Medicare Proposes 2027 Payment Tweaks for Nursing Homes
Published Date: 4/7/2026
Proposed Rule
Summary
Starting in fiscal year 2027, skilled nursing facilities will see updated payment rates and new rules to improve care quality. These changes affect how Medicare pays and measures skilled nursing homes, aiming to reward better care while keeping costs fair. Facilities and Medicare users should get ready for these updates, with feedback due by June 1, 2026.
Analyzed Economic Effects
4 provisions identified: 1 benefits, 3 costs, 0 mixed.
FY2027 SNF Payment Rate Increase
For Federal Fiscal Year (FY) 2027 (October 1, 2026–September 30, 2027), Medicare proposes updated Skilled Nursing Facility (SNF) Prospective Payment System rates that include a 2022-based SNF market basket increase of 3.2 percent, a projected productivity adjustment of 0.8 percentage points (resulting in a proposed net market basket update of 2.4 percent), and new unadjusted per diem component amounts (for urban SNFs: PT $77.45, OT $72.09, SLP $28.92, Nursing $134.99, NTA $101.85, Non-case-mix $120.89; for rural SNFs: PT $88.29, OT $81.09, SLP $36.44, Nursing $128.98, NTA $97.31, Non-case-mix $123.13). CMS estimates this FY 2027 payment-rate update would increase aggregate payments to SNFs by $888 million during FY 2027.
SNF Value-Based Purchasing Payment Reduction
For FY 2027, updates to the Skilled Nursing Facility Value-Based Purchasing (SNF VBP) Program are estimated to reduce aggregate payments to SNFs by $203.41 million during FY 2027. CMS is also providing estimated performance standards for FY 2029 and FY 2030 and proposing updates to the review and correction policy for measures calculated with MDS assessment data beginning with FY 2027 data.
MDS Submission Requirement for All Residents (FY2031)
CMS proposes to require SNFs to submit Minimum Data Set (MDS) assessment data on every resident receiving covered skilled care regardless of payer, beginning with the FY 2031 SNF QRP. CMS estimates this requirement would increase annual costs to SNFs by $88 million beginning with the FY 2031 SNF QRP.
Removal of Two COVID-19 QRP Measures (FY2028)
CMS proposes removing two SNF Quality Reporting Program (QRP) measures beginning with the FY 2028 SNF QRP: (1) COVID-19 Vaccination Coverage Among Healthcare Personnel, and (2) COVID-19 Vaccine: Percent of Patients/Residents Who Are Up to Date. CMS estimates this change would result in an overall decrease of $8.3 million annually to SNFs beginning with the FY 2028 SNF QRP.
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