Nebraska: Nursing Facility Reimbursement Model Migration from RUGs to PDPM

Mary Madison, RN, RAC-CT, CDP
Clinical Consultant – Briggs Healthcare

This provider bulletin is being issued to notify Medicaid nursing facility providers of the upcoming switch to the Patient Driven Payment Model (PDPM) for Minimum Data Set (MDS) assessments.

Effective July 1, 2023, Nebraska Medicaid will switch from Resource Utilization Group III, Version 5.2 Grouper 34 (RUG III) methodology to PDPM for MDS assessments. This change follows an announcement from the Centers for Medicare and Medicaid Services (CMS) which removes Section G from MDS assessments effective October 1, 2023.

Due to this decision, Nebraska Medicaid is migrating to the PDPM methodology (nursing component only model) for determining resident care levels effective July 1, 2023.

Nursing facility staff do not need to make changes for eligible residents to be converted to PDPM care levels in the Medicaid Management Information System (MMIS) on July 1, 2023. MMIS staff will run a one-time conversion for all Medicaid-eligible residents with active stays to PDPM classification.

The requirements for accurate MDS assessments have not changed. Facilities must continue to submit correct and accurate MDS assessments reflecting resident improvements and declines as defined by the Resident Assessment Instrument Manual.

From July 1, 2023, to September 30, 2023, nursing facility monthly care level reports will include RUG III and PDPM data. Effective October 1, 2023, monthly care level reports will only contain PDPM data as the RUG III methodology will end.

PDPM care levels will be based on the nursing component character of the HIPPS (Health Insurance Prospective Payment System) code. The number of care levels will be reduced from 34 to 25. The table below includes additional information on the updated codes.