How are Skilled Nursing Facility (SNF) PPS payments determined?

• A. Fixed per-episode payments independent of patient needs.
• B. Per diem rates adjusted for case-mix using MDS-based assessments and RUGs to reflect patient needs.
• C. Per-visit only with no case-mix.
• D. DRG-based per-discharge payments.

Answer: (B)

Skilled Nursing Facility payments are set on a per-day basis and adjust for how much care a resident actually needs. The daily rate is adjusted by case-mix, using data from the resident’s MDS assessment to place them into a Resource Utilization Group (RUG). Each RUG represents a level of resource use (nursing care, therapy hours, activities of daily living needs, etc.), so residents with higher needs fall into higher-paying RUGs and generate higher per-day payments. The total stay payment is this per-day rate times the number of days in the facility, with potential additional adjustments. This approach contrasts with fixed payments per episode, per-visit charges, or DRG-based hospital payments.