Health Law Daily Wrap Up, SKILLED NURSING FACILITIES—FINAL RULES: CMS issues Final Rule for FY 2026 skilled nursing facility payment rates and programs, (Aug 4, 2025)
Organizations Mentioned:Centers for Medicare & Medicaid Services
By WK Editorial Staff
CMS issues final rule for FY 2026 Skilled Nursing Facility payment rates, implementing updates to Medicare payment policies, SNF Value-Based Purchasing Program, and Patient-Driven Payment Model ICD-10 code mappings.
The Centers for Medicare & Medicaid Services (CMS) recently released the final rule for fiscal year (FY) 2026, outlining updates to Medicare payment policies for skilled nursing facilities (SNFs) under the Skilled Nursing Facility Prospective Payment System (SNF PPS). The agency's goal is to ensure accurate and appropriate payment rates for SNFs on an annual basis (Final Rule, 90 Fed. Reg. 37310 (Aug. 4, 2025)).
Updates to SNF Payment Rates. CMS is implementing a 3.2% increase in SNF PPS rates for FY 2026, totaling $1.16 billion compared to FY 2025 payments. This adjustment includes a 3.3% market basket update, a 0.6% market basket forecast error adjustment, and a -0.7% productivity adjustment. However, it's important to note that these figures do not factor in SNF Value-Based Purchasing (VBP) reductions, estimated at $208.36 million in FY 2026.
Changes to Patient-Driven Payment Model (PDPM) ICD-10 Code Mappings. To enhance payment accuracy and appropriateness, CMS is finalizing 34 changes to the PDPM ICD-10-CM code mappings. These adjustments aim to ensure providers can assign more precise primary diagnoses that meet skilled intervention criteria during a Part A SNF stay. The updates align with the latest ICD-10-CM coding guidance.
Skilled Nursing Facility Value-Based Purchasing (VBP) Program. The SNF VBP Program is a pay-for-performance initiative where CMS withholds 2% of SNFs' Medicare fee-for-service Part A payments. This withhold is then redistributed to SNFs based on their performance in the program, with incentive payments applied prospectively to Medicare fee-for-service Part A claims. CMS is making operational and administrative updates to the program, including setting performance standards for Program measures and introducing a new reconsideration process.
Skilled Nursing Facility Quality Reporting Program (QRP). The SNF QRP is a pay-for-reporting program that penalizes SNFs failing to meet reporting requirements with a 2% reduction in their Annual Payment Update. CMS is removing four standardized patient assessment data elements from the Minimum Data Set (MDS) under the Social Determinant of Health category for residents admitted on or after October 1, 2025. Additionally, CMS is amending the reconsideration request policy and process for SNFs.
Seeking Input on Regulatory Streamlining. CMS is soliciting public feedback on ways to streamline regulations and reduce administrative burdens for Medicare program participants. Interested parties can submit comments through a Request for Information (RFI) available on the CMS website until September 15, 2025.
FederalRegisterIssuances: FinalRules CMSNews PaymentNews QualityNews SNFNews FedTracker HealthCare