Skilled Nursing Facility (SNF) Final Rule for 2026

8/14/2025 - By Chris Biedal

Last week, CMS issued the final rule for the skilled nursing facility (SNF) prospective payment system (PPS) for the fiscal year 2026 update. Below are some of the key highlights of the final rule:

Reimbursement

  • An overall increase in Medicare Part A payments to SNFs of 3.2%, or approximately $1.16 billion, compared to FY 2025. This includes a SNF market basket increase of 3.3%, a 0.6% forecast error adjustment, less a 0.7% productivity adjustment.
  • The total adjustment for SNFs that are subject to Value Based Purchasing (VBP) adjustments are estimated to be $208.36 million for FY 2026.
  • Labor-related share of the case-mix adjusted rate changed from 72.0 to 71.9.
  • Changes to the base rate components are shown below

Value-Based Purchasing (VBP)

  • The Health Equity Adjustment (HEA) which was recently added during the FY 2024 Final Rule and would have gone into effect during FY 2027, has been eliminated.
  • The scoring methodology to the SNF Within-Stay Potentially Preventive Readmission (SNF WS PPR) that was in the proposed rule has been finalized, and the measure is set to take effect FY 2028. This will replace the SNF 30-Day All-Cause Readmission Measure (SNFRM).
  • A new reconsideration request process has been finalized, which will be implemented in FY 2027.

SNF Quality Reporting Program (QRP)

  • The four data elements that were added to the MDS under the social determinants of health (SDOH) in the FY 2025 SNF PPS Final Rule will be eliminated, effective for residents admitted on or after 10/1/2025.
    • Living situation (R0310)
    • Food (R0320A and R0320B)
    • Utilities (R0330)

ICD-10 Mapping

  • CMS finalized technical revisions to 34 ICD-10 codes, 33 of which were reassigned from “Medical Management” to “Return to Provider”, and 1 code will be changed from “Acute Neurologic” to “Medical Management”.

If you have questions regarding the proposed changes, contact the Saltmarsh Healthcare Consulting team.

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About the Author | Chris Biedal

Chris is a senior in the Healthcare Consulting practice of Saltmarsh, Cleaveland & Gund. His primary areas of focus include cost reporting, support in Medicaid and Medicare bad debt audits, Proof of Financial Ability preparation, process improvement and data analysis. Prior to joining Saltmarsh, Chris worked as a staff accountant for a large skilled-nursing facility chain where he prepared annual Medicare and Medicaid cost reports and conducted financial analyses for multiple facilities.

 

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