The Medicare proposed rule was released in April 2026, and providers have until June 1, 2026 to submit comments and feedback to CMS. Given the breadth of the proposed changes, it is important for providers to understand the full scope of payment updates and the real-life operational impacts within their buildings.
Highlights of the Proposed Rule
The proposed rule includes a modest 2.4% increase (3.2% fiscal year (FY) 2027 Skilled Nursing Facility (SNF) market basket increase less productivity adjustment of a .8% point), which equates to an increase of $888 million.
The following table recaps the FY 2027 unadjusted federal rate per diem for rural and urban providers in the proposed rule, compared to the final federal rate per diem components for FY 2026.
FY 2027 Unadjusted Federal Rate Per Diem
| Area | PT | OT | SLP | Nursing | NTA | Non-Case-Mix |
|---|---|---|---|---|---|---|
| Urban | 77.45 | 72.09 | 28.92 | 134.99 | 101.85 | 120.89 |
| Rural | 88.29 | 81.09 | 36.44 | 128.98 | 97.31 | 123.13 |
FY 2026 Federal Rate Per Diem
| Area | PT | OT | SLP | Nursing | NTA | Non-Case-Mix |
|---|---|---|---|---|---|---|
| Urban | 75.73 | 70.49 | 28.28 | 132.00 | 99.59 | 118.21 |
| Rural | 86.33 | 79.29 | 35.63 | 126.12 | 95.15 | 120.40 |
Source: Federal Register, Prospective Medicare Rule Update
While these are modest rate increases, providers need to evaluate these increases alongside current cost pressures and operational and staffing challenges.
SNF Quality Reporting Program (QRP) Proposed Changes
The proposed rule outlines several proposed changes that would directly affect how facilities manage reporting timelines and internal monitoring processes.
CMS proposes updating the SNF QRP by removing two measures from the program. The two measures are COVID-19 Vaccination Coverage Among Healthcare Personnel (HCP) and the COVID-19 Vaccine: Percent of Patients/Residents Who Are Up to Date.
In addition, CMS is proposing a revision of the SNF QRP submission deadlines from 4.5 months after the end of each quarter to the 15th day of the second month after the end of the quarter (beginning with the QRP for FY 2029, which is based on minimum data set (MDS) data collected for calendar year 2027, making May 17, 2027 the first submission period impacted by this change). CMS stated that 97% of all MDS assessments were completed in that time frame.
A positive of this proposed revision is that it will allow for more timely posting of public information on these measures, which will significantly reduce current lag time.
To fully realize this benefit, providers will need to ensure that their teams are aware of the changes and are consistently monitoring and responding to their Threshold Reports, Correct and Review Reports, Validation Reports, and MDS 3.0 Nursing Home Error Detail Reports in a timely manner.
In addition to reporting timelines, CMS is signaling a broader shift in how quality data is collected. CMS notes its desire to standardize data collection across all residents, regardless of payer. With Medicare Advantage enrollment continuing to expand (it is currently estimated at 54% and projected to reach 64% by 2034), CMS believes that capturing data across all payers will provide a more accurate reflection of SNF quality.
Providers should be aware of the operational impacts and the additional effort required from staff to comply with this requirement. Each resident admitted or re-admitted to the facility will need to be reviewed to determine whether they meet the definition of skilled care under the proposed rule, which include the following four criteria:
- Admitted to SNF-covered skilled nursing or rehab services.
- Require skilled services on a daily basis.
- Services delivered are deemed to be reasonable and necessary for the treatment of the resident’s illness or injury.
- As a practical matter, the daily skilled services can be provided only on an inpatient basis in a SNF.1
Facilities will need to pay close attention to payer status as this definition is only part of the requirements that are examined for traditional Part A residents. CMS is proposing that SNFs submit MDS data on each resident receiving covered skilled care regardless of payer beginning with residents admitted on or after October 1, 2029.
MDS data will be required for submission on non-fee-for-service (FFS) skilled residents for admission and discharge, using the Nursing Home PPS and Nursing Home PPS Discharge assessments. To assist with this new process, CMS proposes modifying and adding elements to the current MDS. Routine monitoring of non-FFS skilled residents will need to be implemented to determine end dates for completion of the discharge assessments.
One thing that is remaining the same: there were no major changes to the Patient-Driven Payment Model (PDPM) ICD-10 code mappings in the proposed rule.
Closing Thoughts
CMS continuously monitors SNF data and case mix trends to determine the impact on case-mix results over time. CMS is asking for feedback from stakeholders on CMS-stated observations on case-mix creep as a result of the implementation of PDPM.
One concern that emerges is that many states have recently transitioned to PDPM for Medicaid reimbursement, often relying on the Medicare PDPM case-mix structure. If the PDPM model is revised, an important question becomes whether states will follow suit, and what downstream or trickle effects those changes could have for providers operating under Medicaid acuity models. While not an immediate change, this raises longer-term strategic considerations for providers operating under PDPM for both Medicare and Medicaid residents.
For many providers, these changes translate directly into increased coordination between clinical, reimbursement, and MDS teams at the building level. Providers should stay up to date on Medicare’s proposed rule, thoughtfully evaluate how the proposed changes may impact their operations, and consider submitting comments. In addition, providers can actively engage with their industry associations as they will be gathering feedback from their membership and submitting comments.
For more information or updates, please contact the Senior Living & Long-Term Care team at Forvis Mazars.
- 1 “Medicare Learning Network – SNF Billing Reference,” cms.gov, December 2018.