Medicaid Case Mix Index Under PDPM: What LTC Facilities Need to Know
As of October 1, 2025, the nationwide transition away from RUG-based Medicaid systems marks a major shift for long-term care. With more states moving to PDPM-based methodologies—and many adopting Nursing Component–only CMI calculations—facilities are navigating a very different landscape.
The shift brings new opportunities, improved accuracy in capturing resident acuity, and a stronger emphasis on clinical documentation as compared to legacy case-mix models. But it also means facilities must elevate MDS processes to ensure Medicaid CMI truly reflects the medical, cognitive, and behavioral needs of their residents. Let’s break down the current environment with key strategies facilities should focus on right now.
The New Standard: PDPM-Based Medicaid CMI
In the post-RUG era, many states now calculate Medicaid CMI using:
- The PDPM Nursing Component only, or
- A PDPM-based blended methodology with Nursing weighted heavily
This makes nursing acuity captured through the MDS the central driver of Medicaid reimbursement.
The PDPM Nursing Component is structured into groups such as Extensive Services, Special Care High, Special Care Low, Clinically Complex, Behavior Symptoms & Cognitive Performance, and Reduced Physical Function, based on combinations of clinical conditions, services, behaviors, depression status, and a GG-based nursing function score.
Key inputs include:
- Extensive services (e.g., tracheostomy care, ventilator, isolation, certain IV services)
- Behavioral symptoms
- Cognitive patterns
- Depression end-splits
- Functional status via Section GG (nursing function score 0–16)
- Specified clinical conditions and treatments
- Infection-related needs
Bottom line: Your MDS accuracy and nursing documentation directly determine your Medicaid Case Mix Index.
Why States Prefer the PDPM Nursing Component
Many Medicaid programs are aligning with the PDPM Nursing framework because it:
- Reflects the needs of long-term stay populations-Medicaid residents present with higher nursing, behavioral, and medical complexity that fits the PDPM nursing group structure.
- Improves consistency–Standardized PDPM logic produces more consistent, reproducible acuity scoring across facilities and over time.
- Aligns reimbursement with clinical needs–Residents with extensive services, complex comorbidities, significant functional decline, or behavioral/cognitive needs are more accurately placed into higher-acuity nursing groups.
- Reinforces the importance of accurate MDS processes–Facilities must prove acuity through assessment and documentation—not assumptions.
What Helps Improve Medicaid CMI Under PDPM Nursing
In a nursing-driven CMI environment, facilities must focus on capturing clinical complexity accurately and consistently. These are the highest-impact opportunities to strengthen Medicaid CMI.
- Strong Admission Huddles
The first 72 hours of the stay are crucial for PDPM classification.
Effective admission huddles should verify and clarify:
- Active diagnoses (including those driving PDPM nursing categorization)
- Indicators of extensive services (e.g., oxygen, suctioning, trach, ventilator, isolation)
- Infection indicators
- Behavioral symptoms
- Skilled nursing services required
- Respiratory needs and supports
- Swallowing or nutritional concerns (e.g., tube feeding criteria)
- Recent surgical procedures and wound status
- Cognitive status (BIMS or staff assessment)
Remember, anything that’s missed at admission is often lost for the entire assessment period.
- Accurate Documentation of Extensive Services
Extensive services are heavily weighted in PDPM Nursing and are key to the highest acuity groups.
Examples include:
- Tracheostomy care
- Ventilator/respirator use
- Infection isolation
- Daily respiratory therapy
- Parenteral/IV feedings meeting PDPM criteria
- IV medications or transfusions while a resident
- Certain high-intensity treatments (e.g., dialysis, chemo, radiation)
These must be supported by:
- Physician orders
- Nursing and treatment notes
- Clear dates, frequency, and rationale
- Behavioral and Cognitive Capture
Behavior and cognition drive specific PDPM nursing groups focused on behavior symptoms and cognitive performance.
