CoreCare’s PDPM LTC Playbook for Texas Medicaid

CoreCare’s guide gives MDS coordinators and interdisciplinary teams the key ingredients to master Texas Medicaid’s shift from RUG-III to PDPM LTC—clear steps, smart tips, and everything you need for a smooth, successful transition.

1. Overview and Key Dates

Effective date: HHSC will move nursing-facility providers from the RUG-III payment methodology to the PDPM LTC methodology on September 1, 2025.

Purpose: Rider 25 of the 2024-25 General Appropriations Act requires HHSC to develop a Texas version of PDPM for long-stay Medicaid residents. PDPM LTC calculates payment based on patient characteristics rather than therapy minutes, aiming to better align reimbursement with resident needs.

Transition timeline: HHSC and TMHP updated the Long-Term Care Online Portal (LTCOP) to display Section GG of the MDS in August 2024. A second release, effective September 1, 2025, will use existing MDS fields to calculate the PDPM LTC value for assessments whose Assessment Reference Date (ARD) is on or after 9/1/2025.

2. MDS Assessment and LTCMI Form Changes

2.1 MDS Assessment Transition

• No hard cut-over: TMHP notes there will be no hard cut-over from RUG-III to PDPM LTC. The system uses each assessment’s ARD to decide which methodology applies.
• Existing residents: Residents currently receiving services under RUG-based assessments will continue under RUG-III until their next OBRA MDS assessment with an ARD on or after September 1, 2025.
• New assessments after 9/1/25: For new nursing-facility residents and those reassessed on or after September 1, 2025, the system will stop calculating RUG levels; only PDPM LTC classification and rates will be applied. RUG levels will be phased out once all residents transition.
• Data submission: PDPM LTC values will be calculated using data submitted through the existing MDS submission process and stored in the LTCOP in the same field and format currently used for RUG values.

2.2 LTC Medicaid Information (LTCMI) Form Changes

• The LTCMI Form will be updated to align with PDPM LTC. Drafts started before September 1, 2025, and reopened on or after September 1 will automatically reflect the new fields.
• Section GG: The updated LTCOP displays Section GG beginning in August 2024. Section GG data will be used to calculate PDPM LTC values for assessments with ARDs on or after September 1, 2025.
• Section G retired: Section G (Activities of Daily Living) will be disabled for assessments submitted on or after September 1, 2025. Historical assessments will continue to display Section G but it will no longer be editable.

3. Payment and Rate Changes

3.1 PDPM LTC Rate Structure

PDPM LTC uses three payment components: Nursing, NTA, and Behavioral/Cognition (BIMS add-on).
Review the nursing case-mix group first, then the NTA component, and finally the BIMS add-on. If the combined PDPM component rate is higher than the resident’s RUG base rate, consider completing a new MDS with an ARD on or after September 1, 2025.

Approved PDPM LTC rates and case-mix indices will be posted on the HHSC Provider Finance Department website.

3.2 Rate Enhancement and Liability Insurance Add-On

• Discontinuation of rate enhancement: HHSC will discontinue the Direct Care Staff Rate Enhancement Program and the Direct Care Spending Requirement effective September 1, 2025.
• An annual patient-care expense ratio will replace the program.
• After this date, claims for residents without a PDPM MDS will still be priced using RUG methodology, but facilities will receive only the base rate plus the liability insurance add-on.

3.3 New Bill Codes

New billing codes for nursing-facility daily care will be introduced on September 1, 2025, to align with PDPM LTC levels. HHSC has developed enhanced rates for residents with a diagnosis of HIV/AIDS, which will be billed under separate codes. Billing templates must be updated accordingly.

