Pennsylvania’s Medicaid program is undergoing its most significant transformation in over a decade. Beginning August 2, 2025, the state will transition from the RUG-III version 5.12 case mix system to the Patient Driven Payment Model (PDPM) Nursing Clinical Category case mix. This shift will directly impact reimbursement rates for skilled nursing facilities (SNFs), making accurate documentation and strategic assessment practices more critical than ever.

Understanding the Transition Timeline

The transition will be phased in over a one-year period, blending RUG-III and PDPM data to calculate reimbursement:

Picture Date    RUG-III %    PDPM %

• Nov 2025    75%    25%

• Feb 2026    50%    50%

• May 2026    25%    75%

• Aug 2026    0%    100%

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Facilities that fail to prepare adequately may find themselves locked into reduced reimbursement levels for the 2026 calendar year. Unlike the 2009 transition, providers will not receive individualized “Shadow Rate” letters, making proactive planning essential.
The PDPM Nursing Clinical Categories
PDPM introduces six nursing categories, each with specific clinical and functional criteria:

 

1. Extensive Services – Includes isolation, tracheostomy care, and ventilator use.

2. Special Care High – Conditions like septicemia, diabetes with insulin regimen changes, and respiratory therapy.

3. Special Care Low – Includes pressure ulcers, feeding tubes, and chronic neurological conditions.

4. Clinically Complex – Covers pneumonia, surgical wounds, and IV medications.

5. Behavioral Symptoms & Cognitive Performance – Based on BIMS scores and behavioral indicators.

6. Reduced Physical Function – For residents not meeting criteria in other categories.

 

Each category is influenced by the resident’s Functional Abilities score, which plays a pivotal role in determining the Case Mix Index (CMI).
Documentation Strategies for Success
Accurate documentation is the cornerstone of successful PDPM implementation. Key strategies include:

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• Functional Abilities Coding: Even a one-point error can result in significant CMI loss. For example, misclassifying a score of 4 instead of 3 can reduce reimbursement by up to 0.90 CMI in Special Care High.

• Service Capture Timing: Aligning the Assessment Reference Date (ARD) with service delivery (e.g., IV therapy, respiratory treatments) ensures optimal reimbursement.

• Physician Orders: Use specific language to support coding for isolation or shortness of breath while lying flat.

• Restorative Nursing Programs: Implementing two or more programs can increase CMI by 0.04 to 0.10, especially for residents not receiving therapy.

• Clinical Tools and Considerations

• PHQ-9: A validated tool for assessing depression, which can influence category placement.

• BIMS: Scores ≤9 suggest cognitive impairment, impacting Behavioral and Cognitive categories.

• Section I6200: Over 30 chronic respiratory conditions qualify; documentation must reflect current diagnoses and symptoms.

 

Financial Implications

 

The financial impact of documentation accuracy is substantial:

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• ADL Accuracy: Misclassification can result in CMI losses of 0.48 to 0.90.

• Depression Coding: Proper documentation can increase CMI by 0.15.

• Restorative Nursing: Strategic implementation can yield incremental gains in reimbursement.

 

Best Practices for Implementation

 

• Morning Meetings: Use interdisciplinary huddles to identify new diagnoses, behaviors, or service needs.

• Electronic Health Records: Leverage User-Defined Assessments and Point of Care reports to streamline documentation.

• Staff Education: Train aides and nurses on PDPM terminology, documentation standards, and service capture techniques.

 

The transition to PDPM represents both a challenge and an opportunity for Pennsylvania SNFs. By prioritizing documentation accuracy, aligning assessments with clinical services, and educating staff, providers can ensure appropriate reimbursement and improved resident outcomes.

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