Case-mix classification of Medicare residents in skilled nursing facilities: resource utilization groups (RUG-T18)

Medicare residents in Skilled Nursing Facilities (SNFs) represent a small but unique population about which little is known. Data collected in a national sample of 2,564 Medicare residents in 38 SNFs were used to derive a resident classification system appropriate for use in a payment system. The classification system, Resource Utilization Groups-Medicare (RUG-T18) explains 55.5% of the per-diem resource cost differences of Medicare SNF residents. No classification system could be derived to provide significant explanation of per-episode costs. Although Medicare residents are admitted to SNFs immediately following an acute stay that is paid according to their diagnosis-related groups, the DRGs were ineffective in explaining SNF resource costs.