SF4728

Purpose

Clarify how a person’s nursing facility level of care will affect payment for certain home- and community-based waiver services, by changing the way cases are classified for payment and which payment model is used based on when the assessment date occurs.

Main provisions

• The bill adds new definitions to the nursing facility level of care determination process. These definitions explain terms used to determine payment for long-term care and related waiver services.
• It creates a split in the payment method based on the Assessment Reference Date (ARD):
  • For ARD on or after October 1, 2025, payments use the Patient Driven Payment Model (PDPM), a case-mix reimbursement system.
  • For ARD on or before September 30, 2025, payments use the traditional Resource Utilization Group (RUG) system.
• The PDPM and RUG classifications apply to payments for:
  • Nursing facility services under state medical assistance (MA) rules (chapter 256R)
  • Elderly waiver services under chapter 256S
  • CADI and BI waiver services under section 256B.49
  • State payment of alternative care services under section 256B.0913
• The bill defines core terms used in the funding and assessment process, such as MDS (Minimum Data Set), ARD, ADL (Activities of Daily Living), and what constitutes a “nursing facility level of care determination.”

Significant changes to existing law

• Shifts the payment model from RUG (existing for ARD on/before Sept. 30, 2025) to PDPM (new for ARD on/after Oct. 1, 2025) for the specified long-term care and HCBS waiver services.
• Explicitly ties the nursing facility level of care determination to these payments, with the ARD date acting as the cutoff between the two reimbursement systems.
• Introduces standardized definitions (ARD, MDS, ADL, case mix index, index maximization, PDPM, RUG) to support the updated payment framework and ensure consistent classification for eligibility and funding.

How this affects program operations

• Agencies and facilities will need to prepare for PDPM-based payments starting October 1, 2025, while continuing to use RUG-based payments for ARD dates prior to that.
• The changes affect how case mix is calculated and interpreted for the broader spectrum of long-term care funding tied to waivers and alternative care programs.

Definitions added or clarified (key terms)

• Assessment Reference Date (ARD)
• Case mix index
• Index maximization
• Minimum Data Set (MDS)
• Representative
• Activities of Daily Living (ADL)
• Nursing facility level of care determination
• Patient Driven Payment Model (PDPM)
• Resource Utilization Group (RUG)

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Relevant Terms ARD MDS ADL Nursing facility level of care determination PDPM RUG Case mix index Index maximization Elderly waiver (256S) CADI waiver (256B.49) BI waiver (256B.49) 256R (nursing facility MA payments) 256S (elderly waiver) 256B.49 (CADI/BI waivers) 256B.0913 (state payment of alternative care)