4. CoreCare’s PDPM LTC Crosswalk: Your Guide to Knowing When a New MDS Is Needed

1. Review current RUG base rate: Identify the resident’s current RUG category and base rate. The base rate excludes staffing enhancement and many RUG rates will decline on September 1, 2025.
2. Use CoreCare’s PDPM LTC Crosswalk: Compare the resident’s current RUG base rate to the projected PDPM LTC rate calculated from the nursing, NTA, and BIMS components. If the PDPM rate exceeds the RUG base rate, completing a new MDS with an ARD on or after September 1, 2025 may increase reimbursement.
3. Consider documentation look-back: For assessments with an ARD of September 1, 2025, the look-back period falls in August 2025. Ensure clinical documentation is complete and accurate during this period.
4. Coordinate with billing: Communicate any diagnoses affecting payment (e.g., HIV/AIDS, extensive services) to billing staff so the correct codes and modifiers are used on claims. Include PDPM components in routine financial level-of-care meetings.

5. Staffing and Documentation Considerations

• Increased workload in September 2025: Many residents may require new MDS assessments around the transition date. Plan staffing accordingly—assign additional time for nursing assessments, therapy evaluations, BIMS interviews, and care-plan updates.
• Interdisciplinary team (IDT) training: Educate therapy, dietary, and social-services staff on PDPM LTC components and documentation requirements. Section GG functional scoring and comorbidity items will drive the NTA and nursing components.
• ICD-10 code accuracy: The PDPM NTA component relies on active diagnoses. Review all resident diagnoses and verify that they are documented in the medical record and appear on the MDS and claim.

6. Training and Certification Requirements

• RUG training sunset: Assessors can no longer access RUG certification training through Texas State University as of June 16, 2025.
• New PDPM training: Updated PDPM LTC training materials will be available at no cost by September 1, 2025.
  • During the interim (June 16–Aug 31, 2025), assessors needing to renew or obtain certification must submit a form via the Texas State University site; certification will not lapse if forms are filed by August 31.
• Certification expiration: Assessors whose certification expires between September 1 and November 30, 2025, have until November 30, 2025, to complete the new PDPM training.
• Ongoing training: HHSC indicates assessors will continue to complete PDPM LTC training as their current RUG certification periods end. Training materials will not issue certificates but will be available online for reference.

7. Action Plan for MDS Nurses

Task	Why it matters	Timing
Educate yourself on PDPM LTC methodology	Understand how nursing, NTA, and BIMS components combine to produce the daily rate and how it differs from RUG-III. This knowledge informs care planning and reimbursement strategies.	Prior to Sept. 1, 2025
Review residents’ current RUG classifications and base rates	Identifying who may benefit from a PDPM reassessment helps prioritize workload and avoid reimbursement reductions.	Summer 2025
Conduct documentation audits	Ensure Section GG functional scores and comorbidities are accurately captured. Proper documentation during the August 2025 look-back window affects PDPM rates.	August 2025
Plan for multiple MDS completions	Many residents will require new assessments to establish PDPM rates; allocate staff and resources accordingly.	Sept.–Oct. 2025
Coordinate with billing and financial teams	Update claim templates for new PDPM codes, verify liability insurance attestations, and communicate diagnoses like HIV/AIDS that affect rates.	Ongoing
Complete PDPM training	Stay compliant and up to date; new training materials become available by Sept. 1, 2025.	As current RUG certifications expire

8. Additional Resources

• HHSC Provider Finance Department PDPM page: Details on PDPM LTC methodology, approved rates, and crosswalks.
• TMHP LTCOP transition article: Summary of the transition process, release timelines, and new billing codes.
• HHSC Information Letter 2025-12: Announces the discontinuation of the Direct Care Staff Rate Enhancement Program and describes pending rate increases for nursing facilities.
• RUG Certification Training (and Transition to PDPM) article: Guidance on the sunset of RUG training and availability of PDPM training.

9. Key Takeaways for a Successful Transition

• The PDPM LTC payment methodology goes live September 1, 2025, replacing the RUG-III system for new and reassessed residents.
• There is no hard cut-over; the assessment’s ARD determines which methodology applies.
• Prepare by reviewing residents’ RUG base rates, learning the PDPM component structure, auditing documentation, and completing necessary training.
• Rate enhancement payments end on September 1, 2025; only the base rate plus a liability insurance add-on (currently $1.67/day) will remain.

By following the steps in this guide, MDS teams can help their facilities navigate the transition smoothly, ensure accurate reimbursement under PDPM LTC, and continue providing high-quality care to Texas Medicaid residents.