What describes the difference in target setting between SNF PPS and IPPS?

• A. SNF PPS pays per visit with DRG-based classification.
• B. SNF PPS pays per day with RUG-based classification; IPPS pays per discharge with DRG-based classification.
• C. Both pay per discharge with DRG-based classification.
• D. IPPS pays per day with RUG-based classification.

Answer: (B)

The main idea is how the payment amount is determined—daily versus per admission and which classification drives the rate. In SNF PPS, payments are made per day (per diem) and are driven by the resident’s resource utilization group (RUG), which reflects daily care needs and therapy intensity. Because needs can change from day to day, the rate can vary across days as the RUG category shifts. In contrast, IPPS uses a fixed amount per hospitalization discharge, with DRG-based classification grouping stays by similar resource use and clinical characteristics to set the payment for that entire stay. So the statement that SNF PPS pays per day with RUG-based classification and IPPS pays per discharge with DRG-based classification captures the true difference in how target payments are set.