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Capital campaigns can be game changers for nonprofits, enabling bold investments in infrastructure, programs, and long-term growth. Whether you're building a new facility, expanding services, or upgrading technology, a capital campaign aligns fundraising with your strategic vision. 

Signed into law by President Trump on July 4, 2025, the One Big Beautiful Bill Act (OBBBA) marks a significant step forward in addressing America’s growing need for affordable housing. With the demand for low-cost units far outpacing supply nationwide, the legislation offers targeted solutions aimed at making development more feasible and sustainable.

As artificial intelligence (AI) becomes increasingly woven into nonprofit operations, boards are stepping into a new and critical role. Traditionally focused on mission oversight and fiscal responsibility, today's boards must also shape how AI is introduced, governed, and aligned with the organization’s values. Below are the seven most important actions a board can take to ensure responsible and strategic AI implementation. 

Credit, purchase, and debit cards each offer convenience for small-dollar purchases, but carry varying levels of risk. Strong internal controls are essential to prevent fraud, misuse, and compliance violations.

Nonprofit leaders must assess the risks and strategically position their organizations to adapt to changing funding landscapes. This article outlines key steps to help your organization proactively evaluate funding vulnerabilities, mitigate risks, and plan for sustainable operations. 

With default federal student loan collections now resumed by the Department of Education, higher education institutions and other effected nonprofits need a strategy to ensure compliance. 

Most nonprofits rely on federal and state government funds to fulfill their missions. With a federal funding freeze in the headlines, many clients are asking us how they can best prepare for a freeze and protect their organizations if funding is cut. Here are three steps you can take today to stay ahead. 

As the new year begins, your organization may be starting to plan for your next fundraising event. In addition to raising money for the organization, fundraising events are a wonderful way to build relationships within the community, raise awareness for a cause, and provide a meaningful experience to donors. Beyond the excitement and benefits of these events, there are important Form 990 reporting and compliance requirements that you must consider. Below are the most frequently asked questions we receive from our clients. We hope this helps you avoid some common pitfalls around fundraising events.

Is your nonprofit using a break-even bottom line as your ultimate budget goal? If so, you may be missing out on opportunities to strategically further your mission. By looking at your budget using a statement of financial position perspective, rather than just a profit and loss perspective, you can gain a more complete financial picture of your organization.

As organizations navigate the complexities ahead in 2025, economic uncertainty presents both challenges and opportunities. Organizations must strategically address financial stability, donor engagement, federal compliance requirements, and workforce management to sustain their missions. This article dives into five critical finance trends and explores how nonprofits can effectively adapt.

The housing industry is subject to ongoing regulatory changes that are critical to their operations. Recently, we shared changes impacting compliance for multifamily housing, but that's just one example; all facets of the industry are subject to ongoing changes to compliance.

If it’s been a while since your nonprofit organization last conducted a review of its governing documents and policies, worry not, you’re not alone! This article will highlight a few of the most critical documents applicable to nonprofits to ensure you remain in compliance and good standing.

The United States Department of Housing and Urban Development (HUD) signed the Housing Opportunity through Modernization Act (HOTMA) into law on July 29, 2016. For multifamily housing owners, HOTMA went into effect on January 1, 2024, and owners are expected to be fully compliant by January 1, 2025.

Not-for-profit board members need to wear many hats for the organization they serve. Every board member begins their term with a different set of skills, often chosen specifically for those unique abilities. As board members, we often assist the organization in raising money and as such, it is important for all members of the board to be fluent in the language of fundraising. Here are some basic definitions you need to know, and the differences between them

Of all the changes that came with the sweeping Tax Cuts and Jobs Act (TCJA) in late 2017, none has prompted as big a response from our clients as the changes TCJA makes to the qualified parking deduction.

A capital campaign is a big undertaking. During the planning stage of a capital campaign you need to not only focus on your donor outreach strategy, but also on outreach materials. 

Good fundraising and good accounting do not always seamlessly align. While they all feed the same mission, fundraisers work to meet revenue goals while accountants focus on recording transactions in compliance with accounting standards. 

