So, it’s finally here. MDS 3.0, the updated resident assessment tool, has officially taken effect. So how exactly will this highly anticipated system change the way you, nursing home providers, operate? There are several ways.

Here is a brief rundown of the differences between this quality instrument differs and its predecessor, MDS 2.0. (Please see your MDS coordinator for more details):

The interview process:

One of the biggest changes is that MDS 3.0 for the first time incorporates residents into the interviewing process. Allowing residents to be involved in decision-making has several benefits, the Centers for Medicare & Medicaid Services, believes. It will give them a sense of ownership over their care, which could improve their clinical outcomes. It also will help promote resident-centered care. Finally, the information should be more accurate.

Take note: Resident interviews are contained within the new MDS 3.0 in Section C (Cognitive Patterns), Second D (Mood), Section F (Preferences for Customary Routine and Activities), and Section J (Pain).

MDS 3.0 requires four specific resident interviews. The questions are scripted in the MDS. The RAI (Resident Assessment Instrument) manual instructs the interviewer to ask the questions as they are written. To learn about the resident interview process, check out chapter three in the manual.


MDS 3.0 and its temporary RUG-IV classification system companion will have a major effect on reimbursement under Medicare Part A therapy. The system introduces modifications to skilled therapy definitions, coding and RUG (Resource Utilization Group) assignments. Probably of most significance to providers is there is required coding for three types of minutes: individual, concurrent and group. Each has a specific value as it relates to RUG code assignments.

Take note: The new rules say that all minutes of individual minutes go toward RUG-IV 66 classification. One-half of concurrent therapy minutes apply, as well as all minutes in group therapy. But group therapy minutes cannot exceed a 25% cap of the total minutes of therapy applied.

Nursing home providers are concerned that, as a result of these limitations, residents will be assigned to lower RUG codes, which will lower therapy reimbursement. The advice among the provider and therapy community is to emphasize the group minutes and de-emphasize the concurrent therapy minutes because of the greater weight assigned to group therapy minutes. Stay tuned for more on this issue.

It’s also worth remembering that the introduction of the RUG-IV today is only expected to be temporary. Because the healthcare reform law pushed RUG-IV implementation back until 2011, CMS is devising a hybrid RUG-III system (with RUG-IV’s revisions on concurrent therapy and the look-back period) for providers to tide them over to 2011. RUG-IV will serve as a bridge until the hybrid system has been completed, CMS has said.

Care Area Assessments

MDS 3.0 replaces Resident Assessment Protocols (RAPs) with Care Area Assessments (CAAs). CMS believes that CAAs allow for more in-depth assessment of residents.

The biggest difference the between the old and new MDS assessment process is that MDS 2.0 required that RAPS be the tool for conducting the thorough assessment. The new MDS does not mandate a specific assessment tool. CMS instead wants providers to use “tools that are current and grounded in current clinical standards of practice” for further assessment of potential areas of concern.

Take note: These potential areas of concern were formerly known as “triggered care areas.” MDS 3.0 has assigned an acronym to this phrase: Care Area Triggers (CATs). Completing the MDS only identifies CATs, which indicate caregiving needs and problems. CATs serve as the link between data and further assessment. See chapter four of the MDS 3.0 RAI manual for information on the care areas and the CAA process.

New operational, computer systems

Perhaps the most noticeable impact of MDS 3.0 on nursing home providers is the operational and technological adjustments. Policies need to be developed because of new MDS 3.0 processes. There must be changes in documentation formats and policies. Facilities need to plan for payment changes. Personnel must receive training on the assessment process. 

Upgrading hardware and software needs to accommodate the new data formulation and processing is also apparent. Of course, the sooner providers have installed MDS 3.0 software, the sooner employers have been able to get up to speed on the new system.  

Take note: Even though the system is underway, it’s not too late to update your facility processes and systems. Start weekly management meetings if you haven’t already. Talk to your vendors. Most importantly, work as a team. MDS touches nearly every aspect of your business. And one little suggestion: Treat your MDS coordinator extra special this year. 

A major overhaul

There is plenty more to say on the new system, which some say represents the biggest overhaul to payment and operations since the prospective payment system took effect in 1999. In other words, MDS 3.0 is big. Now that it’s starting, all eyes will be on providers and how they adapt. Also, you can bet that there will be plenty of analysis on whether the system ultimately helps to deliver better resident assessment, as regulators have promised.