2025-06348Proposed RuleSignificantWallet

Nursing Homes' Medicare Rates and Reports Get 2026 Refresh

Published Date: 4/30/2025

Proposed Rule

Summary

Starting in fiscal year 2026, skilled nursing facilities (SNFs) will see updated payment rates and new rules for how Medicare pays them. The changes also tweak quality reporting and value-based programs to boost care and fairness. SNFs and Medicare users should watch for these updates, with feedback due by June 30, 2025, and potential impacts on payments and care quality.

Analyzed Economic Effects

6 provisions identified: 4 benefits, 2 costs, 0 mixed.

FY2026 SNF Payment Update: 2.8% Net Increase

For fiscal year (FY) 2026 (October 1, 2025 through September 30, 2026) the proposed SNF market-basket update net of forecast error and productivity adjustments is 2.8 percent. CMS proposes component per diem amounts for FY 2026 (examples: Urban PT $75.42, OT $70.20, Nursing $131.47; Rural PT $85.98, OT $78.96, Nursing $125.61). CMS estimates the overall aggregate effect is an increase of $997 million in payments to SNFs during FY 2026.

SNF VBP Program Payment Reductions

CMS estimates the SNF Value-Based Purchasing (VBP) Program changes will reduce aggregate payments to SNFs by $208.36 million in FY 2026 and by $207.99 million in FY 2027. The proposed rule also proposes estimated performance standards for FY 2028 and FY 2029 and would apply the Program's scoring methodology to the SNF Within-Stay Potentially Preventable Readmission (SNF WS PPR) measure beginning with the FY 2028 program year.

Changes to SNF QRP Reconsideration Process and Extension Cost

CMS proposes to amend and codify the SNF Quality Reporting Program reconsideration request policy and process, and estimates that permitting an extension to file a reconsideration request will increase costs to those SNFs requesting an extension by $2,391.90 annually.

Removal of Four SDOH Assessment Data Elements

Beginning with residents admitted on October 1, 2025 (for the FY 2027 SNF QRP), CMS proposes to remove four standardized patient assessment data elements in the social determinants of health (SDOH) category from the SNF Quality Reporting Program. CMS estimates this proposed removal would result in an overall decrease of $2,228,563.12 annually to SNFs beginning with the FY 2027 SNF QRP.

Removal of Health Equity Adjustment; New VBP Reconsideration Process

CMS proposes to remove the Health Equity Adjustment from the SNF VBP Program methodology to ‘simplify the methodology and provide clearer incentives,’ and to adopt a SNF VBP program reconsideration process that would allow SNFs to appeal CMS's decisions on review and correction requests beginning with the FY 2027 program year.

PDPM ICD-10 Mapping Technical Updates

CMS proposes technical revisions to the code mappings used to classify patients under the Patient Driven Payment Model (PDPM) to improve payment and coding accuracy. These updates are intended to change how certain diagnoses map to PDPM classifications.

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Key Dates

Published Date
Effective Date
4/30/2025
10/1/2025

Department and Agencies

Department
Independent Agency
Agency
Health and Human Services Department
Centers for Medicare & Medicaid Services
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