The Centers for Medicare & Medicaid Services (CMS) released the Fiscal Year 2027 (FY 27) Skilled Nursing Facilities (SNF) Prospective Payment System (PPS) final rule on July 29, 2026. This annual rule includes a payment update for FY 27 and changes to both the SNF Quality Reporting Program (QRP) and SNF Value-Based Purchasing (VBP) program. The full text of the rule is available here. Provisions of the rule are detailed below.

Payment Update

For FY 27, CMS finalized a 2.4% increase based on a 3.3% market basket update, less a 0.9% productivity adjustment. This rate is consistent with what was proposed, despite both the market basket and productivity adjustment being updated based on more recent IHS Global Inc. data than what was available when the rate was proposed. While LeadingAge, in our response to the rule called it “short of what is needed, given the current uncertain economic environment, and increased costs in critical categories including food, energy, and wages”—a sentiment expressed by other stakeholders as well—CMS maintains that the data used to set payment updates are based on the best available projections of input price inflations faced by SNFs in FY 27.

Requests for Information

Establishing a SNF-specific Wage Index. As in past years, CMS utilized the inpatient prospective payment system (IPPS) wage index as the basis for the SNF wage index in the absence of SNF-specific wage index. However, CMS requested feedback on data sources and methodologies that could be used to construct a SNF-specific wage index for potential use in future years. As a Request for Information (RFI), no actual changes were finalized in this rule; however, CMS summarized the comments, which will be considered by CMS as they explore development of a SNF-specific wage index.

Methodology for Quantifying and Addressing Case-Mix Creep Under the Patient-driven Payment Model. CMS discussed a concern about changes in case-mix indexes following the implementation of the Patient-driven Payment Model (PDPM), which CMS called “case-mix creep”. CMS discussed a framework they have developed to address case-mix creep and requested feedback on the framework for consideration in future rules. Being a RFI, no changes to PDPM related to case-mix creep were finalized in this rule; however, it is likely that this issue will be addressed in the FY 28 SNF PPS rule or other future rules. Comments received in response to this RFI will be considered by CMS for future rulemaking.

Advance Care Planning Future Measure Concept. CMS sought feedback in the proposed rule on the importance, relevance, appropriateness, and applicability of quality measure concepts related to advance care planning. An Advance Care Planning measure was initially included in the 2025 Measures Under Consider (MUC) List but was ultimately removed before being considered for post-acute settings. As an RFI on future measure concepts, no Advance Care Planning measures were finalized with this rule; however, CMS will consider the comments received in future development of any related measures.

SNF Quality Reporting Program

Measure Removal. CMS finalized removal of two measures from the SNF QRP beginning with FY 28: COVID-19 Vaccination Coverage Among Healthcare Personnel and COVID-19 Vaccine: Percent of Patients/Residents Who Are Up to Date. Data related to these two measures will no longer be used in calculating SNF QRP payment determinations beginning with SNF QRP FY 28, which is based on data reported in CY 2026. Accordingly, reporting of healthcare personnel COVID-19 vaccination status through the National Healthcare Safety Network (NHSN) would be voluntary beginning with CY 2026 (January 1, 2026) and reporting of resident COVID-19 vaccination status through the Minimum Data Set (MDS) would be voluntary effective FY 27 (October 1, 2026). Public display of these measures will end after the October 1, 2026 quarterly refresh of Nursing Home Care Compare.

CMS reminds providers that the rule does not prohibit providers from continuing to report vaccination status and “does not alter any separate documentation or reporting requirements such as those that may be required under 42 CFR 483.80.”

Revising Data Submission Deadlines. CMS finalized the revision of deadlines for submission of MDS data for the SNF QRP. Effective for SNF QRP FY 29, effective for data submissions beginning January 1, 2027, SNFs will be required to submit all data and data corrections by the 15^th day of the second month after the end of each quarter. CMS estimates that approximately 98% of MDS assessments are already submitted in this time frame and the shortened deadline means that CMS will be able to shorten the lag time between the reporting of data to CMS and the public display of data on Nursing Home Care Compare.

Noting that the SNF VBP also utilizes MDS data for two program measures, CMS finalized the revision of the snapshot dates by which providers must make any necessary changes to MDS data used to calculate these measures. These changes are outlined in greater detail below under SNF VBP.

All-Payer Data Collection. CMS proposes to expand SNF QRP to include MDS data for all SNF patients regardless of payer beginning with FY 31 SNF QRP. This means that SNFs will be required to submit MDS data for all SNF residents regardless of payer beginning with residents admitted on October 1, 2029. “All residents regardless of payer” includes any resident receiving skilled nursing facility care according to an adapted version of the definition of skilled services from the Medicare Benefits Policy Manual. Specifically, CMS proposes that SNFs would submit MDS data on residents regardless of payer source when all of the following four criteria are met:

• The resident is admitted to the SNF for covered skilled nursing services or skilled rehabilitation services. That is, services that must be performed by or under the supervision of professional or technical personnel as outlined in the Medicare Benefits Policy Manual Section 30.2 through section 30.4 and those services are ordered by a physician.
• The resident requires these services on a daily basis.
• The daily skilled services can be provided only on an inpatient basis in a SNF.
• The services delivered are reasonable and necessary for the treatment of a resident’s illness or injury. That is, are consistent with the nature and severity of the individual’s illness or injury, the individual’s particular medical needs, and accepted standards of medical practice, and are reasonable in terms of duration and quantity.

Accordingly, CMS will adjust the MDS to facilitate collection of this new data by modifying one MDS item to indicate when the assessments is being completed at admission for a non-Medicare Fee-for-Service patient and adding three new items to collect information on primary payers and start and end dates of non-Medicare Fee-for-Service patients.

CMS reminds SNFs that while data from all SNF residents regardless of payer will be required for SNF QRP measure calculation and avoiding the 2% annual payment update (APU) penalties, CMS will not use data from non-Medicare-FFS residents to adjust payment rates under the SNF PPS.

SNF Value-based Purchasing Program

Performance Standards. CMS is required to establish performance standards for the SNF VBP program for a given performance year. CMS finalized numerical performance standards for the FY 29 program year for two measures in the FY 26 SNF PPS year. In this FY 27 rule, CMS finalized performance standards for the remaining six FY 29 measures. CMS additionally provided the final numerical values for the FY 30 program year performance standards for the Discharge to Community – Post-Acute Care Measure for Skilled Nursing Facilities and Skilled Nursing Facility Within-Stay Potentially Preventable Readmissions measure. Estimated numerical performance standards values for the remaining FY 30 program year measures will be provided in the FY 28 SNF PPS proposed rule.

Additionally, due to finalization of the MDS data submission deadlines outlined above in SNF QRP, CMS finalized revision of the snapshot dates by which providers must submit any corrections to MDS data used to calculate SNF VBP measures. CMS revised snapshot dates to the 15^th day of the second month after the end of the period, aligning with SNF QRP MDS assessment data deadlines, for two measures: Falls with Major Injury (Long-Stay) and Discharge Function.