In October 2019, Medicare changed the method that it uses to classify patients in a covered Medicare Part A skilled nursing facility (SNF) stay from Resource Utilization Groups Version IV (RUG-IV) to the Patient-Driven Payment Model (PDPM). Many states currently use a RUG-based payment methodology for Medicaid-covered nursing facility stays, and so this change is prompting states to assess whether they should change their methods of determining patient acuity for Medicaid payment.
To inform discussion about the implications of using PDPM for Medicaid-covered stays, MACPAC contracted with Abt Associates to examine the case-mix weights for Medicaid residents under both RUG-IV and PDPM and how they compare to case-mix weights for Medicare residents in 2019. This contractor report summarizes the findings from this analysis, which were discussed at the October 2020 MACPAC public meeting.
The researchers find that the current PDPM system is not a good measure of predicting care needs for Medicaid patients. This suggests that it cannot easily be applied to Medicaid-covered nursing facility stays. Further analysis will be required to assess whether some of the components of the PDPM can be used for Medicaid payment and to examine how particular types of nursing facilities may be affected by changes to acuity adjustment methods.