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This video takes you through the step by step process of calculating PDPM rates. PDPM or the Patient Driven Payment Model is the current method for reimbursing Skilled Nursing Facilities (SNFs) for their resident’s time at the facility. It is a per diem payment model that calculates the payment to a facility based on clinical characteristics, patient assessments & diagnosis, and resource needs in the form of coordinated team-based care during a patient’s stay. PDPM assigns residents a case-mix classification that drives the daily reimbursement rate for that person. This new method was developed for Medicare patients and is a shift from the Prospective Payment System (PPS). The PPS used Resource Utilization Groups (RUG) rates to determine costs. PDPM was created to address issues with the PPS RUG rates payment system that based payments on the volume of service and thus created negative incentives for facilities to boost the amount of services.