As 2018 is about to come to a close, organizations with fiscal year ends after December 15, 2018, are poised to start implementing the new not-for-profit reporting standard. Here are three areas to address before the close of the fiscal year to set your organization up for a smooth and successful transition, and keep in compliance:

With the wind down of the Federal Perkins Loan Program and announcement that the Federal Capital Contribution (FCC) (the federal funds contributed to the loan program over time) will begin to be repaid, higher education institutions must now decide how to handle these outstanding loans.

Last week, in addition to The Eagles Greatest Hits (1971-1975) album becoming the highest selling album of all time, overtaking Michael Jackson’s Thriller, the IRS issued Notice 2018-67—its first formal guidance on Internal Revenue Code Section 512(a)(6).

Over the course of its day-to-day operations, every organization acquires, stores, and transmits Protected Health Information (PHI), including names, email addresses, phone numbers, account numbers, and social security numbers.

Recently the Governmental Accounting Standards Board (GASB) finished its Governmental Accounting Research System (GARS), a full codification of governmental accounting standards.

As we begin the second year of Uniform Guidance, here’s what we’ve learned from year one, and some strategies you can use to approach various challenges, all told from a runner's point of view.

When it comes to offering non-qualified deferred compensation to executives of not-for-profit organizations, there aren’t many options.

With the implementation of GASB 72 now in full force, GASB organizations are hard at work drafting their new fair value disclosures. The addition of a fair value hierarchy table in the footnotes will add a bit more thickness to a likely already hefty financial package. 

Why it can happen to you and how to protect yourself. We’ve all seen the headlines. Stories about not-for-profit fraud have been popping up in the news, and the statistics confirm what you might have suspected: fraud in the not-for-profit sector is on the rise.

With the most recent overhaul to the Form 990, Return of Organization Exempt From Income Tax, the IRS has made clear its intention to increase the transparency of a not-for-profit organization’s mission and activities and to promote active governance. To point, the IRS asks whether a copy has been provided to an organization’s board prior to filing and requires organizations to describe the process, if any, its board undertakes to review the 990.

When justice and public safety agencies embark on the journey to replace legacy systems—such as Court, CAD, RMS, JMS, or Mobile CAD systems—the road to implementation is often paved with complexity. One of the most overlooked yet critical aspects of a successful system replacement is the planning and documentation of interfaces and integrations. Without a clear understanding of how systems communicate and share data, agencies risk costly delays, change orders, and unmet expectations. 

As a Senior Consultant at BerryDunn, I’ve worked with municipal and county governments across the US to evaluate legacy systems, conduct SWOT analyses, and guide stakeholders through current- and future-state planning. This article focuses on one of the most pivotal elements of that process: ensuring interface and integration requirements are clearly defined and validated before issuing a Request for Proposal (RFP). 

Understanding justice and public safety system interfaces vs. integrations 

Before diving into planning, it’s important to distinguish between two commonly confused terms: interfaces and integrations. 

  • An Application Programming Interface (API) is a tool that allows two applications to communicate. It defines how data is exchanged. 
  • Integration, on the other hand, is the broader process of connecting systems to work together seamlessly. It may involve APIs, but also includes workflows, data synchronization, and user experience considerations. 

In short, APIs are the “how,” and integrations are the “what” and “why.” 

Step 1: Demonstrate existing interfaces and integrations 

One of the most effective ways to validate interface and integration requirements is through live demonstrations. Subject Matter Experts (SMEs) from each department should walk through how current systems interact. This helps confirm whether a connection is truly an interface or integration—or if it’s simply a workaround. 

These demos often reveal discrepancies between what stakeholders believe exists and what actually does. By observing real-time usage, consultants and clients can avoid assumptions that lead to costly change orders later. 

Update and validate requirements 

  • After demonstrations, update the requirements list and circulate it among all stakeholders. Everyone should sign off on the final version before the RFP is issued. This ensures alignment and accountability. 
  • Also, consider future-state needs. Are there new systems being introduced that will require additional interfaces? Are multiple jurisdictions involved that may need to share data? These questions must be answered early. 

Step 2: Require full cost disclosure in RFP responses 

When vendors respond to an RFP, they must include all interface and integration costs, even if they consider them optional. These should be listed as fixed costs, not estimates or “to be determined.” This prevents budget surprises and ensures the project scope is fully understood. 

