CMS Gives SNFs 4.2% Bump in 2025 & Increases Agency’s Ability to Fine Facilities

The Centers for Medicare & Medicaid Services (CMS) issued a final rule on July 31, 2024, for the fiscal year 2025 skilled nursing facility prospective payment system. This rule will bump nursing homes Medicare Part A pay rate by 4.2%, amounting to an additional $1.4 billion compared to FY 2024.

This final rule also changes CMS’ enforcement policies to impose more equitable and consistent civil monetary penalties (CMPs) for health and safety violations as part of the agency’s ongoing work to increase the safety and care provided in America’s nursing homes.

CMS revised the regulation to expand the type of CMPs that can be imposed to allow for more per instance and per day CMPs to be imposed, as appropriate. From the agency,

The revisions in this rule will permit both types of penalties to be imposed, providing CMS with greater flexibility to impose penalties in a manner that more directly reflects the health and safety impact on residents and incentivizes permanent correction.

In the final rule it also finalized updates to the SNF Quality Reporting Program (QRP) to better account for adverse social conditions that negatively impact individuals’ health or healthcare. CMS also finalized its proposal to adopt a data validation process for the SNF QRP beginning the same year.

Highlights: SNF QRP Updates

• Beginning with the FY 2027 SNF QRP (beginning with residents admitted on October 1, 2025), CMS is finalizing the adoption of four new items in the minimum data set (MDS) under the SDOH category: (1) Living Situation (1 item), (2) Food (2 items), and (3) Utilities (1 item).
• Beginning with the FY 2027 SNF QRP (beginning with residents admitted on and after October 1, 2025), CMS is finalizing modification of the Transportation item in the MDS, collected under the SDOH category.
• Beginning with the FY 2027 SNF QRP, CMS is finalizing a policy requiring that SNFs participating in the SNF QRP participate in a validation process.

The agency’s final rule included several operational and administrative proposals for the SNF Value-Based Purchasing (VBP) Program.

Updates to the SNF VBP:

• A new measure retention and removal policy to help ensure that the SNF VBP Program’s measure set remains focused on the best and most appropriate metrics for assessing care quality in the SNF setting.
• A new technical measure update policy allowing the agency to update previously finalized SNF VBP measure specifications using a sub-regulatory process.
• Administrative policy updates, including an update to the review and corrections policy that CMS previously finalized for the program, to ensure that SNFs can review and correct data used to calculate their measure rates.

Get the CMS Fact Sheet for additional details