Facilities should ensure:
- Accurate BIMS or staff assessment when BIMS isn’t possible
- Documentation of behaviors such as wandering, rejection of care, physical and verbal behaviors, and other behavioral symptoms across four or more days when present
- Correct coding of hallucinations and delusions
- ICD-10 codes matching dementia and mental health diagnoses
Behavioral needs significantly influence both acuity and care expectations.
- Infection Identification and Coding
Infections and infection-related services influence PDPM Nursing and, in some models, intersect with NTA-type logic when states adapt PDPM frameworks.
Key focus areas:
- Pneumonia
- Septicemia
- Wound infections
- MDROs
- Other active infections supported by documentation
Accurate nursing notes, vital sign trends, labs, and treatment records (e.g., antibiotics, monitoring) are essential to support coding.
- Depression and Mood Indicators
Depression can split PDPM Nursing groups into higher “depressed” categories when criteria are met (e.g., D0160 or D0600 severity scores ≥ certain thresholds).
To support this:
- Complete the PHQ 2-9 accurately
- Ensure a corresponding diagnosis is present when appropriate
- Reflect treatment (medications and non-pharmacological interventions) in the record
Consistency between the mood interview, diagnosis, and plan of care is critical.
- Section GG Accuracy for Functional Acuity
Section GG items are used to calculate a nursing function score, which directly influences group assignment (e.g., different splits at function scores 0–5, 6–14, 15–16 in several categories).
Key GG items for nursing function include:
- Eating
- Toileting hygiene
- Bed mobility (sit to lying, lying to sitting)
- Transfers (sit to stand, chair/bed transfer, toilet transfer)
Common opportunities:
- Capturing the resident’s true status over the first 3 days
- Training CNAs on how their documentation supports GG coding
- Using IDT huddles to reconcile discrepancies
- Avoiding defaulting to higher independence when assistance is consistently needed
GG is one of the most frequently miscoded sections nationwide, and improving it can meaningfully raise CMI while better reflecting resident needs.
- High-Quality Diagnosis Coding
Diagnosis accuracy is essential to place residents into the correct nursing categories and support other PDPM components where states use them.
Diagnoses must be:
- Active during the look-back window
- Supported by provider documentation
- Clearly tied to skilled nursing interventions
- Accurately coded on the MDS
High-impact areas are frequently under-captured:
- Malnutrition
- Cardio-respiratory failure and shock
- Respiratory diseases (e.g., COPD, chronic lung disease)
- Complex wounds and foot lesions
- Neurologic conditions (e.g., Parkinson’s, hemiplegia)
- Pressure ulcers and other serious skin conditions
- Regular MDS Audit Systems
Robust MDS audits are essential in a PDPM Nursing–driven Medicaid model.
Audit focus areas should include:
- Correct nursing group assignment
- GG function scoring
- Behavior and cognition items
- Extensive services criteria
- Active vs. inactive diagnoses
- Infection coding rules
- Alignment between documentation and MDS answers
Many organizations use:
- Monthly internal audits for high-volume or high-risk areas
- Quarterly external reviews for validation and education
- Pre-transmission checks on key PDPM drivers
- Nursing CMI dashboards or scorecards to trend performance over time
Final Thoughts: Nursing-Based Medicaid CMI Is Here to Stay
The move away from RUGs marks a transformative moment for long-term care. PDPM Nursing–driven Medicaid systems finally align reimbursement with the realities of today’s resident population—higher acuity, complex medical needs, and significant cognitive and behavioral challenges.
A strong, accurate Medicaid CMI leads to:
- Better resource allocation and staffing decisions
- More accurate representation of resident acuity
- Stronger financial stability
- Improved clinical integrity and defensible coding
- More consistent, reliable MDS processes across the IDT
Facilities that invest in documentation, interdisciplinary collaboration, and strong admission and audit processes will thrive under PDPM-based Medicaid CMI—now and into the future.
Written By:
Sarah Becker, RN, RAC-CT, DNS-CT, QCP
Director of Clinical Reimbursement
Proactive LTC Consulting
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