Harmony Healthcare Blog

ICYMI: PDPM: Impact on Medicaid Case Mix States

Posted by Kris Mastrangelo on Thu, Jul 25, 2019


Edited by Kris Mastrangelo

C.A.R.E.

Compliance • Audits/Analysis • Reimbursement/Regulatory/Rehab • Education/Efficiency


Be Prepared sign with sky background-2At Harmony Healthcare International (HHI), we are receiving many inquiries on how the PDPM payment system will impact Medicaid Case Mix States.  

Effective October 1, 2019, CMS will replace the existing Resource Utilization Group (RUG), Version 4 Case Mix methodology that is used to classify Skilled Nursing Facility (SNF) patients in a covered Part A stay for payment purposes under the SNF Prospective Payment System with a new Case Mix classification model, the Patient Driven Payment Model (PDPM). 

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  1. On October 1, 2020, CMS will no longer support RUG-III and RUG-IV Case Mix methodologies via the Minimum Data Set (MDS).
  2. For States that rely on RUG-III and RUG-IV assessments for calculating their State Medicaid Case Mix groups, CMS has created an optional assessment so that Medicaid payment is not adversely impacted when PDPM is implemented on October 1, 2019.
    • States will have some flexibility in crafting policies associated with this assessment.
    • The optional assessment will be effective from October 1, 2019 through September 30, 2020.
  3. Over the next few years, CMS will be removing several MDS data elements.  With the transition to PDPM, many MDS data elements used in RUG-III and RUG-IV are no longer required for Federal purposes.  Hence, RUG-III and RUG-IV will no longer be functional with the removal of these data elements.
  4.  After October 1, 2020, states that continue to use RUG-III or RUG-IV for State Medicaid Case Mix reimbursement will need to implement a new process to gather the needed data.
Harmony Healthcare International (HHI) is available to assist with any questions or concerns that you may have.  You can contact us by clicking here.  Looking to train your staff?  Join us in person at one of our our upcoming Competency/Certification Courses.  Click here to see the dates and locations. 

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Tags: Case Mix, Patient-Driven Payment Model

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