On April 11, 2025, CMS proposed a rule that would update policies and payment rates used under the Skilled Nursing Facility (SNF) Prospective Payment System (PPS) for FY 2026 (Proposed Rule). The Proposed Rule also proposes to update the SNF Quality Reporting Program (QRP), proposes several technical revisions to the code mappings used to classify patients under the Patient Driven Payment Model (PDPM), and updates to the Skilled Nursing Facility Value-Based Purchasing (SNF VBP) Program. Comments on the proposed rule are due by June 10, 2025.
Proposed Updates to SNF Payment Rates
As required by statute, the Proposed Rule would update the annual rates from the rates that CMS published for FY 2025. CMS proposes updating SNF PPS rates by 2.8% based on the proposed SNF market basket of 3.0%, plus a 0.6% market basket forecast error adjustment, and a negative 0.8% productivity adjustment. The increase equates to a cumulative $196.5 million. However, the increase is less than the increase in recent years.
Proposed Changes to the PDPM ICD-10 Code Mappings
In FY 2020, CMS implemented the PDPM to improve payment accuracy. The PDPM is meant to focus on the unique needs of each patient, rather than the volume of services provided. CMS proposes changes to the code mappings to update the rule to be consistent with the latest ICD-10 coding guidance.
Proposed Changes to the SNF VBP Program
For the SNF VBP Program, CMS proposes several operation and administrative changes. The SNF VBP program is a pay-for-performance program. The program rewards SNFs with incentive payments based on the quality of care provided to Medicare beneficiaries, measured by hospital readmissions. CMS withholds 2% of providers’ pay to fund the VBP program; nursing homes can earn that pay back if they hit specific benchmarks. The Proposed Rule states:
- CMS is providing estimated performance standards for the FY 2028 and FY 2029 program years to comply with the program’s statutory notice deadline.
- CMS is also proposing to finalize the scoring methodology codified at §413.338(e)(1) and § 413.338(e)(3) of CMS’s regulations to the Skilled Nursing Facility Within Stay Potentially Preventable Readmission (SNF WS PPR) measure beginning with the FY 2028 program year.
- CMS also proposes a reconsideration policy, to start in FY 2027, that would allow SNFs to seek reconsideration of a Review and Correction request if they do not agree with CMS’s decision, prior to the data becoming publicly available. CMS states in the Proposed Rule, “[t]he proposed reconsideration request process would align the SNF VBP Program with other CMS quality programs, including the Expanded Home Health Value-Based Purchasing (HHVBP) Model … to create a familiar policy experience for providers across CMS quality programs.”
- CMS proposes to remove the Health Equity Adjustment in order to “simplify the methodology and provide clearer incentives for SNFs as they seek to improve their quality of care for all residents.”
Proposed Changes to the SNF QRP Program
For the SNF QRP program, CMS proposes two updates. First, beginning with residents admitted on October 1, 2025, CMS is proposing to remove four standardized patient assessment data elements under the social determinants of health (SDOH) category, including one item for Living Situation, two items for Food, and one item for Utilities, for FY 2027. Second, CMS is also proposing to “amend the SNF QRP reconsideration policy to permit SNFs to request an extension to file a reconsideration request and to codify this proposed policy and process….”
CMS also includes three Requests for Information (RFIs) on the following:
- Future measure concepts for the SNF QRP, including the topics of delirium, interoperability, nutrition, and well-being;
- Potential revisions to the data submission deadlines for assessment data collected for the SNF QRP, to allow CMS to provide SNFs with more timely quality data; and
- Advancing digital quality measurement and the use of Fast Healthcare Interoperability Resources in SNFs.
Previous Request for Information (RFI)
CMS also includes in the Proposed Rule an RFI seeking input on opportunities to streamline regulations and reduce burdens on providers. This RFI has been previously published.
The Proposed Rule can be found here. The RFI seeking input on opportunities to streamline regulations and reduce burdens on providers can be found here.
Comments on the Proposed Rule must be submitted by June 10, 2025 (60 days after the date of filing for public inspection).