Lock in interface development commitments 

  • If a vendor proposes to develop a new interface, the cost and timeline must be clearly defined in the contract. Interface vendors should be involved in pre-contract meetings to confirm their ability and willingness to deliver. 

Secure stakeholder approval 

  • Every department involved must review and approve the list of interfaces in the RFP response. This step is crucial for transparency and buy-in. 

Step 3: Reassess requirements after delays 

In some cases, there may be a significant delay—sometimes up to two years—between requirements gathering and vendor selection. Given how quickly technology evolves, these delays can render original requirements obsolete. 

Before finalizing a contract, revisit the list of interfaces and integrations. Have any systems changed? Are previously compatible vendors still viable? Has the agency adopted new software that requires additional connections? 

Consider reissuing the RFP 

  • If the changes are substantial, it may be necessary to revise and reissue the RFP. While this can be time-consuming and may impact the project timeline, it’s often a better alternative than proceeding with outdated or incomplete requirements. 

Reevaluate costs 

  • Delays can also affect pricing. Vendors may have updated their pricing models, or new integration methods may offer cost savings or improved functionality. A thorough review ensures the project remains both relevant and cost-effective. 

Clarity is the key to success in justice and public safety IT projects 

Replacing legacy systems is a major undertaking, and the success of such projects often hinges on the clarity and accuracy of interface and integration planning. By following a structured approach—validating current functionality, ensuring all costs are accounted for, and reassessing requirements when delays occur—agencies can avoid common pitfalls and set themselves up for a smoother implementation. 

About BerryDunn 

BerryDunn’s Justice and Public Safety consulting team partners with agencies nationwide to guide successful technology modernization efforts—from defining requirements and developing RFPs to system selection and implementation. With deep experience across courts, law enforcement, fire, corrections, and more, BerryDunn brings objective, vendor-neutral expertise to help clients identify the right solutions for their needs. Their approach combines stakeholder engagement, in-depth needs analysis, and a balance of business and technical insight to ensure systems are optimized for performance and adoption. By not partnering with hardware or software vendors, BerryDunn ensures recommendations are always in the client’s best interest. Learn more about our services and team. 

Article
Getting RFPs right: 3 steps to evaluating interfaces and integrations in justice and public safety IT

The One Big Beautiful Bill Act (OBBBA) introduces sweeping reforms to federal student aid programs, reshaping the financial landscape for higher education institutions and their students. From changes in loan borrowing limits and repayment structures to Pell Grant eligibility and institutional accountability, the OBBBA signals a new era of fiscal discipline and transparency in postsecondary education.

What’s changing for higher education under OBBBA?

The OBBBA affects nearly every aspect of federal student aid.

Key highlights include:

  • The elimination of certain loan programs and the introduction of new borrowing caps
  • A simplified repayment structure with fewer deferment options
  • A new Workforce Pell Grant and revised eligibility criteria for traditional Pell Grants
  • Updates to how financial need is calculated through FAFSA
  • New accountability measures tied to graduate earnings and program performance
  • A delay in enforcement of borrower defense and closed school discharge rules

These changes will require institutions to reassess financial aid strategies, update internal policies, and prepare for new reporting requirements. Our experts have created a detailed summary of the impacts on higher education institutions. Download the summary for complete details.

Guiding higher ed institutions through change

The OBBBA represents a paradigm shift in how higher education institutions manage federal aid, student debt, and program accountability. While the reforms aim to enhance fiscal responsibility and student outcomes, they also demand significant operational adjustments from colleges and universities. Institutions must prepare to navigate these changes with strategic foresight, ensuring compliance while continuing to support student success in an evolving financial aid landscape.

BerryDunn’s dedicated higher education team brings deep experience to both public and private colleges and universities, with a keen ability to analyze complex organizations and develop actionable strategies to better fulfill your mission. Learn more about our team and services.

