CMS is running a new quality data validation program that could quietly cut Medicare payments for thousands of nursing homes — and many facilities don’t even know the clock is already ticking.
Roughly 1,500 skilled nursing facilities — about 10% of the nearly 15,300 certified nursing homes that participate in federal reimbursement programs — have been selected for the first rounds of the agency’s new Quality Reporting Program (QRP) audits. The audits, which began with notifications in mid-January 2026, are designed to verify the accuracy of quality measure data that CMS uses to assess facility performance and determine payments.
What’s actually being audited
The data validation process focuses on minimum data set (MDS) submissions, with particular scrutiny on Section GG — the functional status measures tracking self-care and mobility at admission and discharge — as well as skin assessments and wound measures.
Selected facilities receive an initial notification through iQIES, the agency’s online quality reporting platform. Some may also get a certified letter, particularly when audits involve schizophrenia-related diagnoses. The notice includes the list of residents selected and a submission deadline.
From there, facilities have just five business days to begin responding and 45 calendar days from the date the initial notice was posted in iQIES to submit all required documentation. That’s not 45 days from when a facility logs in and sees the notification — it’s from when CMS posted it.
“Regular monitoring of iQIES is essential,” said Alicia Cantinieri, managing director of clinical reimbursement and regulatory compliance at Zimmet Healthcare Services Group.
All-or-nothing compliance
The penalty structure has a sharp edge. Fail to respond — or submit even one fewer record than required — and a facility is considered noncompliant.
CMS may request up to 10 resident records per facility. Submit nine and you’re still out of compliance. The penalty for noncompliance: a 2% reduction in the annual payment update for the affected fiscal year.
“For noncompliance, that is not responding to the validation audit record request within 45 days, SNFs will lose 2% off the annual payment update for the affected fiscal year,” said Joel VanEaton, executive vice president of PAC regulatory affairs and education at Broad River Rehab. With the 2027 annual payment update currently proposed at 2.4%, that 2% cut would wipe out nearly all of the raise.
Beyond payment cuts, hybrid quality measures — like antipsychotic use rates — could also trigger star rating downgrades for facilities that don’t comply.
What documentation is required
CMS is asking for calendar year 2025 data, covering October 1 through September 30, 2025. The agency’s submission instructions run several pages and specify exactly which documents are required for each MDS assessment type, how files must be named, how records must be ordered and bookmarked, and how the full package must be formatted.
The CMS contractor overseeing the process is Healthcare Management Solutions, according to industry reports.
Chelsea Lowe, who outlined the audit process during a recent webinar, said reviewers will focus on sampled MDS submissions. Auditors check against medical records, looking at whether what’s documented in the MDS actually matches what’s in the chart. One key compliance risk: insurance enrollment status, which may not always be visible to clinical or billing staff.
What facilities should do now
Experts advise checking iQIES immediately under the “My Reports” section — specifically the MDS 3.0 Provider Review Records folder. If a selection notice is already there, the 45-day window may be running.
The urgency is real. Nursing homes that have already faced star rating consequences tied to staffing data audits understand how quickly compliance errors can cascade into financial and reputational damage. This new round of quality measure audits raises the stakes even further — with payment cuts that could outpace this year’s rate increase.
