Did you know that since the pandemic, approximately 579 nursing homes have shut down? Caring for residents in a nursing home is an important and demanding job. It involves not just providing daily help, safety, and comfort, but also figuring out how to get paid. As we move into 2026, there are some really big changes to how Medicare and Medicaid pay for nursing home care. This guide is written for nursing home providers and staff to break down those changes, help you prepare, and keep your team informed. So you can focus on giving great care to the people who need it instead of worrying about getting paid.
These are the few main nursing home billing updates coming in 2026. Knowing them early will help you prepare in advance and avoid claim errors. Let’s start with payment updates, which matter the most.
In 2026, nursing homes will see a 3.2% increase in Medicare payments for skilled nursing care. That’s based on the new “market basket” rate plus adjustments for errors and productivity. While not the highest jump ever, it should help facilities with wage growth and general costs, especially while inflation stays high.
However, facilities might see some reductions due to performance in value-based programs. If your facility doesn’t hit the right quality marks, you could lose some or all of these extra funds. Always check your quality scores before assuming new payment rates and plan accordingly.
Medicare uses the Patient-Driven Payment Model (PDPM) to decide payments based on each resident’s needs. For 2026, CMS is updating the list of accepted ICD-10 diagnosis codes. Certain common codes, like some eating or diabetes disorders, will not qualify for top payments.
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What happens if we miss the 60-day Medicaid coverage window?
Services prior to application might not get paid. Inform your billing team, admissions, and families about the new time frame, and adjust internal protocols to start paperwork on day one.
Medicare won’t just look at the number of residents or diagnoses. Quality measures matter more than ever.
This program takes back 2% of Medicare payments, but gives it back to facilities that do better than their peers. The metrics measured include hospital readmission rates, staffing levels, infection rates, and residents’ functional status at discharge.
For 2026 and beyond, VBP will ‘redistribute’ more of this withheld money to the best performers. That means:
If your facility does not meet the new QRP documentation rules, there is a penalty. The Medicare increase you expected could drop by 2 percentage points. Not only does the paperwork need to be right, but compliance must be constant.
Since you now know about Medicare updates, let’s shift to Medicaid, which pays for most long-term care residents.
Medicaid’s “retroactive payment window” is shortening from 90 to 60 days for non-expansion residents (which means most nursing home residents). What does this mean for billing?
For most Medicaid expansion adults, eligibility review switches from yearly to every six months. Fortunately, this usually does not apply to the main Medicaid group for nursing homes. Aged, blind, or disabled residents are exempt.
But for residents who fall under expansion (perhaps newer admissions or those who qualify differently), staff should:
Frequent checks mean any slip in paperwork can end in sudden coverage loss, making it essential your billing department is organized and proactive.
Starting in 2028, Medicaid will not pay for nursing home care if a resident’s home equity is over $1 million. This rule is strict with no inflation adjustment, and very limited ways around it.
Nursing Home Providers should:
States use provider taxes to help pay for Medicaid, but new rules in 2026 limit new or increased taxes, unless rates are under 6%. Nursing homes and intermediate care facilities are mostly exempt, as long as they don’t get supplemental payments funded by higher provider tax rates.
Check your state’s Medicaid funding to see if any changes could affect your reimbursement. It pays to know about provider taxes, but most facilities should see little change if their rates already fall below the cap.
One piece of good news: The “One Big Beautiful Bill” delays minimum staffing mandates until 2034. For staff and operators, this means:
Still, keep watch on staffing levels. It is possible these mandates will surface again, and quality scores still depend on having well-trained teams caring for residents.
Good documentation is important because every dollar you receive depends on clear, accurate records. Whether it’s nursing notes that justify skilled care for Medicare or complete financial records for Medicaid, proper documentation is your best defense against denied claims and lost revenue.
Regular audits help find mistakes before the government does. Set up internal reviews every quarter, and use results to adjust training. Invite feedback from staff who do the work every day; they’re your best resource for catching issues early.
Families are important partners in the billing process. Providers and staff should:
Families who understand the rules work better with providers, reducing misunderstandings and billing emergencies.
Billing changes in 2026 can create billing challenges for nursing, so every member of your team must stay coordinated.
Encouraging teamwork and clear, open communication keeps your skilled nursing facility billing compliant and your revenue safe.
In 2026, Medicare and Medicaid will change the way they pay nursing homes, and this will impact almost everyone who works there. By staying informed, talking clearly with your team, and keeping your paperwork in order, your facility can avoid billing issues, keep money coming in, and focus on providing great care.
This change doesn’t have to be challenging. With some planning, teamwork, and active staff participation, nursing homes can handle these new rules and continue to provide the best care for residents.
Let’s all work together to keep nursing homes strong, residents safe, and make sure every bill is paid. Your hard work really matters!
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