CMS Finalizes SNF Medicare Payment Rule

(Aug. 5, 2025) The Centers for Medicare and Medicaid Services (CMS) has finalized the rule setting Medicare Part A rates for the upcoming Federal Fiscal Year (FY). The Skilled Nursing Facility Prospective Payment System (SNF PPS) Final Rule will increase base rates by 3.2% starting in October 2025, a total add of $1.16 billion. The finalized increase is higher than the originally proposed 2.8% and is comprised of a market basket (i.e., inflation) adjustment of 3.3%, a positive forecast error adjustment of 0.6% to correct for a prior underestimate of inflation, and a productivity adjustment of -0.7%.

The base rate is further adjusted by the wage index which will be applied to 71.9% of the rate, meaning that providers may see rate increases that are greater or less than the 3.2% base increase. Regions where the finalized wage index rose noticeably relative to the prior year include Rochester (4.7%), Albany (4.8%), Syracuse (6.8%), and Glens Falls (9.7%). The NYC region index dropped by 1.4%, with the Long Island, Kingston, and Orange County regions seeing even larger decreases. The rural area wage index rose by 2.8%.

The final rule also adopts proposed tweaks to Value-Based Purchasing (VBP) and the Quality Reporting Program (QRP) by granting greater leeway for providers in the reconsideration process for both programs; dropping four Social Determinant of Health standardized patient assessment data elements (SPADEs) from the FY 2027 QRP (living situation, food (2), utilities); and removing the not-yet-implemented Health Equity Adjustment from the SNF VBP Program.

A fact sheet on the final rule is available here. The rule itself, which also features a summary of feedback CMS received on several Requests for Information (RFIs) included in the proposal, is available here. Those RFIs requested input on future quality reporting measure concepts on the topics of delirium, interoperability, nutrition, and well-being; on revisions to the current data submission deadlines for assessment data; and on advancing digital quality measurement in the SNF QRP.

Contact: Darius Kirstein, dkirstein@leadingageny.org, 518-867-8841