Background on Impending MDS Changes

By Chelsea Murray, Karen Donovan, on August 24th, 2023

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.

If you need further guidance or have any questions on this topic, we are here to help. Please do not hesitate to reach out to discuss your specific situation.

This material has been prepared for general, informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Should you require any such advice, please contact us directly. The information contained herein does not create, and your review or use of the information does not constitute, an accountant-client relationship.

Share on LinkedIn
Share on Facebook
Share on X

Written By

Chelsea Murray March 21
Chelsea Murray
Executive Vice President
Karen Donovan
Karen Donovan
Director, Beacon Solutions Group

Related Industries