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Proposed Rule Could Affect Nursing Facilities Negatively

MacKenzie Kimball, for HealthLeaders Media, May 18, 2009

A proposed Centers for Medicare and Medicaid Services (CMS) rule could have a negative impact on reimbursement for skilled nursing facilities (SNFs).

The proposed rule, released on May 1, calls to implement a new case-mix classification model, known as Resource Utilization Group, Version Four (RUG-IV), for FY 2011. Some of the changes incorporated into RUG-IV significantly deviate from the currently used model, RUG-III.

Medicare uses a case-mix classification system to assign a nursing home resident to a RUG category based on his or her medical conditions and the resources needed to provide care. Each RUG category is tied to a Medicare payment rate. Based on results from the Staff Time and Resource Intensity Verification (STRIVE) project, CMS believes that the RUG-III system is no longer an effective way to determine resource time required to care for certain conditions.

Some of the changes incorporated into RUG-IV are:

  • Number of RUG categories will increase from 53 to 66
  • Special Care category will split into two separate categories: Special Care High and Special Care Low
  • Impaired Cognition and Behavior categories will combine into one category: Behavioral Symptoms and Cognitive Performance
  • Revised qualifiers to classify into residents into RUG categories
  • Adjustments to activities of daily living (ADL) index, including RUG-IV ADL score ranges from 0 to 16, whereas RUG-III ADL score ranges from 4 to 18; and revisions to the eating component ADL score to better categorize residents who receive feeding assistance
  • Revisions to calculation of therapy minutes
  • Modified look-back period for items in section P1a of the MDS 2.0, Special Treatments and Procedures, to include only those services provided while patient is a resident of the SNF

For a chart of the proposed RUG-IV categories and other useful tools, visit the Resources page of MDSCentral.


MacKenzie Kimball is an associate editor in the long-term care market at HCPro. She writes PPS Alert for Long-term Care and manages MDSCentral.

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