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. Author manuscript; available in PMC: 2012 Jul 1.
Published in final edited form as: J Health Econ. 2011 Jun 6;30(4):675–684. doi: 10.1016/j.jhealeco.2011.05.014

Table 1.

Summary of Major Changes to the Medicare Skilled Nursing Facility Payment System (1996–2004)

Timing Change
Start of facility fiscal year on/after July 1, 1998 Adoption of per diem prospective payment system, which uses Resource Utilization Groups (RUGs) to place residents into payment categories
April 1, 2000 Balanced Budget Refinement Act (BBRA) provided a 20% increase in 12 RUGs dealing with "complex care", and 3 of the rehabilitation RUGs (RHC; RMC; RMB); 4% increase for other RUGs
April 1, 2001 Benefits Improvement and Protection Act (BIPA) provided 16.6% increase for nursing component; removed the 20% BBRA increase for the three rehabilitation RUGs; and, provided a 6.7% increase for all 14 rehabilitation RUGs
September 30, 2002 The 16.6% nursing increase under BIPA expired