The Minimum Data Set (MDS) is a uniform instrument used in nursing homes to assess resident condition that has far reaching implications. While its primary purpose is to collect data to describe the characteristics of residents and guide care plans, it is also used to determine reimbursement rates, generate quality measures that are used to evaluate nursing homes and to inform improvement initiatives. Of critical importance to financial managers, the MDS serves as a data source for adjusting nursing home payments: Medicare PDPM categories are driven by the MDS while appropriate Medicaid case mix adjustments as well as special population add-on payments depend on complete and accurate completion of MDS items. These data elements are also used in publicly reported quality measures which can influence consumer behavior, impact partnerships with payers, and have a direct effect on funding through Medicare VBP and Medicaid Quality Pool adjustments.
On October 1, 2023, the Centers for Medicare and Medicaid Services (CMS) will implement significant changes to the MDS. These changes will usher in an updated set of assessment questions, and impact on the entire spectrum of operations, from care planning and survey to 5-star ratings, quality measures, Quality Reporting Program (QRP) measures, and, of course, finances. While the nursing department may play a leading role in this change, all key members of nursing home interdisciplinary teams, especially finance staff, need to understand the changes and their fiscal implications.
While a fundamental understanding of these changes is critical, many providers are at risk from this change. Recent financial and operational challenges have created a survival mindset, making it increasingly more difficult for hard-pressed providers to focus on such updates as well as quality metrics. Additionally, constant staffing shortages add another layer of complexity when it comes to ensuring nursing staff are trained to fully understand these changes.
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