Information and resources on Medicare payment and policies in Skilled Nursing Facilities (SNFs). If you have questions about this information, contact firstname.lastname@example.org.
New SNF PPS Payment Methodology: Patient-Driven Payment Model (PDPM)
On August 8, 2018, CMS published its final 2019 prospective payment system (PPS) for skilled nursing facilities (SNFs), which outlines the agency's plans to replace the existing SNF case-mix methodology, known as Resource Utilization Groups Version IV (RUG-IV), with an entirely new system called the Patient-Driven Payment Model (PDPM). CMS believes the new model will save money and improve care by reducing administrative burden and tying payment to patient conditions rather than services provided.
Under the PDPM, payments will be based on a resident's classification among 5 components—physical therapy, occupational therapy, speech-language pathology, nursing, and "non-therapy ancillary services," a category mostly related to drugs and medical supplies. Payment will be calculated by multiplying the case-mix index for the resident's group with each component, first by a base payment rate and then by days of service received. The payment calculations for each component will then be added together to create a resident's total per diem rate.
For more information, see the CMS fact sheet on the final rule or APTA's fact sheet on the final rule posted below.