Navigating the Shift: From RUG to PDPM LTC in Texas Nursing Facilities

Remember the days of chasing therapy minutes to achieve the right RUG score? The landscape of nursing facility reimbursement is about to undergo a significant transformation. As MDS nurses in Texas, you’re on the brink of a major shift with the new PDPM LTC model. Trust me, it’s a big one.

Having spent over 36 years in this field, I’ve seen the flaws of the RUG system firsthand. It often felt like we were more focused on numbers than on the individuals in our care. The PDPM LTC represents a substantial step forward, but it will require a complete shift in our approach.

What’s Changing?

Effective September 1, 2025, Texas will implement a new payment methodology for nursing facilities under Medicaid, known as the Patient Driven Payment Model for Long-Term Care (PDPM LTC). This marks a significant departure from the previous Resource Utilization Group (RUG) system. Here’s what MDS nurses need to know:

The Shift to PDPM LTC

The PDPM LTC methodology is modeled after the system used for Medicare skilled nursing facilities (SNFs). It aims to align payments more closely with the actual costs of care, especially for residents with complex conditions and cognitive impairments.

 Key Components:
Nursing Component
Non-Therapy Ancillary (NTA) Component
Non-Case-Mix Component (covers dietary and administrative services)

Understanding the New Rate Structure

According to Rule §355.320, the new reimbursement rates for nursing facilities will vary based on the assessed characteristics of Medicaid recipients using MDS assessment data. Residents will be classified into different groups based on nursing care needs, NTA requirements, and cognitive impairment, which will determine their Case-Mix Index (CMI).

Focus Areas for MDS Nurses

1. MDS Data is Key: The Minimum Data Set (MDS) assessment remains the primary tool for gathering information to determine a resident’s reimbursement rate. Accurate data collection is crucial for assigning the correct CMI for nursing and NTA components.

2. No More RUG:For MDS assessments with an Assessment Reference Date (ARD) on or after September 1, 2025, RUG levels will no longer be calculated. All reimbursement will be based on the PDPM LTC methodology.

3. Impact of MDS Coding on Reimbursement:
– Cognitive Status: A resident’s cognitive impairment, as determined by the Brief Interview for Mental Status (BIMS) score, can result in an add-on.
– Clinical Conditions and Diagnoses: Accurate coding of diagnoses is emphasized, with enhanced rates for residents with conditions like HIV/AIDS.
– Non-Therapy Ancillaries (NTA): Payment is based on a resident’s use of certain ancillary services. Accurate coding is essential for proper reimbursement.

**Additional Add-On Rates**

– Professional and General Liability Insurance: Facilities with acceptable insurance coverage may receive an add-on payment.
– HIV/AIDS Diagnosis: Triggers an enhanced daily rate.

The transition from RUG to PDPM LTC is a significant change, making accurate MDS coding more critical than ever for ensuring proper reimbursement. For the most up-to-date information, consult the Texas Health and Human Services Commission (HHSC) Provider Finance Department and the Texas Medicaid & Healthcare Partnership (TMHP).

This new model is just the beginning. To stay ahead in our evolving field, ongoing learning is essential. My membership is designed to be your go-to resource for these critical changes, providing the one-on-one support you need. Click here to secure your spot and invest in your future as an MDS nurse.

All the best,

Maria Messina, RN
Founder, Skilled Nursing Support

**Sources:**

Reimbursement Setting Methodology for Nursing Facilities on or after September 1, 2025
See Payment Rates
Add-on Information

**Disclaimer:**
This content is for informational purposes only and is not intended as legal or regulatory advice. The information provided is accurate to the best of our knowledge at the time of publication but may not reflect all recent changes. Please consult with a qualified legal or professional advisor for specific guidance on your situation.

**Skilled Nursing Support / Released August 2025 / maria.messina@skillednursingsupport.com**