On June 11, DMAS announced all Medicaid fee-for-service (FFS) rates effective for dates of service beginning July 1, 2025, including nursing facility (NF) and specialized care rates.

• NF rates will be adjusted for inflation by 3.98 percent. As this is the second year of a three-year rebasing cycle, this adjustment is based largely on the results of the Wage Survey conducted in February.
• While they are categorized as FFS rates, these are also the rates paid by the Medicaid managed care organizations, unless a nursing facility or specialized care provider has agreed to an alternative payment.

Beginning October 1, 2025, these rates for nursing facilities are expected to be replaced with PDPM-based rates, or some temporary solution to bridge to PDPM-based rates. The replacement PDPM-based rates will be designed to be budget neutral in terms of the aggregate Medicaid spend, which makes the inflation factor relevant regardless of the replacement rates in October.

• These rates would normally be in place for the full state fiscal year (for dates of service through June 30, 2026), which will be the case for specialized care.

For specialized care, rates are rebased annually, which includes an inflationary adjustment, but also an examination of the cost reports to establish the underlying cost of care. DMAS did not comment on the overall rebasing impact, as it is often variable by provider.

• Once the rates have been posted, VHCA-VCAL typically sees the rebasing calculations to understand the rate movement from the previous year.

More details: DMAS has indicated that the rate sheets for SFY 2026 (rates effective July 1, 2025 – June 30, 2026) will be available online no later than June 16.

• You will be able to access both nursing facility and specialized care rates at: https://www.dmas.virginia.gov/for-providers/rates-and-rate-setting/nursing-facilities/.

No base rate reform: DMAS also stated publicly that it will not implement the budget language directing the base rate reform by moving from the day-weighted median peer group facility cost to the 59th percentile day peer group facility cost as the starting point of the direct care rates.

• Last month the General Assembly concluded that Gov. Glenn Youngkin’s veto of this provision was invalid. It appears that DMAS has been instructed to maintain the governor’s position.
• VHCA-VCAL is evaluating next steps given that $21.6 million in additional funding is at stake in DMAS’s refusal to implement the reform.