Purpose

• Modernize and reorganize policies related to aging and disability services, health care settings, and behavioral health. The bill aims to recodify several statutory provisions, update terminology, and align payment and assessment practices for nursing facilities with federal standards. It also sets groundwork for notifying federal authorities about approvals and makes conforming changes across many statutes.

What the bill changes or adds (main provisions)

• Key definitions for nursing facility payment and assessment:
  • Creates and/or revises definitions used to determine how nursing facility care is assessed and paid.
  • ARD (Assessment Reference Date): Defines the end point for lookback periods in the MDS assessment process.
  • MDS (Minimum Data Set): Defines the standard assessment elements used to judge resident status and need.
  • ADL (Activities of Daily Living): Lists activities such as hygiene, dressing, bathing, transferring, mobility, eating, and toileting.
  • Case mix index: The weighting used to classify residents for payment purposes.
  • Index maximization: How to choose the highest possible case mix category when a resident could fit more than one.
  • Nursing facility level of care determination: Process to decide a resident’s care level for payment purposes.
  • PDPM (Patient Driven Payment Model): A new payment classification system for nursing facilities, based on the resident’s condition, diagnosis, and care at the time of the MDS with an ARD on or after October 1, 2025.
  • RUG (Resource Utilization Group): The existing case mix system for residents with an ARD on or before September 30, 2025.
• Transition in payment systems:
  • The bill sets a transition from the existing RUG-based payment framework to the PDPM framework, with PDPM applying to ARDs on or after October 1, 2025, and RUG applying to ARDs up to September 30, 2025.
• Recodification and conforming changes:
  • Reorganizes and updates statutory language across aging and disability services, health care policy, and behavioral health provisions.
  • Includes codification changes related to assertive community treatment and intensive residential treatment services.
  • Updates terminology in children’s mental health and requires conformity with federal approval processes.
  • Adds or adjusts subdivisions and cross-references in numerous statutes to support the new definitions and payment framework.
• Implementation and oversight:
  • Requires notification of federal approval for the changes.
  • Establishes conformance requirements across multiple state departments (e.g., Health, Direct Care and Treatment, DHS Office of Inspector General).
• Scope of changes:
  • While the excerpt focuses on Article 1 (Aging and Disability Services) definitions, the bill signals broader policy reforms affecting aging and disability programs, behavioral health services, and related regulatory oversight.

How this would affect programs and care

• Nursing facility payment and planning:
  • Facilities will base reimbursements on PDPM for ARDs after October 1, 2025, which may shift how residents are classified and paid, compared with the prior RUG system.
• Assessment processes:
  • Standardized use of MDS assessments and ARD lookback periods will guide care planning and funding.
• Policy language and terminology:
  • Updates to terms used in children’s mental health and other areas could change program descriptions, reporting, and communication with families and providers.
• Administrative changes:
  • Agencies will need to align with new definitions, notification requirements, and cross-cutting statutory changes to implement the reforms.

Timeline and transitional notes

• Effective transition date for PDPM: ARD on or after October 1, 2025.
• PDPM vs. RUG split date: PDPM for ARDs after Oct 1, 2025; RUG remains applicable for ARDs on or before Sept 30, 2025.
• Ongoing updates to statute references and cross-refs are anticipated as the bill fully moves into effect.

Notable shifts in terminology and framework

• Emphasis on “Assessment Reference Date” (ARD) and “Minimum Data Set” (MDS) as core anchors for evaluating resident needs and payment.
• Transition from “Resource Utilization Group” (RUG) to “Patient Driven Payment Model” (PDPM) for nursing facility reimbursement.
• Use of “case mix index” and “index maximization” to determine appropriate payment categories.
• Inclusion of updated language around children’s mental health and accountability for federal approval.

Relevant Terms - ARD (Assessment Reference Date) - MDS (Minimum Data Set) - ADL (Activities of Daily Living) - Case mix index - Index maximization - Nursing facility level of care determination - PDPM (Patient Driven Payment Model) - RUG (Resource Utilization Group) - Assertive community treatment - Intensive residential treatment services - Children’s mental health terminology - Federal approval notification - Aging and disability services - Department of Health, Direct Care and Treatment - Department of Human Services, Office of Inspector General