CMS has finalized several regulatory changes impacting SNF operations, coding practices and reimbursement strategies for FY 2026. This summary highlights the most critical updates for executive decision-making.
SDOH & Section R Removed from MDS CMS has rescinded its plan to include Social Determinants of Health (SDOH) via Section R in the MDS, citing administrative burden.
Impact: No SDOH data collection required in MDS for FY 2026.
ICD-10 Code Revisions Effective October 1, 2025:
33 ICD-10 codes reclassified as Return to Provider (RTP)
1 code (G90.81) moved from Acute Neurologic to Medical Management
Key Compliance Note: These codes cannot be used as primary diagnoses to justify Medicare Part A SNF-level care. They may be listed as secondary diagnoses.
Medicare Part A SNF Eligibility Criteria
All four conditions must be met:
Skilled services ordered by a physician
Daily skilled care required
Services must be inpatient-only
Services must be reasonable and necessary
Quality Reporting Program (QRP)
Penalty-based program
FY 2026 APU data window: Jan. 1 – Dec. 31, 2024
CMS will maintain current QRP measures through FY 2028
Value-Based Purchasing (VBP)
Incentive-based program focused on rehospitalization reduction
Performance period for FY 2028 incentives begins in FY 2026
Annual benchmarks published in the Federal Register
QRP Submission Exceptions
CMS will use the FY 2016 definition of “extraordinary circumstances,” including:
Natural disasters
Civil unrest
Infrastructure damage affecting access to records
Strategic Actions for SNF Executives
Audit ICD-10 coding for compliance with RTP exclusions
Train MDS teams on Medicare Part A criteria
Track QRP/VBP benchmarks to optimize reimbursement
Prepare documentation protocols for exception requests
