SNF Billing Change: Patient-Driven Payment Model to Replace RUGs on Oct. 1

Effective Oct. 1, 2025, the Centers for Medicare and Medicaid Services (CMS) is ending support for the Resource Utilization Groups, Version III (RUG-III) and RUG-IV classification systems for federally required assessments in nursing and skilled nursing facilities and replacing it with the Patient-Driven Payment Model (PDPM).

We alerted Skilled Nursing Facility (SNF) providers of this billing change via USPS certified mail in August.

Provider Impact

Highmark is moving to the PDPM methodology, which will require providers to bill using appropriate Health Insurance Prospective Payment System (HIPPS) codes instead of RUGs codes.

Network participating providers currently under RUGs reimbursement methodology will be required to submit claims for those members in the PDPM format, using HIPPS codes. Claims for these members will be processed and paid according to PDPM processing and pricing rules established by CMS.