AHA Seeks Improved CMS Payment Updates for SNFs
The AHA's push for improved payment updates is driven by concerns over rising expenses and labor pressures, as well as the need for more transparency and accuracy in CMS calculations. The outcome of these efforts will have significant implications for the healthcare system, particularly for SNFs and hospitals struggling to stay afloat.
The American Hospital Association (AHA) is urging the Centers for Medicare & Medicaid Services (CMS) to provide more accurate and timely payment updates for skilled nursing facilities (SNFs) in fiscal year 2026, citing concerns over inaccurate market basket updates and underestimated market basket growth forecasts.
The proposed rule for FY 2026 suggests a 3.0% market basket update, a 0.8 percentage point cut for productivity, and a 0.6 percentage point increase for market basket forecast error. However, the AHA has expressed concerns that these updates are inadequate and do not accurately reflect the rising expenses and labor pressures faced by hospitals. The association is pushing for more accurate payment updates to ensure the sustainability of SNFs.
Hospitals are also criticizing the proposed 2.4% pay raise for inpatient hospitals in the 2026 fiscal year, calling it "inadequate" due to rising expenses and labor pressures. The AHA and Federation of American Hospitals (FAH) are urging the CMS to increase the pay raise and eliminate the productivity cut, which they argue is based on a metric that does not accurately reflect hospital productivity.
Additionally, hospitals are expressing concerns about the mandatory participation in a bundled payment model, known as TEAM, which will require certain acute care hospitals to participate in episode-based payments for five common surgical procedures. The AHA is also calling for more transparency on how the CMS calculates Disproportionate Share Hospital (DSH) payments and is urging the agency to apply a positive adjustment to the market basket forecast to account for the actual increase in hospital costs.
The AHA's comments on the proposed rule highlight the need for more accurate and timely payment updates to ensure the sustainability of SNFs and hospitals. The association's concerns over inaccurate market basket updates and underestimated market basket growth forecasts underscore the importance of getting payment updates right to support the healthcare system.