I get this question from time to time. Most of the time the question is really "*If my average ADL score increased by one point, what would be the financial impact?*" It's a surprisingly difficult question to answer.

There are two approaches we could take. For a given population of patients, with a RUG and ADL score:

**Increase every patient by one ADL point.****Randomly add an ADL point to a patient until the overall average increases by one point. Do this many times and average the results.**

The first one definitely sounds easier, however it doesn't sound all that realistic. and in some cases it won't be possible. The second one sounds like a lot of work. So which is more accurate? Do they give similar results?

Let's do both and find out. I have selected a skilled nursing facility in New York State. It has 91 Medicare Part A patients. (Yes it's large) Most patients are in Rehab and there are lots of Ultra High patients. The average ADL score is 9.3. (RUG 66) Other than the size, this building is pretty typical of New York state.

**Method 1**

Fortunately, none of the ADL scores are 16 so we can simply add 1 to every score and see if any RUGs change. 13 out of 91 RUGs increased after the extra point. In this case *every *RUG that changed was RUB to RUC which results in *no increase in pay*. So if you used this method you would conclude that increasing the ADL average by one does nothing to PPD.

**Method 2**

Using the same RUGs, I simulated adding an ADL point to a random patient until the overall average ADL score had increased by 1. I did this simulation 10,000 times. There were 21 different outcomes. They ranged from zero dollars (64% of the time) to an increase of $2.15 (less than 1 percent of the time) per patient per day. The *expected outcome* is $0.18 per patient per day for *this *distribution.

Some thoughts:

- $0.18 doesn't sound like much, ($6,120 per year in this case) but that isn't the point. We want the best possible estimate we can get. In the long run, if your RUG distribution stayed the same or similar, this is what you would expect to see.
- In case you missed that, $0.18 is for this distribution. Yours will be different. If this facility had a lot more RUAs then the results would have been much higher. (
*I'd be happy to help you analyze yours. Contact me.*) - Method 2 is the most accurate without question. Method 1 is actually a small, special case of Method 2. It's easier to understand but only works when all scores are less than the maximum. The second method requires some expertise and a little time, but also helps you better understand ADL scoring and the business side of skilled nursing.

If you aren't looking at your ADL scoring you should be. ADL scoring has a tremendous impact on your reimbursement. Document *everything *you do or you can be guaranteed you aren't being properly reimbursed.