Health Law Daily Wrap Up, SKILLED NURSING FACILITIES—FINAL RULES: $882M SNF aggregate payment increase, changes to quality reporting for FY 2027, (Jul 31, 2026)

By WK Editorial Staff

CMS finalized a 2.4 percent payment rate update for skilled nursing facilities and adopted changes to quality reporting and value-based purchasing requirements for FY 2027.

CMS finalized updates to Medicare payment policies and rates for skilled nursing facilities (SNF) under the Skilled Nursing Facility Prospective Payment System (SNF PPS) for fiscal year (FY) 2027. The final rule addresses Medicare payment rates, revisions to the Skilled Nursing Facility Quality Reporting Program (SNF QRP), updates to the Skilled Nursing Facility Value-Based Purchasing (SNF VBP) Program, and a request for information concerning potential changes to the Patient Driven Payment Model (Final rule, 91 Fed. Reg. 48588 (July 31, 2026)).

Payment updates. CMS finalized a 2.4 percent update to SNF PPS payment rates for FY 2027. The agency calculated the update using a final SNF market basket increase of 3.3 percent, offset by a 0.9 percent productivity adjustment. CMS estimated that the update will increase aggregate payments to SNFs by approximately $882.74 million.

Quality reporting changes. The final rule also makes several changes to the SNF Quality Reporting Program (see CMS plans to increase payments to SNFs by 2.4 percent for FY 2027 (Apr. 8, 2026)). CMS finalized the removal of two COVID-19-related quality measures beginning with the FY 2028 SNF QRP. The first measure is the COVID-19 Vaccination Coverage Among Healthcare Personnel measure. The second measure is the COVID-19 Vaccine: Percent of Patients/Residents Who Are Up to Date measure. CMS determined that these measures will no longer be included in the program beginning in FY 2028.

CMS also finalized a significant change to the timing of quality data submissions. Beginning with the FY 2029 SNF QRP, the agency will shorten the data submission timeframe from 4.5 months to approximately 45 days. CMS explained that the revised timeline is intended to reduce the period between data submission and public reporting. According to the agency, the shorter reporting cycle will reduce reporting delays by as much as three months, allowing consumers and their families to access more current quality information. CMS also stated that SNFs will benefit from earlier access to data, which may support facility quality improvement efforts and initiatives. CMS’ rationale for the change is to improve the timeliness and usefulness of quality data for both the public and providers.

Another major revision involves Minimum Data Set (MDS) reporting requirements. CMS finalized a requirement that all SNFs submit MDS data for all residents who receive covered skilled care, regardless of payer source. CMS explained that the change is intended to improve the accuracy of information concerning SNF quality of care and maintain the relevance of program data for providers and consumers. The agency noted that the requirement aligns the SNF QRP with other post-acute care settings and CMS programs that already collect patient data without regard to payer status.

The final rule also addresses future quality measurement through a request for information focused on advanced care planning (ACP). CMS sought public input regarding ACP as a potential measure topic for future inclusion in the SNF QRP. The agency described ACP as an ongoing process involving discussion and documentation designed to ensure that a patient’s care and interventions reflect that patient’s beliefs, values, and preferences if the patient later becomes unable to make decisions independently. The agency did not adopt a new ACP measure but identified the topic as an area of interest for future consideration.

VBP changes. CMS also noted the financial effects of the SNF VBP Program. The agency estimated that certain SNFs subject to net payment reductions under the program will experience an aggregate reduction of approximately $203.60 million in FY 2027. CMS noted that these adjustments are not incorporated into the impact estimates associated with the FY 2027 payment rate update.

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