Article
Navigating the OBBBA: Transformative impacts on higher education institutions

For many hospitals and health systems implementing Electronic Health Record (EHR) systems, the "go-live" milestone is less of a celebration and more of a stumbling point—even when the implementation seemed like a triumph. Why does this happen? The truth is, go-live is just one of many milestones on the long ascent of your EHR journey.

The real aim of a large-scale EHR project isn’t simply to reach the summit and plant your flag. The goal is to operate the EHR effectively in daily life: gaining efficiencies, making clinical improvements, enhancing patient experience, and restoring or surpassing your previous financial benchmarks.

Climbing the EHR mountain 

Think of your EHR investment like climbing a formidable mountain. No climber sets out just to stand at the summit indefinitely. The true adventure is reaching the top and then making it safely back down—stronger, wiser, and with stories to tell. EHR go-live is that moment at the peak. The journey, however, is far from over.

Many organizations invest in an EHR and create plans that focus only on reaching the summit, neglecting the path home. This oversight leads to exhausted staff, inadequate post-go-live support, declining morale, finger-pointing, and a dangerous slide back into old habits—negating the entire reason for the climb.

Let's explore the unique perils that await after go-live, as hospitals trek from the summit back to normal operations. While there are hazards along the way, these strategies will help you stay on course and avoid danger.

Peril 1: Fatigue at the summit

Just as climbers expend their greatest energy reaching the top, so too do teams give their all in the final days before go-live—last tests, make-or-break decisions, intensive user training, and two weeks of command center operations. When the summit is reached, people are tired. They want to pause and catch their breath, leaving them vulnerable to mistakes.

Strategy: Guard against fatigue

  • Set daily work-hour limits during command center operations and monitor total hours closely.
  • Allow time for team members to recharge; consider rotating schedules so not everyone is off at once.
  • Designate post-go-live reinforcements to relieve the primary climbers once the summit is reached.

Peril 2: Letting your guard down

It’s easy to feel safe once you’ve reached the summit. The command center closes, the vendor departs, and talk turns to optimization visits and transitioning to vendor support. But the path down the mountain—those crucial 6 to 12 months after go-live—can be treacherous.

Strategy: Stay vigilant on the descent

  • Maintain a daily post-go-live huddle, even when the formal command center disbands. This continued cadence keeps eyes on the trail.
  • Remind your team: the journey isn’t finished, and dangers still lurk.
  • Resist vendor pressure to transition to support until your team truly feels ready – use your baseline KPIs to help determine when you are ready.

Peril 3: Running low on provisions

On a mountain, running out of food or water during the descent can be dire. In EHR projects, organizations can burn through financial reserves more quickly than expected—especially with extra testing, third-party support, or extended clinical coverage. After go-live, cash inflow can slow, leaving the organization scrambling for resources.

Strategy: Keep supplies in reserve

  • Utilize both contingency funds (for known risks) and management reserves (for unknowns) throughout implementation and post–go-live.
  • Monitor key financial indicators like days cash on hand and line of credit usage.
  • Plan for the dual challenge of winding down the legacy AR while managing the new AR, allocating sufficient resources for both worlds.

Peril 4: Coming down too fast

Gravity aids your descent, but it also brings new dangers—slipping, speeding, and tumbling down the slope. In EHR go-lives, the “gravity” is the momentum of rapidly accumulating, unchecked transactions. A simple misstep—a missed billing or coding queue due to training gaps or configuration errors—can snowball into a labor-intensive recovery.

Strategy: Manage EHR gravity

  • Identify and address transaction “snowballs” quickly. Know which reports to run and how to spot growing backlogs.
  • Focus on fixing root causes, not just symptoms, to prevent further accumulation.
  • Ensure your team is properly trained on critical workflows and have super users ready to provide targeted remediation.

Peril 5: Getting lost on the trail

Fatigue, a sense of accomplishment, and the illusion of safety can cause teams to lose track of their route. In the EHR world, this can mean ballooning AR, mounting DNFB, accumulating referrals, increasing provider pajama time, and lengthening patient wait times—often unnoticed until you’re deep in the woods.

Strategy: Stay on course with clarity 

  • Chart your descent with clear KPIs for success and monitor them religiously.
  • Seek outside perspectives—consult with your team, bring in experts, and never hike alone.
  • Regularly stop to check your bearings using dashboards and visual indicators to ensure you’re on the right path.

