Medicare tweaks nursing home pay rates for 2027.
Published Date: 7/31/2026
Rule
Summary
Starting October 1, 2026, skilled nursing facilities (SNFs) will see updated payment rates and new rules for how Medicare pays them. The Quality Reporting and Value-Based Purchasing programs are also getting tweaks to help improve care. These changes affect SNFs nationwide and could impact how much money they get and how they report quality data.
Analyzed Economic Effects
7 provisions identified: 2 benefits, 3 costs, 2 mixed.
2.0‑Percentage‑Point Penalty For Missing Data
SNFs that fail to submit required Quality Reporting Program (QRP) data for a fiscal year will receive a 2.0 percentage point reduction to their market basket update for that FY. This 2.0 percentage point reduction is applied after the productivity adjustment and applies only to the FY involved.
FY2027 SNF Payment Update Finalized
Starting October 1, 2026, Medicare updates the Skilled Nursing Facility (SNF) prospective payment rates for FY 2027. CMS finalized a 2022-based SNF market basket growth rate of 3.3 percent and applied a 0.9 percentage point productivity adjustment, resulting in a net FY 2027 market-basket update of 2.4 percent to the Federal per diem rates.
MDS Submission Required For All Residents (By FY2031)
CMS finalized a requirement that SNFs submit Minimum Data Set (MDS) data on every resident admitted for covered skilled care, regardless of the resident's payer, beginning with the FY 2031 SNF QRP. SNFs will need to report MDS assessments for all covered skilled residents starting with that program year.
SNF VBP Standards and MDS Alignment Updated
CMS finalized Skilled Nursing Facility Value-Based Purchasing Program updates including final performance standards for the FY 2029 and FY 2030 program years, revisions to the review-and-correction policy for measures calculated with MDS assessment data, and a revised 'snapshot date' for two MDS‑based measures to align with the QRP submission deadline changes beginning with FY 2027 data.
Two COVID Vaccination Measures Removed
Beginning with the FY 2028 SNF Quality Reporting Program, CMS will remove two measures: the COVID-19 Vaccination Coverage Among Healthcare Personnel measure and the COVID-19 Vaccine: Percent of Patients/Residents Who Are Up to Date measure. These measures will no longer be part of SNF QRP reporting starting in FY 2028.
QRP Data Submission Deadline Shortened
CMS changed SNF QRP data submission deadlines: beginning with the FY 2029 SNF QRP, data currently due 4.5 months after the end of each quarter must instead be submitted by the 15th day of the second month after the end of the quarter. This move accelerates the deadline for submitting QRP data.
Wage Index Methodology Continued
For FY 2027, CMS will continue to base the SNF wage index on the concurrent pre‑reclassified Inpatient Prospective Payment System (IPPS) hospital wage data (without occupational mix, rural floor, or outmigration adjustments), using hospital cost report data for periods beginning on or after October 1, 2022 and before October 1, 2023 (FY 2023 cost report data).
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