As part of the federal annual rulemaking process, Centers for Medicare & Medicaid Services (CMS) has published the FY 2027 Skilled Nursing Facility (SNF) Proposed Rule. This year there were no major surprises, but CMS did include requests for stakeholder input. HealthPRO is highly recommending that the IDT discuss the overview below and assemble comments to reply to CMS regarding this proposed rule. The following brief summary of the proposed rule’s key impacts on SNF operations and the importance of stakeholder engagement in the response process.
Key Highlights & Why They Matter
- Proposed 2.4% Payment Increase
CMS is proposing a modest market basket payment update for FY 2027 (3.2%), impacted by an efficiency update or better known as productivity adjustment (-0.8%). Providers should be aware that the payment increase will not factor in potential Value-Based Purchasing (VBP) reductions, meaning performance will continue to directly impact revenue.
- PDPM Model Unchanged
No major changes to the Patient-Driven Payment Model (PDPM) are proposed this year. This provides short-term stability for therapy delivery and reimbursement.
- Why it matters: While there are no immediate changes, CMS signaled future adjustments as they continue to see “case mix creep” as noted below. Maintaining strong documentation oversight and accurate coding is critical.
- Do your HIPPS codes reveal “Case-Mix Creep”
CMS has been tracking the SNF reporting of certain conditions including depression indicators, swallow disorders and diagnoses such as malnutrition since the inception of PDPM. Noted patterns have been discovered through increased % of occurrence, yet not seeming to represent underlying health status trends.
- Why it matters and Call to Action: This could lead to future payment reductions. Accurate, compliant documentation will be essential to mitigate risk. CMS issued a Request for Information in order to receive feedback from stakeholders on its observations of case-mix creep in PDPM and of their approach to addressing it.
- All-Payer MDS Reporting (Future Requirement)
CMS is proposing to expand Minimum Data Set (MDS) reporting to include all payer types for skilled stays. Now is the time for providers to share their opinion with CMS about this suggested change.
- Why it matters: MDS submissions for both traditional Medicare patients as well as Medicare Advantage patients can be a game changer. Equity in benefit access for beneficiaries between the two types of insurance has great potential under this adopted process change. Although, this could increase reporting requirements and operational complexity, requiring early preparation and process alignment.
- QRP (Quality Reporting Program) Submission Timelines Shortened. Beginning with FY 2029 CMS is proposing to decrease the submission allowance time for data that will impact Quality Reporting measure. Providers will need to complete data submissions and make corrections to their MDS assessment data no later than the 15th day of the second month after the end of the calendar quarter.
- Why it matters: Facilities will need more efficient workflows to ensure timely and compliant data submission to avoid penalties and aim for full annual payment update awards. Recommend: Ongoing monitoring of individual cases that trigger for QRP measures to confirm accuracy of coding.
- Retired and Introduced QRP Measures
CMS is proposing to remove the HCP and patient/resident COVID-19 vaccination measures. Additionally, CMS is in requesting stakeholder feedback on what aspects of advance care planning are most relevant to the SNF setting and what measures would be appropriate to capture it. Please share your thoughts with CMS!
- Why it matters: Care planning is the focal point of the RAI process. The ability to have a voice and input with decision making allows the SNF world to bring light to the complexities of post-acute and long-term care. Quality metrics continue to evolve and will impact both compliance and public reporting.
- Continued Evolution of VBP Measures
CMS provided an estimated cost and benefits of the VBP program from FY27 – FY31. In this proposal is an updated review and correction policy for measures calculated with MDS assessment data. As well a proposed update to the “snapshot date” for the DC Function and Falls with Major Injury measures that are calculated using MDS assessment data to maintain alignment with proposed SNF QRP submission deadlines for MDS assessment data, beginning with FY 2027 data.
- Why it matters: Escalated timeframes for accurate assessment submission translates to the need for seamless IDT processes to communicate findings and confirm coding items. Outcomes, including function and falls, remain key drivers of financial performance.
Bottom Line
Despite relative stability in FY 2027 per the SNF proposed rule, CMS is clearly advancing future reimbursement priorities focused on PDPM accuracy, quality outcomes, and reporting. Early, proactive preparation will be key to long-term success.
Providers have until June 1, 2026 to send comments to CMS on this proposed rule.
Please use the following email or snail mail address to send comments on the proposed rule: http://www.regulations.gov
or
Centers for Medicare & Medicaid Services,
Department of Health and Human Services,
Attention: CMS-1843-P,
P.O. Box 8016,
Baltimore, MD 21244-8016
Please reach out to our clinical team to provide MDS, QRP and VBP solutions or additional insight into the impacts for FY2027 and beyond.