What is the rug payment system?

What is a RUGs payment system?

RUG-IV is a patient classification system for skilled nursing patients used by the federal government to determine reimbursement levels. … Payment is determined by categorizing patients into groups based on their care and resource needs. This system primarily determines payment by the number of therapy minutes.

What does rug mean in Medicare?

Resource Utilization Groups, or RUGs, flow from the Minimum Data Set (MDS) and drive Medicare reimbursement to nursing homes under the Prospective Payment System (PPS). A resident is initially assigned to one of the seven major categories of RUGs based on their clinical characteristics and functional abilities.

What is the rug classification system?

RUG-III first tests whether a SNF resident qualifies for each of the seven major categories: (1) rehabilitation, (2) extensive services, (3) special care, (4) clinically complex, (5) impaired cognition, (6) behavior problems, and (7) reduced physical function.

What is Rug rate for Medicare?

The base rate for nontherapy RUGs is $16 and covers, for example, SNFs’ costs for evaluating beneficiaries to determine whether they need therapy.

What does RUGs stand for?

RUG stands for “Resource Utilization Group”. RUGs are significant because they are the core of the SNF payment system under Medicare Part A since July 1, 1998, and have been modified several times. At present, SNFs are paid under the RUG-III system, which has 53 categories.

What are rug codes?


  • Rehabilitation Plus Extensive Services:
  • Rehabilitation:
  • Extensive Services:
  • Special Care Low:
  • Clinically Complex:
  • Behavioral Symptoms and Cognitive Performance:
  • Reduced Physical Function:
  • Default:

What are rug scores?

The RUG score shows the type and quantity of care required for each individual resident. RUG scores consist primarily of the levels of occupational, physical and speech therapy a patient receives along with the intensity of nursing services the patient requires.

What replaced rug levels?

New Medicare Payment Model, PDPM, Proposes to Replace RUGs System for SNFs. On April 27, 2018, the Centers for Medicare and Medicaid Services (CMS) announced a proposal to replace the Resource Utilization Groups (RUGs) payment system with a new model for Medicare payment of skilled nursing care.

What does rug certification mean?

Course Description:

Resource Utilization Groups better known a RUGs has become the most popular resource tool for determining reimbursement levels for skilled nursing facility residents. This vital component is essential for long-term care success in maximizing quality of care.

What is Skilled Nursing Facility Prospective Payment System?

The Balanced Budget Act of 1997 mandates the implementation of a per diem prospective payment system (PPS) for skilled nursing facilities (SNFs) covering all costs (routine, ancillary and capital) related to the services furnished to beneficiaries under Part A of the Medicare program.

What is PDPM reimbursement?

The Patient-Driven Payment Model (PDPM) is the proposed new Medicare payment rule for skilled nursing facilities. It is intended to replace the current RUG-IV system with a completely new way of calculating reimbursement.

What is Medicare case mix index?

The Case Mix Index (CMI) is the average relative DRG weight of a hospital’s inpatient discharges, calculated by summing the Medicare Severity-Diagnosis Related Group (MS-DRG) weight for each discharge and dividing the total by the number of discharges.

How is SNF reimbursed?

Currently, a SNF receives a base rate (known as a per diem) and receives additional reimbursement based on the number of therapy minutes and/or nursing services provided to a patient. This payment system may incentivize some providers or agencies to provide medically unnecessary care.

How are per diem rates for SNF PPS patients determined?

Per diem rates for SNF PPS patients are determined for various cases by using the RUG classification system. This system uses the nursing component, therapy component, and noncase-mix-adjusted component to drive the rates.

How many rug levels are there?

There are seven major RUG categories: Rehabilitation, Extensive Services, Special Care, Clinically Complex, Impaired Cognition, Behavior Problems, and Reduced Physical Function.

What does rug stand for Intel?

The benchmarks used by Intel fell into two categories: synthetic third-party benchmarks, like PCMark and Cinebench, and ones designed to represent real-world conditions. The latter tests were Intel’s own so-called representative usage guides, aka RUGs, and were not devised by an independent third party.

In which type of claim do we find rug code?

Non-skilled Nursing Home stays and Hospice room and board services, RUG pricing will be applied to claims billed with Procedure Code T2046 (Hospice Long Term Care, Room And Board Only, Per Diem). Hospice room and board claims will continue to reimburse at 95% of the calculated per diem.

What is Revenue code 658?

