What is the purpose of the Resource Utilization Group (RUG)?

The Resource Utilization Group (RUG) system is specifically designed to determine the payment rates for skilled nursing care. It categorizes patients based on their clinical and functional needs, which directly influences the reimbursement rates that skilled nursing facilities receive from Medicare and Medicaid programs. This classification system ensures that facilities are compensated appropriately based on the complexity and level of care required by their patients, thereby facilitating a fair and efficient payment model that aligns with the resources utilized in patient care.

Understanding the RUG system is crucial for revenue cycle management, particularly for facilities providing skilled nursing services, to ensure compliance and optimize their revenue.