CMS' FY 2026 SNF Proposed Rule

April 30, 2025-- On April 11, 2025, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule, the Medicare Program: Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities; Updates to the Quality Reporting Program for Federal Fiscal Year 2026 to update Medicare payment policies and rates for skilled nursing facilities under the Skilled Nursing Facility Prospective Payment System (SNF PPS) for fiscal year (FY) 2026. The proposed rule is set to publish on 4/30/25. CMS has a legal requirement to update Medicare payment policies for SNFs annually. Some key proposed updates:

SNF PPS Rate Update:

• CMS proposes a 2.8% overall increase in SNF payment rates for FY2026, which breaks down to:

• This is estimated to result in $997 million in increased payments (not including reductions under the VBP program).
  
• For context: SNFs received a 4.1% net increase in Medicare Part A payments in FY2025.
  
• VBP Impact: CMS estimates $196.5 million in FY2025 reductions for SNFs affected by Value-Based Purchasing penalties.

ICD-10 Code Mapping Updates

• 34 ICD-10 codes are proposed to be reassigned to better reflect clinical appropriateness under PDPM, with the goal of improved accuracy and consistency of primary diagnoses used during SNF Part A stays.
  

Most changes fall under Medical Management > Return to Provider.

Quality Reporting Program (QRP)

CMS Proposals:

• Remove four social determinants of health (SDOH) data elements starting FY2027:
  
  • 1 item on Living Situation
    
  • 2 on Food
    
  • 1 on Utilities
    
• CMS rationale is that the current reporting is burdensome and aims to reintroduce in a future low-burden, interoperable electronic system.
  
• CMS also seeks to amend the reconsideration request policy finalized in FY2016, updating conditions under which reconsiderations can be granted.
• Requests for Information (RFIs):
  • ‍New QRP measure concepts: interoperability, nutrition, well-being, and delirium.
  • Deadline Change: Feedback requested on shortening the final data submission deadline from 4.5 months to 45 days.
  • ‍Digital Quality Measurement: Exploring increased use of digital tools for quality data collection.

Value-Based Purchasing (VBP) Program

CMS Proposals:

• Remove the Health Equity Adjustment from VBP scoring beginning with the FY2024.
  
• Apply VBP scoring to SNF Within Stay Potentially Preventable Readmissions (WS PPR) starting FY2028.
  
• Introduce a reconsideration process for SNFs beyond the current review and correction steps:
  
  • Must first submit a valid correction request.
  • If denied, SNFs will have 15 calendar days to file reconsideration via email.

Request for Information

• CMS is also seeking input on which Medicare rules are overly burdensome and could be revised or removed to ease provider compliance.

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Powerback will continue to provide updates on the SNF proposed rule as additional information becomes available.

CMS Fact Sheet

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