November 16, 2022 | Net Health

3 min read

Pulling the RUGs Out: States Must Transition to PDPM Next October

Long ago, in the pre-COVID era, CMS announced major changes to the MDS for October 1, 2020. While these changes were put on hold due to the Public Health Emergency, we all knew that eventually they would take effect.

Now the time is come: the new MDS item set will be effective October 1, 2023. One major change in the new MDS is the elimination of Section G. Without Section G, of course, Resource Utilization Groups (a.k.a RUGs) will become a thing of the past.

Let’s pause for a moment to shed a tear…

While states have had the option to collect PDPM data on their OBRA assessments since October 2021 to help them develop PDPM-based Medicaid payment systems, not all states that currently use RUG-based payments have done so.

This September, CMS issued a memo to all State Medicaid Directors indicating that they mean business: RUG-III and RUG-IV will no longer be supported on federally required MDSs. States will need to decide whether to transition to a PDPM-based payment system – or come up with another way to determine payment for their Medicaid nursing facility residents.

How to Prep for Changes Ahead

No matter what your state decides to do with its Medicaid system, MDS Coordinators and interdisciplinary teams will need to prepare well in advance. This is a major change to a system that your teams have been used to for years. Our recommendation: Be proactive!

October 1 always seems to arrive more quickly than we think.  Here’s what providers should do sooner rather than later:

  • Go to the source.  Find out from your state what their plan is as soon as possible. Some states have already started – Texas, for example, announced on October 12 that beginning this November 1 they will begin to collect Section GG data on their state OBRA assessments. If you haven’t already, sign up for your state’s email list so you will be alerted when they announce their plan.
  • Also contact your Electronic Health Record (EHR) vendor to find out if they have received notice of your state’s plans.  Your vendor may also have information on their website customer support portal or in regular blog posts and e-newsletters (just like PointRight does!).

Proactive Planning Starts Now

Since PDPM has many more moving parts that will affect your Medicaid rates, accuracy is especially important.  Make sure you develop processes to collect PDPM related documentation on your long-term residents, and practice ahead of time in the following areas:

  • Section GG: Your CNAs and other direct care staff over all shifts will need to get accustomed to capturing the resident’s usual performance for the 3 days ending with the Assessment Reference Date. TIP: If you’ve been relying on your therapists to complete the Section GG assessment for your Medicare skilled residents, this process won’t work for your long-stay residents.
  • Sections I & J: Begin to discuss with your physicians, NPs, and PAs about each long-stay resident’s primary medical condition as well as any recent surgeries that you’re providing care for.
  • Remember that restorative nursing programs play a role in PDPM as they do in RUGs. This may be a great opportunity to take fresh look at restorative for your long-stay residents, and get a renewed program in place.

The key take-away: Don’t delay!  Proactive planning saves time and stress next October.

On a State-by-State Basis

 If you are in a state that doesn’t currently use a RUG-based case mix system for Medicaid, don’t automatically assume you’re off the hook.  Your state just might decide to begin analyzing PDPM data anyway if their plan is to eventually transition to an MDS-based case mix system.  

Find out what your state’s plan is just in case!

Don’t delay – next October will be here before you know it!

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