The final FY 2010 Medicare skilled nursing facility (SNF) prospective payment system (PPS) rule, which was released by CMS on July 31, 2009, reduces rates by 1.1% compared to FY 2009 levels. CMS adopted its controversial proposal to recalibrate case mix weights to compensate for increased expenditures resulting from refinements made in 2006. The recalibration reduces overall SNF PPS payments by 3.3% ($1.050 billion) in FY 2010. This decrease is partially offset by a 2.2% market basket index (MBI) update (a $690 million increase), resulting in the 1.1% negative update ($360 million). In the rule, CMS also finalizes its plans to establish a new Resource Utilization Groups, version 4 (RUG-IV) case-mix classification model for FY 2011, reflecting updated staff time measurement data from CMS’s Staff Time and Resource Intensity Verification (STRIVE) project and using the updated Minimum Data Set (MDS) 3.0 resident assessment instrument.  The official version of the rule is scheduled to be published August 11, 2009. The rule is effective October 1, 2009.