CMS Proposes 2.4% Medicare Rate Hike for Nursing Homes in 2027 — and Operators Are Already Doing the Math

Baltimore, Maryland — The federal government’s healthcare agency moved Thursday to increase Medicare reimbursement for skilled nursing facilities by 2.4% next year, a development that’s drawing cautious optimism from nursing home operators who’ve spent months bracing for worse.

The Centers for Medicare and Medicaid Services released its proposed Skilled Nursing Facility Prospective Payment System rule for fiscal year 2027, signaling a modest but meaningful uptick in payments. The net increase reflects a proposed market basket adjustment of 3.2%, trimmed by a 0.8% productivity reduction. Value-based purchasing adjustments weren’t factored into the headline figure — those reductions are estimated separately at $208.4 million for 2026.

For an industry that’s been squeezed from every direction — rising labor costs, Medicaid underfunding, and payer mix shifts — a positive Medicare rate signal matters. Skilled nursing facilities rely heavily on Medicare for short-term rehabilitation stays, and even small swings in the per-diem rate can move the needle on thin operating margins.

Quality Reporting Changes on the Table

The proposed rule also includes changes to the SNF Quality Reporting Program. CMS is looking to drop two COVID-related measures starting in 2028: vaccination coverage among health care workers and the share of residents current on COVID vaccines. Both measures date to the pandemic era and officials said they’ve run their course as standalone tracking tools.

The agency is also exploring a potential new measure for future years: advanced care planning. That’s still in the feedback stage — CMS is asking providers and other stakeholders to weigh in before anything gets formalized.

On the data side, CMS wants to tighten the timeframe for Quality Reporting Program submissions. Under the current setup, facilities have 4.5 months after the end of a calendar quarter to submit data. The proposed change would move that deadline to the 15th day of the second month following the quarter — a shift that would shave up to three months off the lag in public reporting. The goal is to get fresher data in front of consumers and their families faster.

MDS Data Expansion

In a move with potentially broader implications, CMS is also proposing to require submission of Minimum Data Set assessments on all residents receiving skilled care — regardless of payer. Currently, MDS reporting requirements vary by payer source. Expanding the mandate to all payers would give regulators a more complete picture of care delivery across the sector.

The proposal follows CMS’s recent broader payment activity in long-term care. The agency earlier proposed near-zero growth in Medicare Advantage payment rates, a move that could squeeze the managed care plans that now control a growing share of post-acute referrals.

The SNF PPS proposed rule is open for public comment. A final rule is expected before the October start of fiscal year 2027.