Nursing Homes Could Get a 2.8% Pay Increase From CMS Proposal

Nursing homes just got a bit of a mixed bag from the Centers for Medicare & Medicaid Services (CMS) for the fiscal year 2026. While the proposed Medicare Part A pay hike is a modest 2.8%—down from the 4.2% increase last year and 4.0% the year before—there are some other changes in the proposal that have industry leaders feeling cautiously optimistic.

What’s in the Proposal?

2.8% Medicare Increase to Skilled Nursing Facilities

The proposed 2.8% medicare bump is smaller than in recent years and doesn’t factor in reductions from the SNF Value-Based Purchasing (VBP) program, which could take a bite out of the increase for some facilities. CMS estimates those VBP adjustments will total about $196.5 million this year.

Clif Porter, CEO of the American Health Care Association/National Center for Assisted Living, said he’s grateful for the increase but stressed the importance of strong Medicare and Medicaid programs, since most nursing home residents rely on Medicaid and more short-term patients are now on Medicare Advantage plans.

Regulatory Relief and Streamlining

CMS is also asking for feedback on how to “streamline” (read: cut or simplify) some Medicare regulations. The agency wants to reduce the administrative burden of reporting and documentation, and get rid of duplicative requirements. This is part of a broader push to make life a little easier for providers.

Changes to Value-Based Purchasing (VBP)

• New Appeals Process: Starting in the fiscal year 2027, CMS is proposing a new “reconsideration request process” for the SNF VBP program. This would give providers another chance to appeal VBP decisions, aligning the process with other CMS quality programs.
• Health Equity Adjustment Dropped: CMS is also planning to eliminate the Health Equity Adjustment from VBP scoring for FY 2027, saying it was complicated and didn’t add much incentive for providers. Some industry experts called this a win, especially for communities that felt left out by the original plan.

Summary Table: Key Changes in the FY 2026 SNF PPS Rule

The Bottom Line

While the pay hike isn’t as big as in previous years, the CMS proposal includes some real positives: a push for regulatory relief, a new focus on digital maturity, and a more transparent VBP appeals process. 

There’s still a lot to digest, but for now, many in the industry are calling it a “very positive” surprise.

🤔Nurses, share your thoughts in the discussion forum below.