Every patient you care for in your skilled nursing facility represents different levels of complexity, resources, and reimbursement potential.

Your Case Mix Index (CMI) directly impacts how much Medicare pays for these varying levels of care –– yet many SNFs miss out on rightful reimbursements due to documentation gaps and coding oversights.

Many SNFs leave money on the table simply because they don't fully understand how CMI impacts their bottom line or how to optimize it effectively.

In this article, we'll cover:

• What CMI is & how it's calculated

• What a good CMI looks like for your facility type

• Proven strategies to improve your CMI & increase reimbursements

What is the case mix index?

Your facility's Case Mix Index (CMI) is a single number that tells Medicare how complex and resource-intensive your patient care is. Think of it as a score that reflects the overall acuity of your patient population.

CMI combines all your patients' diagnoses, conditions, and care needs into one metric that Medicare uses to determine your reimbursement rates. The formula takes each patient's Diagnosis-Related Group (DRG) weight and averages them across all your Medicare and Medicaid patients.

Why it matters: Every time your nursing staff handles a complex wound care case or manages multiple chronic conditions, that care should be reflected in your CMI –– and in your reimbursements.

A higher CMI means Medicare recognizes the intensive care you're providing and pays you accordingly. When your CMI is too low, you're likely missing out on payments you've earned.

How facilities use it: The math is straightforward: higher patient complexity = higher CMI = better reimbursements. SNFs that actively track and optimize their CMI can:

• Ensure they're paid fairly for resource-intensive care.

• Make more informed admissions decisions.

• Show hospitals they can handle complex cases.

• Better predict their expected Medicare revenue.

Key factors that influence CMI

Your Medicare CMI score depends on several interconnected factors. Understanding each one helps you spot opportunities to improve your documentation and capture the full complexity of your patient care.

Diagnosis-Related Group (DRG) classifications

While Case Mix Index (CMI) is used across healthcare settings, the systems for determining patient complexity and calculating CMI differ between hospitals and skilled nursing facilities.

Hospital classifications: In hospitals, CMI is calculated using Diagnosis-Related Groups (DRGs) under the Inpatient Prospective Payment System (IPPS). Each hospital admission is assigned a DRG based on the patient's primary diagnosis, procedures, age, and other factors. These DRGs carry different weights that reflect the intensity of care required.

SNF classifications: In skilled nursing facilities, the Patient-Driven Payment Model (PDPM) has been used since October 2019, replacing the previous Resource Utilization Groups (RUG-IV) system. 

Under PDPM, your facility's CMI is determined by residents' clinical characteristics and care needs across five case-mix adjusted components:

• Physical therapy

• Occupational therapy

• Speech-language pathology

• Nursing

• Non-therapy ancillaries (NTA)

Each PDPM component has its own case-mix classification group with associated payment weights. Your facility's overall reimbursement depends on accurately documenting and coding all relevant clinical characteristics and services within each component.

For example, missing documentation about specialized nursing interventions or therapy services directly impacts your payment rates.

When your documentation captures the full scope of care provided under these PDPM components, your CMI better reflects the true intensity of care your facility delivers to residents.

Patient complexity and comorbidities

Secondary diagnoses can significantly affect your CMI score. A patient with diabetes might also have chronic kidney disease, heart failure, and wound care needs.

Each properly documented condition adds to their complexity score. Your staff needs to identify, document, and code these comorbidities during admission and throughout the patient's stay.

Accurate documentation and coding

Documentation errors and omissions are one of the biggest culprits behind low CMI scores –– and one of the most fixable.

Many facilities provide complex, resource-intensive care but fail to document it in a way Medicare recognizes for reimbursement. Every missed detail about a patient's condition or treatment represents potential lost revenue.

Here's what your documentation needs to capture:

• Changes in condition

• Treatment responses

• Nursing interventions

• Therapy progress

• Medication management

All result in lower CMI scores and reduced reimbursements. Create clear processes for daily documentation and regular chart reviews to catch missing information.

Length of stay patterns

Longer stays often indicate more complex cases that require intensive medical care, therapy, or specialized nursing interventions. However, length of stay alone does not increase your CMI. What matters is documenting why a patient requires an extended stay.

Other factors that can contribute to longer stays include:

• Inefficiencies in care delivery, such as delays in obtaining lab results, specialist consultations, or therapy evaluations
  
  

• Discharge planning challenges, including difficulty coordinating post-acute care placements, waiting for home health services, or delays in securing durable medical equipment
  
  

• Custodial care needs, where patients require long-term assistance with daily activities rather than skilled medical interventions, which do not contribute to higher CMI

To differentiate between medically necessary and avoidable longer stays, track your facility’s average length of stay alongside patient acuity and case complexity.

