Fiscal Year (FY) 2027 Skilled Nursing Facility Prospective Payment System Proposed Rule (CMS 1843-P)

Fiscal Year (FY) 2027 Skilled Nursing Facility Prospective Payment System Proposed Rule (CMS 1843-P)

On April 2, 2026, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule for updates to Medicare payment policies and rates for skilled nursing facilities under the Skilled Nursing Facility (SNF) Prospective Payment System (PPS) for fiscal year (FY) 2027. CMS is publishing this proposed rule consistent with the legal requirements to update Medicare payment policies for SNFs annually. This fact sheet discusses the provisions of the proposed rule.

The SNF Quality Reporting Program (QRP) is a pay-for-reporting program. SNFs that do not meet reporting requirements are subject to a two-percentage point reduction in their Annual Payment Update. Additionally, measures adopted into the SNF QRP are publicly reported on the Care Compare tool at Medicare.gov . For the SNF QRP, CMS is proposing the removal of two COVID-19 measures, revising the data submission deadline, and requiring the submission of Minimum Data Set (MDS) data on all SNF residents receiving covered skilled care in a SNF, regardless of payer. CMS is also seeking feedback on two Requests for Information (RFI).

The SNF Value-Based Purchasing (VBP) Program is a pay-for-performance program. CMS withholds 2% of SNFs' Medicare fee-for-service (FFS) Part A payments to fund the SNF VBP Program. This 2% is referred to as the "withhold." CMS is then required to redistribute between 50% and 70% of this withhold to SNFs as incentive payments depending on their performance in the program. CMS applies incentive payments prospectively to all Medicare FFS Part A claims paid under the SNF PPS for the applicable Program year (beginning October 1). For the SNF VBP, CMS is providing estimated performance standards for the FY 2029 and FY 2030 program years and proposing an update to the program's "snapshot date" for two measures that are calculated using MDS assessment data to maintain alignment with proposed SNF QRP submission deadlines for MDS assessment data.

FY 2027 Proposed Updates to the SNF Payment Rates

For FY 2027, CMS proposes updating SNF PPS rates by 2.4% based on the proposed SNF market basket of 3.2%, and a negative 0.8% productivity adjustment. Note that these impact figures do not incorporate the SNF VBP reductions for certain SNFs subject to the net reduction in payments under the SNF VBP. The SNF VBP adjustments are estimated to total $208.4 million in FY 2026.

FY 2027 Proposed Updates to the SNF QRP

CMS is proposing to remove two measures from the SNF QRP, beginning with the FY 2028 SNF QRP. They are:

• The COVID-19 Vaccination Coverage among Healthcare Personnel measure, and
• The COVID-19 Vaccine: Percent of Patients/Residents Who Are Up to Date measure.

CMS is also proposing to revise the timeframe for data submission from 4.5 months to no later than the 15th day of the second month after the end of the calendar quarter beginning with the FY 2029 SNF QRP. This shortened data submission timeframe would reduce the lag in public reporting by up to three months resulting in more timely public reporting of data for consumers and their families.

In addition, CMS is proposing to require the submission of MDS data on all SNF residents receiving covered skilled care in a SNF, regardless of payer. This would align the SNF QRP with other post-acute care settings and CMS programs that already collect data on all patients regardless of payer.

FY 2027 SNF VBP

For the SNF VBP Program, CMS is providing estimated performance standards for the FY 2029 and FY 2030 program years to comply with the Program's statutory notice deadline. CMS is also proposing to update the "snapshot date" codified at 42 CFR § 413.338(f)(1)(v) for two measures that are calculated using MDS assessment data to maintain alignment with the newly proposed SNF QRP submission deadlines for MDS assessment data, beginning with FY 2027 data.

FY 2027 SNF QRP RFI

CMS is seeking feedback on one potential measure topic that CMS is considering adopting in future years for the SNF QRP: Advanced care planning (ACP). ACP is a continuous process of conversation and documentation to align a patient's care and interventions with their beliefs, values and preferences, in the event they become unable to make those decisions.

Updating the Patient Driven Payment Model (PDPM) payment system to address Case Mix Upcoding RFI

This RFI focuses on potential updates to the PDPM payment system as part of a broader effort to ensure that payment policy reflects current care practices and changes in the SNF resident population. The RFI also focuses on how CMS could address observed Case Mix Upcoding.

The SNF Final Payment Rule can be viewed on the Federal Register at: https://www.federalregister.gov/d/2026-06674 .

Information on the SNF VBP is available at: https://www.cms.gov/medicare/quality/nursing-home-improvement/value-based-purchasing .

Information on the SNF QRP is available at: https://www.cms.gov/medicare/quality/snf-quality-reporting-program .

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