Patient Driven Payment Methodology (PDPM)

On October 1, 2019, the Centers for Medicare and Medicaid Services replaced the Resource Utilization Group (RUG)-based resident classification system with the Patient Driven Payment Model (PDPM) for Medicare.  In doing so, the PDPM increased the number of components with acuity adjustment from two to five, and based therapy payments on the expected needs of residents as opposed to the actual minutes of therapy provided. 

PDPM Use for Medicaid Programs

Of the five PDPM acuity components, the Department of Community Health is implementing only one, the nursing component.  The nursing component measures the estimated nursing resource (RN/LPN/CNA) needs a resident may have based on their presenting conditions and functional status. This component very closely aligns with the costs in the current nursing facility reimbursement methodology that are adjusted by acuity. 

The Department is not considering the other four acuity adjusted components --Physical Therapy (PT), Occupational Therapy (OT), Speech Language Pathology (SLP), and Non-Therapy Ancillary (NTA) -- for the following reasons:

  • Therapies (PT/OT/SLP)
    • Therapy services are primarily reimbursed outside of the Medicaid nursing facility inpatient per diem.  These expenditures are covered and paid by Medicare Part B or other third-party payers.
  • NTA Component
    • The NTA costs are primarily reimbursed outside of the Medicaid nursing facility inpatient per diem. These expenditures are covered and paid by Medicare part D (Drugs), the Medicaid pharmacy benefit, or reimbursement separately through the Medicaid fee schedule (laboratory/radiology services). 

Timeline for PDPM implementation

The Department will transition to PDPM on July 1, 2024.  Providers will receive a "Shadow" Rate Sheet for demonstration purposes only beginning July 1, 2023.

Please see the chart below detailing the quarterly data utilized for each reimbursement calculation.

Rates Effective CMI Data PDPM Data Comments
7/1/2023 3/31/2023 N/A  
10/1/2023 6/30/2023 N/A  
1/1/2024 9/30/2023 N/A CMS will no longer support RUG data effective 10/01/2023.
4/1/2024 N/A N/A Continue to reimburse at the 1/1/2024 Rate.
7/1/2024 N/A 3/31/2024 State reimbursing using PDPM.

PDPM Presentation

During the Georgia Healthcare Association 2023 Summer Convention  the Department presented the attached power point presentation for your reference:

Shadow Rates

In advance of that effective date, the Department has attached shadow rates of the PDPM rates that are not effective and will not be entered into the Georgia Medicaid Management Information System (MMIS).  The PDPM calculation in the shadow rates should be used to assist providers in determining how the transition to PDPM will impact their reimbursement rates

Comparison of Resource Utilization Group (RUG) – III 34 Group Resident Classification System To PDPM