Clinical staff training

Even the best documentation systems and protocols won't improve your CMI if your staff doesn't understand how to use them effectively.

Clinical staff training helps your team recognize how their daily observations and notes directly impact your facility's reimbursements. A well-trained team becomes your first line of defense against revenue loss from missing or incomplete documentation.

Here's what your staff needs to understand:

• Which details matter for coding

• How to document complex care properly

• When to flag changes in a patient’s condition

• The connection between documentation and reimbursement Regular training sessions and documentation audits can help maintain high standards.

Admission screening protocols

Your facility's admissions criteria do more than just determine which patients you accept –– they fundamentally shape your CMI score and reimbursement potential.

Having clear protocols helps you make consistent decisions about which cases your facility can handle safely and profitably. Before accepting complex cases that could boost your CMI, take a careful look at these key operational factors:

• Clinical capabilities of your staff

• Available specialty equipment

• Therapy resources

• Staff-to-patient ratios When screening referrals, balance accepting complex cases with your facility's ability to provide appropriate care.

How to calculate case mix index (CMI)

Unlike hospitals, which calculate CMI using Diagnosis-Related Groups (DRGs), skilled nursing facilities (SNFs) determine CMI based on Patient-Driven Payment Model (PDPM) classifications. Instead of focusing on patient discharges, SNFs calculate CMI using Minimum Data Set (MDS) assessments, which capture resident care needs at a specific point in time.

CMI formula for SNFs

Each PDPM group has an assigned CMI weight, reflecting the resource intensity of care required for that classification. To determine facility-wide CMI, the formula is:

CMI = \frac{\sum(\text{Number of residents in each PDPM group}\times\text{CMI weight for that group})}{\text{Total number of residents assessed}}

This calculation provides an average CMI score, which Medicare and Medicaid use to determine reimbursement levels.

Let’s use an example.

An SNF has 100 Medicare residents, assigned to PDPM groups with these case-mix weights:

• 30 residents in a high-acuity nursing group (CMI weight = 1.8) → 30 × 1.8 = 54

• 40 residents in a moderate-complexity therapy group (CMI weight = 1.3) → 40 × 1.3 = 52

• 30 residents in a low-complexity category (CMI weight = 0.9) → 30 × 0.9 = 27

This means the facility's CMI for that period is 1.33.

Factors that affect CMI in SNFs

Several key factors influence the case mix index (CMI) in skilled nursing facilities (SNFs). Understanding these factors can help facilities optimize reimbursement rates while ensuring accurate classification of patient care needs.

Factors that change the CMI include:

• Resident acuity levels: The complexity of a facility’s patient population impacts CMI. Residents with higher medical needs, such as those requiring intensive nursing care, specialized therapy, or management of multiple chronic conditions, will contribute to a higher CMI.
  
  

• Accurate documentation and coding: Proper documentation and coding are essential for capturing the full scope of care provided. If diagnoses, treatments, or care needs are not thoroughly documented, the facility may receive a lower reimbursement than it is entitled to. Regular audits and staff training can help ensure accuracy.
  
  

• MDS assessments: CMI is calculated based on Minimum Data Set (MDS) assessments, which evaluate resident conditions and care needs. Unlike hospitals, which often calculate CMI based on discharges, SNFs rely on MDS data to classify patients into case-mix groups under the PDPM model.
  
  

• Non-therapy ancillaries (NTA) scores: Certain conditions and treatments increase the NTA score, which in turn affects the overall CMI. Residents with conditions such as HIV/AIDS, complex wound care, ventilator dependency, or intravenous medication requirements are assigned higher case-mix weights, leading to increased reimbursement.

By ensuring comprehensive and precise coding, SNFs can capture the full complexity of care provided and receive appropriate reimbursement for services.

What is a good case mix index? 

CMI benchmarks vary significantly based on your facility type and patient population. While there's no universal "good" score, understanding typical ranges helps you gauge where your facility stands.

Normal CMI values for different facilities

• Acute-care hospitals: 1.5 to 2.0
  
  

• Skilled Nursing Facilities (SNFs): 1.0 to 1.3
  
  

• Long-Term Care (LTC) facilities: Typically below 1.0 but can exceed 1.2, depending on the state’s Medicaid case-mix system. Unlike SNFs, which use Medicare’s PDPM, Medicaid-funded LTC facilities often rely on state-specific Resource Utilization Groups (RUGs) or alternative classification systems to determine reimbursement.
  
