Aug. 20, 2026

Nursing Home Rates Posted by DHS

On August 20, 2026 by Jeff Bostic

After months of delay due to late submission by DHS of the State Plan Amendment (SPA) to the Centers for Medicare and Medicaid Services (CMS), nursing home rate notices for January 1, 2026, were posted on Friday, Aug. 21 to the nursing facility provider portal.

Editor's Note: The original article, published Thursday, Aug. 20, has been updated to reflect rates being posted by DHS on Friday, Aug. 21.

These rates implement a number of changes approved by the 2025 Legislature, and the retroactive nature of the changes creates significant complications for providers, residents and employees. The new rates are retroactive to January 1, 2026. DHS will automatically reprocess claims in September to reflect the new rates, while providers will be responsible for settling up to these new rates with their private pay residents.

Here are the key aspects of the 2026 rates that members will see on their rate notice:

• The minimum wage rate increase (calculated for each facility based on 2025 data the provider submitted) will be effective retroactive to 1/1/26. It appears on the rate notice only on the total rates page as a single amount that is added to all case mix classes.
  • The minimum wage requirements themselves will be effective 9/10/26, which is thirty days after the SPA was approved by CMS.
  • That means, starting 9/10/26, nursing homes and contractors providing services in nursing homes need to pay all employees: $19.09/hr with higher requirements for:
    • CNAs: $22.60/hr
    • TMAs: $23.60/hr
    • LPNs $27.12/hr
  • These figures are somewhat higher than what the workforce standards board has announced due to a quirk in the state’s Paid Family and Medical Leave law, which does not allow for that tax on employees to reduce them below a minimum wage level.
• January 1, 2026 operating rates have been calculated based on the 2024 cost report information according to the usual Value-Based Reimbursement update schedule.
  • Each component of the operating rate (direct care, other care related, other operating) is capped at an increase from 2025 rates of no more than the rate of inflation (3.22%).
  • These caps are a new policy that reduces year-to-year increases in a way that undermines providers’ ability to make appropriate investments in in their employees and care for residents.
• The January 1, 2026, surcharge increase adopted by the state was approved by CMS, but only through September 30, 2026.
  • As a result, starting 1/1/26, the rate paid to nursing homes to cover the surcharge will be $19.02, up from the current $8.86. That will be the case until 9/30/26, when it will revert to the previous level.
  • The final page of the rate notice shows both a 1/1 rate and a 10/1 rate, the only difference being the removal of the surcharge. Providers should be aware that they will not be getting a 10/1 rate notice—the current notice shows what the rate will be starting that date.

The completion of rate notices after this unprecedented delay brings a form of resolution, but it now leads to significant implementation challenges ahead. The retroactive rate changes, upcoming September 10 wage requirements, and implications for private-pay residents create a compressed timeline and substantial administrative and financial demands for providers.

We have developed several resources to assist members with the challenges of implementing a greatly delayed rate change:

• Sample letter to private pay residents explaining the reason for retroactive billing
• Talking points for residents, families and employees about the retroactive rate change and the minimum wage requirements
• An updated nursing home workforce standards board web page that includes an FAQ about the new minimum wage standards

We are very disappointed by the mess that was created this year by DHS. The mismanagement of the rate updating and subsequent CMS approval has a significant impact on providers and the older adults and families you serve. If you have not received your rate notice from DHS, please contact Alicia Harrington.