Indiana Medicaid Rates Are Shifting, and PDPM Is Just Around the Corner
Change is underway for nursing facility Medicaid reimbursement in Indiana, and while some updates take effect sooner than others, all of them are worth providers’ attention now.
An official announcement has been released outlining changes to Nursing Facility Medicaid rates effective State Fiscal Year (SFY) 2027, along with continued planning for the future implementation of the Patient Driven Payment Model (PDPM). The full announcement is posted on the Myers and Stauffer website.
What’s Changing for SFY 2027 Medicaid Rates
For SFY 2027, Indiana will adjust the Minimum Data Set (MDS) reporting period used to calculate Medicaid Case Mix Indexes (CMIs). Instead of relying on more recent assessments, Medicaid CMIs for SFY 2027 will be based on MDS data reported during SFY 2026. Specifically, assessments from September 1, 2024, through August 31, 2025, will be used, with data weighted by Medicaid days.
The resulting Medicaid CMI will be applied to both semi-annual rate periods in SFY 2027. Rates effective July 1, 2026, will reflect this calculated CMI, including any revisions resulting from MDS reviews for that reporting period. That same CMI will also apply to the January 1, 2027, rate period, again incorporating any changes identified through the review process.
PDPM: Not Here Yet, But Getting Closer
While Medicaid rate changes are imminent, PDPM implementation remains a future event. Indiana continues to target SFY 2028, effective July 1, 2027, for adopting PDPM for nursing facility rate setting. Although discussions are still ongoing, the announcement provides insight into the structure Indiana plans to use when PDPM is implemented.
Indiana’s PDPM approach will rely on the PDPM Nursing Component and will use Medicare PDPM Nursing Component CMI weights that were in effect on October 1, 2023. The low-needs resident classification will be eliminated under PDPM, and Interim Payment Assessments (IPAs) will be considered valid for resident classification and assignment of days. These design choices signal a meaningful shift from the current case-mix methodology and underscore the importance of accurate and timely MDS reporting.
Preliminary PDPM Reports: A Practice Run with Purpose
Providers have already begun receiving Preliminary PDPM Time-Weighted CMI Resident Roster Reports. While these reports are not being used for reimbursement at this time, they serve as an early look at how resident classification and case mix may appear under PDPM.
The first set of preliminary reports, covering Q4 2025, was posted on December 10, 2025, through the Indiana MDS Web Portal. Providers are encouraged to review these reports carefully, paying close attention to assessment sequencing, submission accuracy, classification logic, and coding. Identifying and correcting issues now will help facilities avoid complications once PDPM becomes operational.
Your Power Points
Although PDPM reimbursement is still on the horizon, the direction is clear. MDS accuracy today will directly influence Medicaid rates tomorrow. Facilities that actively monitor preliminary reports, address data issues, and stay informed as guidance evolves will be better positioned for a smoother transition.
Additional communication is expected as PDPM implementation approaches, and providers should continue monitoring updates from Myers and Stauffer.
Questions or Need Clarification?
Providers with questions regarding SFY 2027 Medicaid rates or PDPM reporting should contact Myers and Stauffer directly at 317-816-4122 or via email at INHelpDesk@mslc.com or LTCdept@mslc.com. The full announcement is available on the Myers and Stauffer website for reference.
Written By: Sheena Mattingly, EVP of Quality & Compliance
