On April 1, CMS released the proposed rule for skilled nursing facility (SNF) payments for FY 2026. Under the proposed rule, SNF payments would increase by 2.8% for FY 2026. This includes hospital market basket percentage would increase by 3.0%, with a 0.8% reduction for productivity, and 0.6% increase for a market basket forecast error adjustment. The update is lower than last year’s update of 4.6%. The American Health Care Association lauded the increase while also warning Congress that this increase wouldn’t make up for proposed Medicaid reform this year. CMS estimates that the overall economic impact of this proposed rule is an estimated increase of $997 million in payments to SNFs for FY 2026. Comments on the rule are due June 10, 2025.
PAYMENT UPDATES
The final case-mix adjusted rates (pp. 21-22 of the rule) can be found here.
CMS also released new wage index tables for FY2026 – they can be found here.
PROPOSED CHANGES IN PATIENT-DRIVEN PAYMENT MODEL (PDPM) ICD-10 CODE MAPPINGS
In FY 2020, CMS implemented the Patient-Driven Payment Model (PDPM) to focus on the needs of the whole patient, rather than focusing on the volume of services provided. CMS is proposing several changes to the PDPM ICD-10 code mappings
Interestingly, a large portion of these codes are for behavioral/mental health disorders – that have been moved off the primary diagnosis list because “treatment for these diagnoses would typically occur on an outpatient basis and not require an inpatient SNF stay in and of themselves. as reasons for a SNF admission.
SNF VALUE-BASED PURCHASING (VBP) PROGRAM
As CMS has done in all other payment rules, CMS is proposing to remove the SNF VBP Program’s Health Equity Adjustment from the VBP methodology beginning in FY 2027.
CMS also released the performance standards for the remaining VBP measures for FY 2028.
SNF QUALITY REPORTING PROGRAM (QRP)
Aligning with changes the new Administration is making on equity and social determinants of health in all proposed rules, CMS is proposing to remove four standardized patient assessment data elements beginning in FY 2027, including: one item for Living Situation (R0310); two items for Food (R0320A and R0320B); and one item for Utilities (R0330). CMS has stated that removing these reporting requirements will save SNFs $2,228,563.12 annually. SNFs will not be required to collect this data beginning with patients admitted on or after October 1, 2025.
CMS also seeks input on several RFIs, specifically: 1) future measure concepts on the topics of delirium, interoperability, nutrition, and well-being; 2) revisions to the current data submission deadlines for assessment data from 4.5 months to 45 days; and 3) advancing digital quality measurement and the use of Fast Healthcare Interoperability Resources® in the SNF QRP. For the latter, a detailed list of questions starts on page 59 of the rule.
FEEDBACK
CMS is also asking for input on many aspects of the rule from stakeholders. Below we highlight some of their requests for feedback:
- For the overall Medicare program, CMS is putting out an RFI asking stakeholders to identify areas that are redundant or burdensome in Medicare regulations, including in conditions of participation, value-based purchasing, quality and safety reporting, telehealth and digital health. The deadline for comments is June 10, 2025.
- For SNF quality, CMS would like feedback on RFIs on:
- Future measure concepts for the SNF QRP;
- Potential revisions to the data submission deadlines for assessment data collected for the SNF QRP; and
- Advancing digital quality measurement in SNFs.