Resource utilization groups. DRGs move to long-term care.

The costs associated with a growing population of elderly persons in the United States combined with a need to restrain escalating acute care costs led to the development of a prospective payment system (PPS) for institutional long-term care in New York State. Although similar types of PPS exist in several other states, it is expected that RUGs will become the model for the nation. The price paid is based on a formula that combines the direct care components of care with allocated medical and ancillary costs per patient. Based on a patient classification case-mix system, the Resource Utilization Group (RUG) relies on specific nursing documentation of patient care delivered, that is, resource used. Implemented at the same time as diagnostic-related groups (DRGs), the RUGs system is not based on length of stay, diagnosis, or age. Activities of daily living (ADL) drive the system and, in that sense, RUGs has some similarities to severity of illness models. There are 16 RUGs (that is, 16 case-mix indexes and 16 prices), ranging from skilled rehabilitation and intensive skilled nursing care to light custodial care. Patients assessed at the low end of the spectrum--light care, lowest price--may be denied admission to nursing homes as well as prepared for discharge to the community or a lighter level of care. Discharge planning and patient teaching for less dependent living are recent phenomena in nursing homes. Nurses have to learn how to manage the complex, technologically dependent patient as well as learn aspects of preparing the patient--and family--for discharge. The challenge to nursing is to protect the patient from negative incentives inherent in the RUGs system; analyze the nursing process and productivity; and contribute to research that should be observing the effect of the reimbursement system on the quality of care.