It’s Official! CMS Repeals Federal SNF Staffing Mandates; and
Ongoing Federal/State Audit Activity and Revalidations
FEDERAL SNF STAFFING MANDATES
Back in early 2022, we reported on President Biden’s reform efforts, developed by and implemented through the U.S. Dept. of Health and Human Services (HHS) to improve the safety and quality of nursing home care nationally. These Federal reforms could have had significant consequences for the nursing home industry if they had been implemented.
Among those proposed reforms was the announcement of a Federal Minimum Nursing Home Staffing Requirement, which was implemented on May 10, 2024 with CMS’s issuance of a final rulemaking (Federal Register, 89 FR 40876) that established minimum staffing standards for long-term care facilities participating in Medicare and Medicaid programs. However, once the Trump Administration took office in 2025, it did not take long for Congress to suspend implementation of these provisions until September 30, 2034 in a provision of the One Big Beautiful Bill Act. And two federal district courts subsequently vacated certain aspects of the minimum staffing provisions at the summary judgment stage.
Finally, on December 2, 2025, CMS had enough and announced that it has formally repealed the federal SNF staffing mandate because
“HHS no longer believes that the current quantitative minimum staffing standards affected by the moratorium and litigation are appropriate, especially because the minimum staffing standards do not follow from the best interpretation of the relevant statute. The quantitative minimum staffing standards, as currently written, impose one-size-fits-all minimum requirements on all facilities across the country without accounting for differences in local labor supply, overall acuity of the facility’s resident population, or available resources.”
While the above quote is, of course, true and should be music to the SNF industry’s ears, the effect of this repeal will also, of course, be dampened in many areas of the country by the fact that, as CMS states, “many States have regulations in place for minimum nursing services to LTC facility residents, [and] those regulations vary, and do not assure consistent minimum standards across the country.” SNF owners in New York, New Jersey, and many other states are well aware of this fact and the CMS federal repeal will therefore not be of much benefit to facilities in states where such requirements are state mandated.
FEDERAL & STATE ONGOING AUDIT ACTIVITY
In other news, SNF audit activity continues unabated. On the federal side, within the last several months, the HHS Office of Inspector General (OIG) has begun audits of SNF use of the Patient Driven Payment Model (PDPM), which was first introduced in 2019 in the early days of the COVID pandemic. These audits were first announced in the HHS OIG Work Plan and there are apparently at least four such facility audits reportedly ongoing. The stakes are very high for SNF facilities if CMS adopts some of the findings and positions that the HHS OIG is taking when CMS reviews these audits before recoupment begins.
In more local news, the New York OMIG recently published its 2024 Annual Report, which reports that 32 SNF final audit reports were issued identifying overpayments of more than $12 million dollars. The three areas of focus were minimum dataset, property, and dropped services audits. New York OMIG’s 2025 Work Plan likewise identified nursing home capital costs and ancillary services audits as well as assisted living program (ALP) audits among its priorities. The New York OMIG 2026 Work Plan should be announced within the next few months, and we see no reason to believe that such audits won’t continue. We have successfully defended some of these SNF property cost and dropped services audits and ALP audits and we were able to reduce the alleged overpayments by millions of dollars; we stand ready to assist with any state or federal audit defense needs you may have.
CMS SNF REVALIDATIONS
Finally, as we first reported in October 2024, CMS continues to require all SNFs to revalidate with new onerous reporting requirements concerning, among other disclosures, SNF additional disclosable parties (ADPs). The deadline for completing such revalidations has shifted throughout 2025; however, the current January 1, 2026 deadline remains intact as of this advisory date. We have assisted numerous clients in responding to this revalidation effort; please contact us for any additional assistance you may require.