Medicare Proposes 2027 Tweaks for Nursing Home Payments
Published Date: 4/7/2026
Proposed Rule
Summary
Starting in fiscal year 2027, skilled nursing facilities will see updates to how Medicare pays them and how they report quality. These changes aim to improve care and make payments fairer, affecting facilities, patients, and Medicare budgets. Comments on the proposed rule are open until June 1, 2026, so stakeholders have time to weigh in before it’s finalized.
Analyzed Economic Effects
6 provisions identified: 2 benefits, 3 costs, 1 mixed.
FY2027 SNF Payment Increase
CMS proposes updates to the Skilled Nursing Facility (SNF) Prospective Payment System for FY 2027 that would increase aggregate Medicare payments to SNFs by an estimated $888 million during FY 2027. The proposed SNF market basket percentage increase is 3.2 percent before adjustments, with a proposed 0.8 percentage point productivity adjustment, yielding a net proposed update of 2.4 percent for FY 2027 (Oct 1, 2026–Sep 30, 2027).
SNF VBP Lowers FY2027 Payments
CMS estimates the Skilled Nursing Facility Value-Based Purchasing (SNF VBP) Program changes will reduce aggregate payments to SNFs by an estimated $203.41 million during FY 2027. That reduction is reflected in the overall FY 2027 financial impact on SNFs.
FY2027 Per-Diem Rates Set
CMS proposes FY 2027 unadjusted Federal per-diem rates (Oct 1, 2026–Sep 30, 2027). Urban per-diem amounts: PT $77.45, OT $72.09, SLP $28.92, Nursing $134.99, NTA $101.85, Non-case-mix $120.89. Rural per-diem amounts: PT $88.29, OT $81.09, SLP $36.44, Nursing $128.98, NTA $97.31, Non-case-mix $123.13.
MDS Submission for All Residents
CMS proposes to require SNFs to submit Minimum Data Set (MDS) data for every resident receiving covered skilled care regardless of the payer, beginning with the FY 2031 SNF QRP. CMS estimates this requirement would increase costs to SNFs by about $88 million annually beginning with FY 2031.
COVID-19 QRP Measures Removed
CMS proposes to remove 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 will decrease payments to SNFs by about $8.3 million annually beginning with FY 2028.
Hospital Wage Index Continues for SNFs
For FY 2027, CMS proposes to continue using the concurrent pre-floor, pre-reclassified IPPS hospital wage index (based on hospital cost reports beginning Oct 1, 2022 and before Oct 1, 2023) as the basis for the SNF wage index. CMS will use proxies where hospital data are missing (for FY 2027 the rural area without hospital wage data is North Dakota; the urban CBSA without data is CBSA 25980, Hinesville-Fort Stewart, GA).
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Key Dates
Department and Agencies
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