August 15, 2019
Change in methodology for CMS PDPM

Applicable to: Mercy Care Advantage 

Beginning October 1, 2019, Mercy Care will pay Mercy Care Advantage skilled nursing facility claims in accordance with the new CMS Patient Driven Payment Model (PDPM). This new payment model will replace the current case-mix classification system, the Resource Utilization Group, Version IV (RUG-IV). The PDPM is a new case-mix classification system for classifying skilled nursing facility (SNF) patients in a Medicare Part A covered stay into payment groups under the SNF Prospective Payment System.

Under RUG-IV, most patients are classified into a therapy payment group, which uses primarily the volume of therapy services provided to the patient as the basis for payment classification. This creates an incentive for SNF providers to furnish therapy to SNF patients regardless of the patient’s unique characteristics, goals, or needs. PDPM eliminates this incentive and improves the overall accuracy and appropriateness of SNF payments by classifying patients into payment groups based on specific, data-driven patient characteristics, while simultaneously reducing administrative burden on SNF providers.

You can locate additional information and a helpful FAQ about the Patient Driven Payment Model on CMS website at:

As always, don't hesitate to contact your Mercy Care Provider Relations Representative with any questions or comments. You can find this notice and all other provider notices on our Mercy Care website.

Thanks for all you do!