FY 2027 SNF Final Rule: What Changes for Your Facility

CMS issued the fiscal year (FY) 2027 Skilled Nursing Facility Prospective Payment System final rule, CMS-1843-F, on July 29, 2026. It was published in the Federal Register on July 31, 2026, and it took effect October 1, 2026. Trade groups described it as nearly identical to the spring proposal, so there are few surprises. Still, several pieces affect how your team reports data and how your quality scores are built over the next few years.

The Payment Update: 2.4 Percent

Medicare Part A rates for SNFs rise 2.4% for FY 2027. That figure is a 3.3% market basket increase minus a 0.9 percentage point productivity adjustment required by law. CMS estimates the update adds about $882.74 million in payments to SNFs nationally.

Your own number will differ because wage index and other adjustments vary by location. Hall Render's summary of the rule's impact tables puts hospital-based SNFs at about 2.9%, rural SNFs at about 2.7% and freestanding urban SNFs at about 2.3%.

Value-Based Purchasing: The Withhold Stays the Same

The SNF Value-Based Purchasing (VBP) program continues to withhold 2% of Medicare fee-for-service Part A payments and pay back 60% of that withhold as incentive payments based on performance. Commenters asked CMS to return a larger share. CMS declined.

CMS estimates the program will reduce Medicare spending on SNFs by about $203.6 million in FY 2027. That amount is separate from the 2.4% update. Facilities that score below average can see a net payment cut even while base rates go up.

The rule also:

• Sets performance standards for FY 2029 and FY 2030. These are the achievement thresholds and benchmarks your scores will be compared against. For FY 2030, CMS finalized numerical values for Discharge to Community and for the SNF Within-Stay Potentially Preventable Readmission measure. Values for the other FY 2030 measures will come in next year's proposed rule.
• Moves the "snapshot date" for two MDS-based measures. For Falls with Major Injury (Long-Stay) and Discharge Function Score, the cutoff for corrections moves earlier, to the 15th day of the second month after a period ends. This starts with FY 2027 data. After that date, CMS uses the data as it stands.

Quality Reporting: Shorter Deadlines, Broader MDS

Three Quality Reporting Program (QRP) changes matter most. Missing QRP requirements can still cost a facility 2 percentage points of its annual payment update, so these deserve attention now.

• COVID-19 measures removed. The two COVID-19 vaccination measures, one for healthcare personnel and one for residents, are removed starting with the FY 2028 QRP. LeadingAge reports that public display ends after the October 2026 Care Compare refresh.
• About 45 days to submit, not 4.5 months. Starting with the FY 2029 QRP, which uses calendar year 2027 data, MDS data and corrections are due by the 15th day of the second month after each quarter ends. CMS says most assessments already meet this window, but late corrections will no longer have months of cushion.
• MDS for all payers. Starting with the FY 2031 QRP, SNFs must submit MDS quality data for every resident receiving covered skilled care, regardless of payer. This applies to admissions and readmissions on or after October 1, 2029. CMS says it will not use the non-Medicare data to set PPS payment rates.

What CMS Asked About but Did Not Decide

CMS ran three requests for information. None of them changed policy this year, but they hint at future rules.

• PDPM case-mix growth. CMS described a possible framework for addressing case-mix index increases since the Patient Driven Payment Model began, including what it called upcoding. LeadingAge notes this could appear in the FY 2028 rule or later.
• Advance care planning measure. CMS asked for input on a possible future quality measure on advance care planning.
• SNF-specific wage index. CMS will keep using the hospital wage index for now while it studies alternatives.

What to Do This Quarter

These steps help leaders get ahead of the changes without waiting for the next rule.

• Check your rate impact. Ask your business office or billing partner to confirm what the October 1, 2026 rates mean for your Part A revenue, alongside your projected VBP adjustment.
• Test your MDS timelines. Have your MDS coordinators pull recent quarters and see how many assessments and corrections would have missed a 45-day window. Fix workflow gaps before January 2027 data starts counting.
• Review falls and discharge function documentation. Corrections for these two measures now have an earlier cutoff. Make sure section GG and falls entries are accurate the first time.
• Plan for all-payer MDS. Managed care and other non-Medicare skilled admissions will need full quality data starting October 2029. Start talking with your MDS team and software vendor about staffing and workload.
• Watch PDPM coding practices. With CMS openly studying case-mix growth, now is a good time for an internal review that coding matches the clinical record.

Readmission performance now carries weight in both VBP and long-term planning. A consistent daily risk screen, like the one Keystone builds from PointClickCare data, is one way teams catch changes in condition earlier and give their clinicians more time to act.

This article is general education for skilled nursing teams. Follow your facility's policies and the direction of your medical director and providers.