The Centers for Medicare & Medicaid Services (CMS) finalized its 2026 Skilled Nursing Facility Prospective Payment System (SNF PPS) rule, approving a net increase of 3.2%, or approximately $1.16 billion in Medicare Part A payments for next year.

It’s a jump compared to the proposed 2.8% increase released by CMS in April.

For fiscal 2026, this reflects a 3.3% SNF market basket update, a 0.6% adjustment for forecast error, and a negative 0.7% productivity adjustment.

It’s important to note too that these figures do not include reductions tied to the SNF Value-Based Purchasing (VBP) program, which will lower payments for some facilities, the federal agency said in a press release. In fiscal 2026, these VBP-related cuts are projected to amount to $208.36 million.

As a comparison, providers saw a 4.2% increase in reimbursement at the start of this fiscal year.

Clif Porter, American Health Care Association and National Center for Assisted Living (AHCA/NCAL) president and CEO, expressed appreciation for the net Medicare increase.

“This funding helps ensure that America’s nursing homes can continue to deliver the highest quality care to the growing population of aging seniors in need of post-acute care,” Porter said in an email to Skilled Nursing News. “As costs for goods, services, and labor continue to rise, skilled nursing providers rely on updates such as these to maintain critical services and invest in improvements.”

This proposed rule would not only change and update policies and payment rates used under the SNF PPS for fiscal 2026, but also aims to update the requirements for the SNF Quality Reporting Program (QRP) and SNF VBP.

CMS finalized a series of operational and administrative proposals within the SNF VBP, as part of the 2026 rule. One change involved statutorily required performance standards for program measures, while also removing the program’s Health Equity Adjustment from scoring methodology.

Previously finalized scoring methodology is being applied to the SNF Within-Stay Potentially Preventive Readmission (SNF WS PPR) measure starting in 2028, CMS said of SNF VBP updates. Performance standards for 2028 and 2029 will need to comply with the program’s statutory notice deadline, the agency said.

Another major change to SNF VBP: adopting a new reconsideration process that will allow SNFs to appeal the agency’s decisions for review and correction requests, prior to CMS making any affected data publicly available.

The SNF QRP has a similar change to its policy and process requests, allowing facilities to request an extension to file a request for reconsideration; the agency is also updating its bases on which it can grant a reconsideration request.

CMS is also removing four standardized patient assessment data elements from the Minimum Data Set (MDS) for residents admitted to nursing homes on or after Oct. 1, 2025 as part of SNF QRP updates. These are all under the Social Determinants of Health (SDOH) category, one item for ‘living situation,’ two items for ‘food’ and one item for ‘utilities.’

Finally, CMS summarized feedback it received on several requests for information included in the SNF PPS proposed rule, including future measure concepts on the topics of delirium, interoperability, nutrition and well-being.

Katie Smith Sloan, president and CEO of LeadingAge, applauded the new policies related to the SNF QRP reconsideration process and the introduction of an appeals option for SNFs to challenge, review and correct decisions before public data release.

“We are pleased to see that CMS finalized the following proposals … [These] bring helpful clarity and consistency to the process,” she said, noting as well that the removal of select SDOH data elements from the SNF Quality Reporting Program was “misaligned with the SNF setting and unnecessarily burdensome.”

CMS also provided feedback on revisions to the current data submission deadlines for assessment data, which allows the federal agency to provide facilities with more timely quality data, as well as an advancing digital quality measurement and the use of Fast Healthcare Interoperability Resources in the SNF QRP.

In addition, CMS implemented 34 final changes in the Patient-Driven Payment Model (PDPM) International Classification of Diseases (ICD-10) code mappings, in order to maintain consistency with the latest ICD-10-CM coding guidance.

Zahida Siddiqi contributed to the reporting.