What’s Coming to the SNF Industry in 2026: A Comprehensive Preview

As 2026 approaches, SNF administrators face a host of changes—spanning from reimbursement adjustments to reporting requirements, payment models, and program reforms. Staying ahead of these shifts is vital for ensuring compliant, efficient, and quality-driven care.

1. Medicare Reimbursement: A Modest Increase with Complex Components

Final Rule Highlights (FY 2026 SNF PPS)

• CMS finalized a 3.2% increase in SNF PPS payment rates, adding roughly $1.16 billion in Medicare Part A payments compared to FY 2025. This stems from a 3.3% market basket update, a 0.6% forecast error adjustment, and a 0.7% productivity cut.Centers for Medicare & Medicaid Servicesmednetconcepts.com

• The Value-Based Purchasing (VBP) program will still withhold 2% of payments, redistributing proceeds as performance incentives; the withholding may amount to around $208 million.Centers for Medicare & Medicaid Servicesmednetconcepts.com

What Was Proposed

• The original proposal had offered a 2.8% increase (3.0% basket, 0.6% forecast adjustment, 0.8% productivity reduction) before final adjustments.Centers for Medicare & Medicaid ServicesMcKnight'sAmerican Hospital Association

2. Updates to PDPM ICD-10 Code Mappings

CMS is finalizing 34 updates to ICD-10 code mappings within the Patient-Driven Payment Model (PDPM), aiming to improve the accuracy of diagnosis-based payment categorization.Centers for Medicare & Medicaid Servicesmednetconcepts.com

3. SNF Value-Based Purchasing (VBP) Revisions

Key Changes for FY 2026:

• Elimination of the Health Equity Adjustment in the VBP scoring methodology—a move toward elimination of variable pay based on equity metrics.

• New Reconsideration Process: SNFs can appeal CMS’ initial decisions before data are made public, offering an additional layer of review.

• Upcoming Readmission Measure: The "Within-Stay Potentially Preventable Readmission" (WS-PPR) measure is set to impact payments starting FY 2028.Centers for Medicare & Medicaid Servicesmednetconcepts.comappliedpolicy.com

4. SNF Quality Reporting Program (QRP) Shifts

Reporting Changes Beginning October 1, 2025:

• Removal of four Social Determinants of Health (SDOH) items from the MDS: “living situation,” two food-related questions, and “utilities.”Centers for Medicare & Medicaid Servicesmednetconcepts.com

More Flexibility and Proposals:

• Expanded reconsideration capabilities, including extensions and broader grounds for appeal.

• CMS is seeking input via RFIs on new QRP measures related to interoperability, nutrition, delirium, and well-being. Also under consideration: faster reporting deadlines (45 days vs. current 4.5 months) and digital quality measurement tools (like FHIR).Centers for Medicare & Medicaid ServicesAmerican Hospital Associationgetpowerback.comappliedpolicy.com

5. Strategic Implications for SNF Administrators

Area	What This Means
Financial Planning	While payments are increasing, productivity cuts and VBP withholds temper real gains—prepare for tighter margins.
Billing & Coding	Adjust workflows to align with updated ICD-10 mappings to capture accurate PDPM classifications.
Quality Strategy	Revamp approaches to VBP and QRP, given updated metrics and the removal of SDOH items.
Appeals Readiness	Use the new reconsideration process strategically—especially for public data and performance assessments.
Interoperability Focus	Monitor RFIs for future data reporting changes and invest early in digital readiness, including FHIR capabilities.

Final Thoughts

The 2026 calendar brings meaningful, multifaceted changes to SNFs—from payment bumps and coding updates to thoughtful revisions in quality and appeal processes. Administrators should:

• Revisit financial models to account for new payment structures and productivity adjustments.

• Refine documentation and coding practices to align with updated PDPM mappings.

• Reassess quality improvement plans with an eye on evolving VBP and QRP frameworks.

• Watch for upcoming CMS input requests (RFIs) and adapt digital infrastructure accordingly.