  CMI ranges can differ based on the specific case mix system and policies in place within each state. Therefore, while the provided range offers a general perspective, actual CMI values may vary.
  
  

• Specialty hospitals (cardiac, surgical): 2.0 to 2.5
  
  

• Rehabilitation centers: Typically range from 1.0 to 1.8 or higher, depending on patient complexity. Inpatient Rehabilitation Facilities (IRFs) use the IRF-PPS system with Case Mix Groups (CMGs) rather than PDPM or DRGs. CMI values vary based on accurate documentation, comorbidities, and case severity.

Because LTC facilities use different classification and reimbursement methodologies than SNFs, their CMI should be interpreted within the context of their state’s Medicaid system rather than compared directly to Medicare-driven SNF CMI values.

A higher CMI means

• Your facility handles more medically complex patients, as indicated by documented acuity levels.
  
  

• You are providing resource-intensive care, which requires increased staffing and specialized treatments.
  
  

• Your documentation and coding accurately reflect patient acuity, ensuring that Medicare/Medicaid recognizes the complexity of care provided.
  
  

• You are likely receiving appropriate reimbursement rates, aligning with the level of care documented.
  
  

• Your facility may have the infrastructure to support higher-acuity cases, but a high CMI alone does not guarantee staff competency. Ensuring that clinical capabilities match patient needs is essential.

A lower CMI may indicate

• Documentation gaps could be understating patient complexity, leading to lower reimbursement than expected.
  
  

• Coding may not be capturing all relevant conditions, such as secondary diagnoses or comorbidities that impact case-mix classification.
  
  

• A less complex patient population or intentional admission strategies may naturally result in a lower CMI, rather than documentation issues.
  
  

• Opportunities for higher reimbursements may be missed, especially if coding practices do not fully reflect the level of care provided.
  
  

• Systemic factors, such as payer mix, state policies, or facility-level decisions, can also influence CMI beyond individual staff training. While documentation training can help, it is only one of many factors affecting CMI.

Your optimal CMI depends on your facility's capabilities, staff expertise, and strategic goals. Focus on accurately documenting the care you provide rather than targeting a specific number.

How to increase the case mix index for higher reimbursements

Getting the most from your Medicare reimbursements starts with understanding the key drivers of your CMI score. Here are three proven strategies that successful SNFs use to optimize their CMI while maintaining quality care.

Accurate coding and documentation

Many SNFs lose potential reimbursements due to incomplete documentation and coding oversights. For example, a patient with diabetes may receive specialized wound care, medication management, and dietary services, but if these services are not accurately coded, Medicare will not reimburse the facility appropriately for the level of care provided.

Start by reviewing ICD-10 codes weekly to ensure they accurately reflect each resident’s current conditions and care needs. Focus on PDPM classifications that impact reimbursement, including comorbidities, functional status, cognitive impairments, and therapy needs.

Many facilities find success by creating a "documentation checklist" for cases that require more resource-intensive care, such as post-surgical wound care, multiple chronic condition management, and specialized therapy needs.

Consider bringing in a documentation specialist quarterly to review your coding practices and update protocols. They can help identify patterns of missing documentation that may be reducing reimbursements and recommend process improvements to ensure all care provided is properly captured.

Quick tip: Make it easy for staff to document correctly by creating standard templates for common scenarios. This ensures that no billable services go unrecorded, reducing the risk of lost revenue due to incomplete documentation.

Capturing comorbidities and non-therapy ancillaries (NTA)

Your patients' secondary conditions and medical needs can significantly boost your CMI score –– but only if they're properly documented. Consider a stroke patient who also has diabetes requiring insulin management, chronic wound care needs, and swallowing difficulties requiring dietary modification.

Each of these conditions affects care planning and should impact your reimbursement. Here's what your documentation process should capture:

• All chronic conditions that affect daily care

• Changes in patient status or new complications

• Non-therapy services like respiratory care or wound treatment

• Medication changes and their impact on care needs

• Special dietary needs and restrictions

Practical example: A patient admitted for orthopedic rehabilitation might also have COPD requiring oxygen therapy. If your staff doesn't document both the respiratory care and the therapy services, you're missing out on legitimate reimbursements.

