, 2026, Section O (skilled respiratory therapy) and Chapter 6 (PDPM).

[10]   CMS, Nursing Home Five-Star Quality Rating System Technical Users’ Guide.

https://www.cms.gov/files/document/five-star-users-guide-september-2026.pdf