Peril 6: Chasing perfection

Every climber dreams of the perfect ascent and descent—ideal routes, well-timed rests, and a flawless return. But rigidly sticking to a plan, especially when conditions change, can lead to greater risk. In EHR projects, this is most evident in the revenue cycle, where teams may become fixated on perfect claims and charges, ultimately slowing cashflow and putting the organization in jeopardy.

Strategy: Focus on progress, not perfection

  • Emphasize continuous improvement rather than perfection. Revenue cycle performance doesn’t have to suffer after go-live—deficiencies can be addressed with proper planning, testing, and training.
  • Avoid holding claims for unneeded double (or even triple) checks before submission; this creates unmanageable queues and delays.
  • Focus on building robust edits and workflows that prevent defects, acknowledging that denials and rejections will occur, but can be minimized over time.

Thriving beyond EHR go-live

Being aware of the perils and the strategies to address them can help your team thrive through go-live and beyond. The true measure of success is not reaching the peak, but returning stronger—delivering thriving operations, satisfied patients, and healthy financial performance with your new EHR system.

The mountain is waiting. Plan your entire journey, and you’ll return home triumphant.

Fulfilling the promise of healthcare technology

BerryDunn has an objective and experienced team dedicated to healthcare IT, including clinicians, IT experts, and former department heads who have hands-on experience in implementing EHR, ERP, and other health IT systems successfully. Whether you need guidance through the entire process or have specific needs, we customize our services based on where you are today. Learn more about our team and services. 

Article
EHR Go-Live: A milestone, not the destination

The Public Company Accounting Oversight Board (PCAOB) has released its 2024 Annual Report on the Interim Inspection Program for audits of broker-dealers. This 10th annual report outlines persistent deficiencies in broker-dealer audits and attestation engagements. For management and audit committees, the report offers crucial insights into audit risks, regulatory expectations, and areas where stronger oversight is needed.

Persistent deficiencies raise oversight red flags

In 2024, the PCAOB inspected 60 accounting firms and reviewed 102 audits of broker-dealer financial statements. The PCAOB also examined 93 related attestation engagements—either examinations of compliance reports or reviews of exemption reports. The results were:

  • 66% of broker-dealer audits had at least one deficiency related to audit evidence.
  • 59% of compliance examinations and 42% of exemption reviews were found deficient.
  • Deficiencies were most prevalent among smaller firms that audit fewer broker-dealers or issuers.

These statistics reflect a growing concern about audit quality in the broker-dealer space—and highlight where management and audit committees should be particularly vigilant.

Key areas of concern identified
 

1. Revenue recognition and accuracy

Deficiencies in auditing revenue were the most common and serious. This is nothing new, as revenue had been the area cited with the most deficiencies in the 2023 and 2022 reports as well. Of the 102 audits reviewed, 97 included revenue testing—nearly half (48%) had deficiencies.

Common problems included failure to:

  • Verify the accuracy of commissions, advisory fees, 12b-1 fees, and merger/acquisition fees.
  • Confirm that performance obligations were distinct and satisfied prior to revenue recognition (as required by ASC 606).
  • Disaggregate revenue sources appropriately to reflect their nature and timing.
  • Assess the classification and disclosure of revenue, including required qualitative information.
  • Test the accuracy and completeness of third-party reports (e.g., clearing broker data) used in audit procedures.

For example, some firms did not test whether securities trade amounts and commission rates were accurate, nor did they evaluate whether revenue from variable annuity trails or 12b-1 fees should have been disaggregated. Others did not ensure advisory fee calculations were tied to accurate Assets Under Management (AUM) data or fee schedules.

Takeaway for management and audit committees:

Audit committees should confirm that revenue processes—including fee calculation, classification, and third-party data use—are well-documented and transparent. Management should ensure contracts and performance obligations are clearly delineated and that disclosures meet ASC 606 requirements. An ASC 606 practice aid, which walks management through the five-step revenue recognition process, can be useful to take inventory of the broker-dealer’s various contracts and how revenue from those contracts should be recognized in the financial statements. Such a practice aid can also prove useful in crafting ASC 606 disclosures.

