10/16/2025

CMS Finalizes 3.2% Medicare Rate Increase for Nursing Homes in Fiscal 2026

The Centers for Medicare & Medicaid Services (CMS) has finalized a 3.2% Medicare Part A payment increase for skilled nursing facilities beginning October 1, 2025, as part of its fiscal year 2026 Prospective Payment System update. The finalized rate, announced in an August 4 rule, reflects an upward revision from the 2.8% increase initially proposed earlier this year.

The adjustment represents an estimated $1.16 billion increase in Medicare payments compared to fiscal 2025. CMS said the update is intended to account for inflationary pressures on facilities, including workforce, supply, and operating costs. The 2026 update remains below the 4.2% and 4.0% rate increases implemented in the previous two fiscal years.

Further details are available in the CMS final rule for the Skilled Nursing Facility Prospective Payment System, FY 2026.