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Elevating Patients Care & Maximizing Facility Reimbursement

The Opportunity:  Medicaid is a major source of funding for many nursing homes. CMI analysis is crucial for understanding how the acuity and needs of a beneficiary affects reimbursement. A higher CMI directly correlates with increased Medicaid payments which covers the cost of patient care.

Changes on the Horizon: States have an additional two years after October 1, 2023, to implement PDPM methodology. This implies that Medicaid will no longer recognize RUG-III or RUG-IV for federal assessments after PDPM adoption.

Here is what we know so far:

  • Effective July 1, 2024, Kentucky will implement PDPM methodology for Medicaid.
    • Rates effective 1/1/2024 are calculated using RUGs. Rates effective 4/1/2024 will be frozen at the prior quarter’s rates (those effective 1/1/2024). Beginning 7/1/2024, rates will be calculated using PDPM. Rebasing provider rates is also being considered. Additional calculation details to be released.
  • Ohio will continue to determine direct care rates using RUG-IV for this biennium.
    • Effective 10/1/2023, RUGs case mix scores could only be calculated from the Optional State Assessments (OSA). After 10/1/2023, providers were allowed to freeze their case mix for the biennium, thereby eliminated the need for OSAs.
    • No additional information is available for Indiana or Michigan at this time.

Current Methodology:  By benchmarking facility data compared to state and national averages and breaking down report components, we as a team can better assess how we measure up in terms of resident acuity and case-mix. This information guides quality improvement initiatives in a targeted manner.

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