Driving Excellence in Skilled Nursing: Strengthening MDS Accuracy for Compliance, Quality, and Resident Outcomes

September 30, 2025

Insights from: Scott Heichel, RN, RAC-MT, RAC-CTA, DNS-CT, IPCO, QCP, ICC – Director of Reimbursement and Education

Why MDS Accuracy Matters More Than Ever
Today’s skilled nursing environment is under unprecedented scrutiny. A recent OIG report found that 43% of resident falls with major injury and hospitalization were not reported in Minimum Data Set (MDS) assessments.

These lapses not only compromise the accuracy of CMS’s Care Compare data but also expose organizations to compliance risk, reduced quality ratings, and potential reimbursement loss.

For skilled nursing facility leaders, the message is clear: MDS accuracy is not optional—it’s foundational. Accurate assessments drive compliance with CMS requirements, support resident-centered care planning, and impact nearly every program tied to financial sustainability, including Five-Star Ratings, SNF QRP, VBP, and PDPM.

Leadership Considerations: Three Key Strategies for Leaders to Review and Address
Achieving MDS accuracy demands leadership, collaboration, and continuous education. Consider the following strategies that give leaders a clear roadmap to reduce risks, strengthen compliance, and improve outcomes for residents and organizations alike.

Build a Culture of Data Integrity: Skilled Nursing Facility leaders must lead with a focus on accuracy and transparency in reporting. Inaccurate coding and reporting, whether unintentional or due to knowledge gaps, impact regulatory, clinical, and quality outcomes. It can also impact financial outcomes. Leaders should:

  • Prioritize education and accountability in documentation practices.
  • Encourage staff to view accurate MDS reporting as a resident safety and quality priority, not just a regulatory requirement.
  • Use internal audits and data validation tools to detect inconsistencies early.

Strengthen Interdisciplinary Collaboration: MDS accuracy is not the sole responsibility of the MDS Coordinator. It requires the collective input of the interdisciplinary team. Leaders should:

  • Review their daily clinical meetings to align real-time communication about resident changes, hospitalizations, and falls.
  • Align MDS coding practices with clinical documentation and physician certifications.
  • Conduct regular Utilization Review and Triple Check processes to verify assessment accuracy before submission.

Invest in Baseline Assessments and Ongoing Education: Complex regulations and shrinking resources make it difficult to maintain consistent MDS accuracy. A proactive solution is to conduct baseline MDS process assessments and provide staff with targeted education. These efforts help identify compliance risks such as late submissions, inaccurate Five-Star data, and incomplete care plans. Pathway Health’s MDS Baseline Assessment offers:

  • A two-day onsite review by clinical reimbursement specialists.
  • One-on-one team meetings to evaluate knowledge gaps.
  • A findings report with actionable recommendations.
  • Ongoing support and tools for sustainable improvements.

How Pathway Health Can Help
At Pathway Health, we bring insight, expertise, and knowledge to help organizations achieve compliance confidence and operational excellence. By partnering with us, leaders can:

  • Enhance MDS accuracy through structured assessments and education.
  • Reduce risks tied to audits, ADRs, and survey citations.
  • Improve reimbursement outcomes.
  • Improve Care Compare outcomes and strengthen their Five-Star Ratings.
  • Position their organizations as trusted providers of quality resident care.

The OIG’s findings are a significant reminder that accurate MDS completion and reporting is not just about compliance; it’s about integrity, safety, and organizational sustainability. 

For more information on how Pathway Health can support your organization, visit PathwayHealth.com.

Insight: SNF VBP
Importance of Coding the MDS and Impact on SNF VBP

The SNF Value-Based Purchasing (VBP) program ties Medicare reimbursement to performance on specific quality metrics. Remember the following:

  • Financial Adjustment: All SNFs experience a 2% withhold from their Medicare Part A payments. Facilities that perform well on VBP measures earn back some or all of the withheld funds (and potentially bonus payments), while poor performers lose revenue.
  • MDS Accuracy Connection:
    • Incorrect coding of diagnoses, functional status, or comorbidities can misrepresent resident acuity. This leads to skewed risk adjustment, making outcomes (like rehospitalizations) appear worse than they truly are.
    • Incomplete capture of clinical complexity reduces case-mix reimbursement while inflating readmission penalties.
    • Errors in discharge assessments (e.g., documenting hospital transfers) can distort facility performance on readmission tracking.
  • Underpayment: Missing or inaccurate MDS items (such as depression, swallowing disorders, or comorbidities) can lower PDPM reimbursement rates.
  • Overpayment Risk: Overstating needs may lead to clawbacks, audits, and penalties.
  • VBP Penalties: Facilities with inaccurate data may rank lower nationally, losing incentive payments and absorbing the full 2% withhold.
  • Reputation: Poorly coded data impacts quality star ratings, influencing referrals from hospitals and families.

Download the SNF Value-Based Purchasing (VBP) QuickTip © for Leaders and MDS Coordinators here >

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