This is the second of four articles dealing with the patient driven payment model (PDPM). Under PDPM each patient is classified into a group for each of the five case-mix adjusted components. The payment for each of the case-mix adjusted components is calculated by multiplying the case-mix indicator by the base rate in each group and then taking into consideration the variable per diem schedule when appropriate. Our first article reviewed the physical therapy, occupational therapy and speech language pathology components. This article reviews the nursing component. There are 25 classifications based on the categories that were used for RUG (Resource Utilization Group) IV nursing. The function score is based on Section GG of the Minimum Data Set (MDS) 3.0 and uses the nursing function score that includes seven items to calculate the total function score: