2026 OUTLOOK

Core uncertainty-driven concerns for SNFs

2026 aging industry uncertainty for skilled nursing facilities, the dominant uncertainty is around the ability to staff beds, sustain Medicaid-heavy margins, and keep up with shifting Medicare/compliance requirements, and the most practical remedies combine aggressive workforce redesign, tighter payer strategy, and “no‑regrets” investments in operations, data, and partnerships.

• Workforce instability and census risk
  • Nursing home leaders enter 2026 less optimistic, with staffing worries cited as the top anxiety even as census rebounds.
  • Labor shortages continue to force SNFs to limit admissions, with a 2025 survey showing about a quarter of single-site communities and nearly a fifth of multi-sites restricting SNF admissions due to staffing, especially CNAs/LPNs
• Payment and policy volatility (Medicare and Medicaid)
  • CMS’s FY 2026 SNF PPS final rule provides a 3.2% Medicare rate update (about $1.16B more than FY 2025), but this trails the combined pressure of wage inflation, agency costs, and elevated non-labor expenses.
  • The One Big Beautiful Bill and related federal actions are expected to squeeze Medicaid-focused plans and state budgets over the next several years, raising concern that Medicaid rate growth will remain modest and variable while acuity and regulatory expectations rise.
• Regulatory and compliance “gray zones”
  • 2026 SNF compliance commentary highlights intensifying scrutiny around QAPI, facility assessments, frontline staff engagement, and data use, with leaders flagging ambiguity in how state survey agencies interpret federal regs on safety, privacy, and quality.
  • Parallel changes in SNF VBP and QRP, including removal of the health equity adjustment from SNF VBP scoring and updates to reconsideration processes, require attention to new measures, timelines, and appeals mechanics.

High-impact remedies inside the SNF

• Deliberate workforce strategy, not just hiring
  • Build a tiered clinical model with clear ladders (resident aide → CNA → LPN → RN) and formal tuition, preceptor, and apprenticeship programs; this directly addresses high CNA turnover and recruitment gaps identified in national surveys.
  • Reduce reliance on agency by:
    • Offering internal float pools and shift differentials targeted to “pain point” shifts/units
    • Using flexible self-scheduling and part-time arrangements attractive to late-career nurses and caregivers.
    • Train frontline leaders (DNS, unit managers) in retention management and just culture, since local leadership is repeatedly cited as a determinant of whether staff stay through difficult conditions.
• Operational excellence tied to compliance and payment
  • Strengthen QAPI and facility assessment processes so they are genuinely data-driven and used to prioritize projects that also protect revenue (e.g., reducing rehospitalizations, improving key VBP/QRP measures).
  • Standardize documentation practices for PDPM, SNF VBP, and QRP measures; small documentation differences can materially affect case-mix indices and VBP adjustments under the 2% withhold and incentive redistribution.
  • Use simple dashboards for unit-level leaders that integrate census, staffing, overtime, agency spend, rehospitalizations, falls, infections, and pressure injuries, aligning QAPI with daily operations.
• “No-regrets” investments and partnerships
  • Targeted technology with clear ROI
    • Prioritize tools that directly relieve staffing and support key metrics: e.g., eMAR/EHR optimization, clinical decision support, workforce management/acuity-based staffing, and fall-prevention or early-deterioration alerting technology.
    • Ensure interoperability between SNF systems and hospital/payer platforms (ADTs, CCDs, eReferrals), improving referral flow, reducing intake errors, and supporting participation in value-based arrangements.
  • Closer alignment with hospitals and payers
    • Formalize gainsharing or preferred network agreements where SNFs are rewarded for lower readmissions, shorter LOS, and high patient/family satisfaction, helping offset rate pressure.
    • Build joint clinical programs (e.g., for CHF, COPD, sepsis recovery, post-surgical pathways) that standardize protocols and data sharing, making the SNF essential to the hospital and plan’s strategy rather than interchangeable.

ARTIFICIAL INTELLIGENCE (AI)

Human oversight in the Age of AI

The usage of artificial intelligence (AI) is exploding.  In 2025 alone, the healthcare industry has invested $1.4 billion in AI, triple the amount spent in 2024.  The legal profession has seen a similar surge, with AI usage nearly doubling.  As this growth continues, the synergy between AI and human experts is essential to ensuring quality outcomes, especially in high-stakes environments like healthcare and law.

In litigation, where decisions hinge on precise and timely information, AI excels at accelerating the review and summarization of massive volumes of complex medical records.  Human experts are then needed to leverage these initial outputs, applying their analytical precision and nuanced judgment to verify accuracy, provide essential context, and distill the information into focused and concise reports.  We consider this type of integrated approach as key to equipping counsel with reliable insights early in the life cycle of a case, which in turn will enable more informed strategies and favorable outcomes.

LEADERSHIP

In case you missed it

Jennifer Kluge sat down with Jean Bourgeois, MBA, RHIA, President and Founder of Excelas, LLC, to talk about building a company with integrity, navigating uncertainty, and leading with purpose. Her story—from startup beginnings to award-winning culture—is inspiring on every level.

EMPLOYEE SPOTLIGHT

Michelle Dietrich

Manager of Medical Record Organization Department

Michelle Dietrich oversees daily operations. Outside of work, she values quality time with family and friends. She loves vacationing somewhere warm and creating new memories. Her happy place is definitely the beach.

She also enjoys going to her boys’ football, basketball and baseball games, trying new restaurants, and taking road trips. She is always up for an adventure!

She also loves downtime, which during the winter months will include watching Hallmark movies, game nights with her husband and kids. Michelle also enjoys being part of the Excelas book club, and treasures her work life balance.

Her leadership and commitment to the Excelas team, along maintaining a healthy work-life balance are truly inspiring! She brings the same energy and passion to work as to her family, adventures, and personal interests. Excelas is lucky to have Michelle guiding the Medical Record Organization Department!

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Excelas helps organizations respond accurately and quickly to claims and litigation brought against them

Partnering with attorneys, health care organizations, and insurance companies since 1995, Excelas provides medical legal analyses and tools for building winning defense strategies. When expertise, accuracy, reliability, and on-time delivery count, you can count on Excelas.