CMS Drops Surprise Draft of MDS 3.0, Dropping Section G of Skilled Nursing Data

Well ahead of the expected publication, the Centers for Medicare and Medicaid Services (CMS) posted a draft of updated Minimum Data Set specifications (MDS 3.0) last Friday. The comprehensive item set version 1.18.11 is expected to radically transform the future of nursing home reimbursements by states.

CMS said that the final version of the MDS 3.0 patient assessment tool will be released before the end of the year and that changes will go into effect beginning October 1, 2023. These long-awaited changes to the MDS were postponed in 2020 due to the COVID-19 pandemic, but CMS announced earlier this year that the implementation of changes were back on track.

Most notably is the elimination of a reimbursement rate calculator known as “Section G.” Section G is currently used in the calculation of quality measures, including those related to function for short stay patients and percent of residents whose ability to move independently worsened for long stay patients. According to McKnights the question now will be how to make a shift from nurse aid documentation of late life Activities of Daily Living (ADL) metrics.

Leah Klusch, executive director of the Alliance Training Center said that most difficult part of the announcement will come in the form of training and supporting documentation and analysis.

This is enormous. Getting it earlier is better. I think we now have probably 65% to 70% of what we need. We know what we’ll have to code, we have the end game. Now we have to figure out how we adapt it, and our record keeping and data formulation. That’s the toughest part.

The Section G changes are expected to have a major impact on the way that nursing homes receive state-level reimbursement. The transition to the Patient Driven Payment Model (PDPM) made the section unnecessary from a Medicare reimbursement perspective, but it has been retained thus far so that some states can calculate Resource Utilization Group (RUG) scores, according to Skilled Nursing News. From Joel VanEaton, executive vice president of PAC Regulatory Affairs and Education at Broad River Rehab in North Carolina:

The states are going to have to do something radical. They’re either going to have to figure out a way to incorporate CMI (case mix index) out of PDPM into their Medicaid direct care portion of their rates — or however they do that in their state — or they’re going to have to require the optional state assessment.

The Minimum Data Set (MDS) 3.0 Resident Assessment Instrument Manual draft can be found at CMS.