Optimizing patient admission strategies

Smart admissions decisions help maintain a healthy CMI while ensuring quality care. Instead of taking every referral, develop clear criteria that balance patient acuity levels with your staff's clinical capabilities. Consider your available specialized equipment, therapy resource capacity, and current patient mix when evaluating new referrals.

Track admission outcomes to identify which types of cases your facility handles most successfully. Which conditions typically result in positive outcomes? Where does your staff excel in providing care? Use this data to refine your admission criteria and guide conversations with referral sources.

The goal isn't just to increase your CMI –– it's to accept patients you can care for effectively while ensuring proper reimbursement for the services you provide. Many successful facilities create a simple scorecard for evaluating new referrals based on their strengths and current patient mix.

This helps make consistent, strategic admission decisions that benefit both patient care and facility finances.

Quick tip: Regularly review your admission patterns against your reimbursement data. Look for trends that show which patient types generate appropriate reimbursements while maintaining high-quality care outcomes.

How ExaCare Supports Case Mix Index Optimization

Since CMI directly impacts reimbursement rates, SNFs and long-term care facilities need accurate patient classification, coding, and billing — all areas where ExaCare can provide significant benefits.

1. Accurate PDPM classification for higher CMI and reimbursements

Facilities often under-report patient complexity due to inaccurate PDPM groupings, leading to lower CMI and lower reimbursements.

ExaCare's solution:

• AI-powered analysis of referral packets that extracts and summarizes critical clinical information

• Automatic identification of key diagnoses and clinical needs

• Complete clinical and financial assessments for each patient

• Integration with major EHR systems for accurate data transfer

Impact: More accurate PDPM classifications that capture the full complexity of patient care, leading to appropriate reimbursements and reduced revenue loss from under-coding.

2. Reduced claim denials and maximized patient revenue

SNFs & LTCs lose revenue when CMI scores are underreported or claims are denied due to documentation errors.

ExaCare's solution:

• Automated screening of referral documents for complete documentation

• Real-time identification of high-cost medications and reimbursement risks

• Seamless integration with existing EHR systems like PointClickCare and WellSky

Impact: Faster, more accurate admissions decisions and reduced risk of claim denials

3. Improving case-mix index tracking and data analytics

Many SNFs & LTCs lack visibility into their case-mix trends, making it hard to adjust patient intake strategies for financial sustainability.

ExaCare's solution:

• Response tracking to measure and improve response times to hospital referrals

• Analytics dashboard for monitoring admission patterns

• Insights into referral sources and response times

Impact: Better visibility into patient mix trends and improved decision-making for admissions

How ExaCare fits into a CMI-driven strategy

Here's how ExaCare addresses key CMI challenges in skilled nursing facilities.

|             Challenge            |                      How It Affects CMI & Revenue                     |                                       ExaCare's Solution                                      |
|:--------------------------------:|:---------------------------------------------------------------------:|:---------------------------------------------------------------------------------------------:|
|   Incorrect PDPM Classification  |  Under-reported patient complexity → Lower CMI & lost reimbursements  | AI-powered analysis of referral packets to extract and identify critical clinical information |
|    Manual Documentation Review   | Slow processing times lead to missed referrals and delayed admissions |      Automated screening of hospital packets in minutes with key data points highlighted      |
|  Billing Errors & Claim Denials  |     Delayed payments & revenue loss from incomplete documentation     |           Real-time identification of high-cost medications and reimbursement risks           |
| Lack of Case Mix Data Visibility |              No insight into high-revenue patient trends              |           Analytics dashboard for monitoring admission patterns and referral trends

Boost your CMI and maximize reimbursements with ExaCare

Optimizing your case mix index requires attention to detail, accurate documentation, and quick decision-making –– all while managing a constant stream of referrals and coordinating with your staff.

Many SNFs struggle to balance these demands, especially when trying to maintain high standards of patient care.

ExaCare helps you tackle these CMI challenges by automating the most time-consuming parts of your admissions process. This means you can focus on what matters most: Providing quality care while ensuring your facility receives appropriate reimbursements for the services you deliver.

Here's how ExaCare can help you improve your CMI:

• AI-powered screening that reviews hospital packets in minutes, helping you identify and document complex cases accurately
  
  

• One central platform that brings all your referral sources together, making it easier to track and manage patient mix
  
  

• Built-in analytics that show you exactly how your admissions decisions impact your CMI
  
  

• Automated alerts for high-cost medications and reimbursement risks that could affect your bottom line
  
  

• A unified hub where your team can collaborate on admissions decisions

Want to see how ExaCare can help your facility? Let's talk about your specific needs.

Schedule a demo.