CMS Releases FY 2027 Skilled Nursing Facility PPS Proposed Rule: Key Compliance and Reimbursement Updates

On April , 2026, the Centers for Medicare & Medicaid Services (CMS) has issued the Fiscal Year (FY) 2027 Skilled Nursing Facility Prospective Payment System (SNF PPS) Proposed Rule, outlining several important payment, quality reporting, and compliance-related updates that could significantly affect skilled nursing facilities beginning October 1, 2026. (CMS)

Proposed Medicare Payment Increase

CMS is proposing a 2.4% increase in Medicare Part A SNF payments for FY 2027. The update is based on a projected 3.2% market basket increase, offset by a 0.8% productivity adjustment. While the proposed increase may provide some financial relief to facilities facing rising labor and operational costs, CMS noted that Value-Based Purchasing (VBP) payment adjustments could still reduce payments for certain providers. (CMS)

Changes to the SNF Quality Reporting Program (QRP)

CMS is proposing several notable modifications to the SNF Quality Reporting Program:

• Removal of two COVID-19 vaccination-related measures from the QRP beginning in FY 2028.
• Shortened data submission deadlines to improve the timeliness of publicly reported information on Care Compare.
• A new proposal requiring SNFs to submit Minimum Data Set (MDS) information for all residents receiving covered skilled care, regardless of payer source. 

These proposed changes may increase documentation and reporting responsibilities for facilities, particularly those managing residents under Medicare Advantage or other non-traditional payment arrangements.

SNF Value-Based Purchasing (VBP) Program Updates

CMS is also proposing updates to the SNF Value-Based Purchasing Program, including estimated performance standards for FY 2029 and FY 2030. In addition, CMS plans to revise certain “snapshot dates” used to calculate MDS-based quality measures to align with proposed QRP submission timelines. (42 CFR § 413.338(f)(1)(v))

Facilities should review their current quality measure performance and ensure MDS accuracy, as reimbursement continues to be increasingly tied to quality outcomes and data integrity.

Compliance Considerations for Skilled Nursing Facilities

The proposed rule reinforces CMS’s continued focus on:

• Accurate MDS coding and documentation
• Timely quality reporting
• Transparency in publicly reported quality measures
• Alignment between reimbursement and resident outcomes

Compliance teams, MDS coordinators, and administrators should begin assessing operational workflows now to prepare for possible implementation of expanded reporting obligations and revised submission deadlines.

CMS is accepting public comments on the proposed rule through June 1, 2026. (Federal Register)

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