658. Hospice Room &amp, Board — Nursing Facility. 659. Other Hospice. Revenue.

How do you calculate PDPM?

The ABILITY CAREWATCH PDPM calculator uses the payment for each component and is calculated by multiplying the case-mix index (CMI) that corresponds to the patient’s case-mix group (CMG) by the wage adjusted component base payment rate, then by the specific day in the variable per diem adjustment schedule when …

How many major categories are in the rug IV classification system?

You would work through all of the 48 classification groups, noting each classification for which the resident qualifies.

What did PDPM replace?

The PDPM replaces the Resource Utilization Groups (RUG) system, which had been used since 1998 and which many believe created perverse incentives that contributed to rapid growth and unwarranted variation in Medicare spending on postacute care.

Which are the 4 late loss ADLs which impact the rug for MDS?

The four late loss ADLs are bed mobility, transfers, eating and toilet use. A resident may lose the ability to dress himself or walk, but may still have the ability to turn in bed, get out of a chair, feed himself and/or assist with using the toilet.

What are the 6 components of PDPM?

In the PDPM, there are five case-mix adjusted components: Physical Therapy (PT), Occupational Therapy (OT), Speech-Language Pathology (SLP), Non-Therapy Ancillary (NTA), and Nursing. Each resident is to be classified into one and only one group for each of the five case-mix adjusted components.

Which system is used to bill for services delivered skilled nursing facility?

The SNF Prospective Payment System (PPS) pays for all SNF Part A inpatient services. Part A payment is primarily based on the Resource Utilization Group (RUG) assigned to the beneficiary following required Minimum Data Set (MDS) 3.0 assessments.

What is the PDPM 5 day assessment?

The 5-day Assessment will pay for all covered Part A days until the Part A discharge (except in cases when an IPA is completed). The IPA will pay for all days from the Assessment Reference Date of the IPA through the part A discharge (unless another IPA assessment is completed).

What does PPS stand for in MDS?

Learn about these Medicare-required Skilled Nursing Facility Prospective Payment System (SNF PPS) assessments topics: Minimum Data Set (MDS) 3.0 background.

Does the MDS determine reimbursement?

In a case mix adjusted payment system the amount of reimbursement to the nursing facility is based on the resource intensity of the resident as measured by items on the MDS.

What is a good CMI score?

The average CMI of all 25 hospitals is 3.48, though CMIs range from 3.02 to 5.26. This is a shift up from the last reporting period, which ranged from 2.75 to 4.88. CMI does not appear to correlate to the number of annual discharges, with discharges from the top 10 hospitals ranging from 5,531 to 87 annually.

Is it better to have a high or low CMI?

This measure reflects the diversity, complexity, and severity of patient illnesses treated at a given hospital or other healthcare facility. Higher case mix index values indicate that a hospital has treated a greater number of complex, resource-intensive patients, and the hospital will be reimbursed at a higher rate.

How is CMI calculated example?

For example, if Hospital A has an average cost per patient of $1,000 and a CMI of 0.80 for a given year, their adjusted cost per patient is $1,000 / 0.80 = $1,250. Likewise, if Hospital B has an average cost per patient of $1,500 and a CMI of 1.25, their adjusted cost per patient is $1,500 / 1.25 = $1,200.

What does PDPM mean for nurses?

Overview. In July 2018, CMS finalized a new case-mix classification model, the Patient Driven Payment Model (PDPM), that, effective beginning October 1, 2019, will be used under the Skilled Nursing Facility (SNF) Prospective Payment System (PPS) for classifying SNF patients in a covered Part A stay.

Why are prospective payment systems different?

Although the PPS payment system may sound somewhat like a health maintenance organization (HMO), there are differences. Instead of a monthly payment amount for all services, like an HMO provides, PPS provides the healthcare facility with a single predetermined payment for each Medicare patient.

What are the five patient level adjustments in the IPF PPS?

Describe at least two patient level adjustments for IPF PPS claims and explain why they are used. Patient-level adjustments include: length of stay, MS-DRG adjustment, comorbid conditions, age, and electroconvulsive therapy.

What is clinically complex?

The term “medically complex” is a vague umbrella term used to describe a wide range of medical conditions that present unique challenges and require special care on an ongoing basis.

What is the Resource Utilization Group system?

Resource utilization groups” or “RUG” means the system for grouping a nursing facility’s residents according to their clinical and functional status identified in data supplied by the facility’s minimum data set.