2. Journal entry testing and fraud risk

Deficiencies in journal entry testing—critical for identifying and responding to fraud risk—were found in 18% of audits.

Common issues included:

  • Failing to test the completeness of journal entry populations
  • Selecting entries without considering fraud risk characteristics
  • Reviewing listings but not examining supporting documentation
  • Excluding flagged entries from testing without documented rationale
  • Testing too few entries to provide sufficient audit assurance

The PCAOB specifically noted that many auditors failed to respond appropriately to the risk of management override of controls—a key component of fraud risk under PCAOB standards.

Takeaway for management and audit committees:

Ensure your auditors are applying rigorous, risk-based journal entry testing and that internal finance and compliance teams are involved in identifying and monitoring manual entries, especially at period end. Make sure that supporting documentation is retained for all posted journal entries. Also, ensure the journal entry posting process is clearly documented, including the types of journal entries that can be posted, by whom, and who the designated reviewer is. Having such a process clearly documented will make it easier for auditors to understand your broker-dealer’s journal entry process, which is a critical first step in effective journal entry testing.

3. Related party relationships and transactions

Deficiencies in this area were particularly concerning given the potential for misstatement or hidden liabilities. The PCAOB found that some auditors:

  • Did not test allocations of revenues and expenses between broker-dealers and affiliates
  • Failed to assess the financial capability of affiliates to cover material receivables
  • Missed required disclosures of related party transactions under ASC 850

In one case, auditors accepted related-party expense allocations without verifying whether they were accurate, complete, or consistent with underlying agreements.

Takeaway for management and audit committees:

Ensure formal agreements with affiliates are in place and that intercompany transactions are reviewed regularly. If changes to related party transactions are made, these changes should be formally documented in the form of agreement amendments. If an allocation methodology, such as headcount or time studies, is used, broker-dealers must ensure this allocation methodology is thoroughly documented and followed. Disclosures about related parties must be clear and complete. Committees should confirm that auditors are probing related party risks—not just accepting management’s assertions.

Key areas of concern identified – examination engagements (compliance reports)

Of the 29 examination engagements reviewed, 59% had at least one deficiency. Common issues included:

  • Incomplete testing of controls over compliance with SEC financial responsibility rules (e.g., the Net Capital Rule, Customer Protection Rule)
  • Failure to evaluate the design and operation of controls with a review component (e.g., how management reviews reserve computations or account statements)
  • Insufficient testing of IT general controls upon which other control procedures depended
  • Lack of compliance testing over reserve account balances and the existence of securities held for customers
  • Improper or missing representation letters from broker-dealer management
  • Failure to issue modified opinions when material weaknesses in internal control over compliance (ICOC) existed

Takeaway for management and audit committees:

Engage in proactive conversations with your auditor about the internal controls they expect to see in place over the financial responsibility rules. Gain an understanding of your auditor’s testing approach, ensuring it aligns with the expectations of the PCAOB. Throughout the year, make sure sufficient documentation is retained so your auditor can easily test ICOC. Again, what is deemed sufficient should be determined through proactive conversations with your auditor.

Key areas of concern identified – review engagements (exemption reports)

Among the 64 review engagements evaluated, 42% had deficiencies. Key failures included:

  • Inadequate understanding of the broker-dealer's exemption under Rule 15c3-3
  • Insufficient inquiry into controls or monitoring practices related to exemption compliance
  • Failure to test or inquire about the handling of customer checks to ensure prompt transmittal
  • Errors or omissions in review reports—such as referencing assertions not made or failing to include required language

Takeaway for management and audit committees:

If your broker-dealer claims an exemption, ensure operational practices support that status. Review internal monitoring processes and make sure what is happening in practice aligns with your written supervisory procedures. If exceptions to your exemption status are identified, ensure they are promptly corrected and that your auditor is notified of the exception.

What you can do now

To help improve the quality of oversight:

  • Engage in proactive dialogue with your auditor about the PCAOB’s findings and how they apply to your engagement.
  • Assess your auditor’s broker-dealer experience—particularly if your firm is served by a smaller firm.
  • Re-examine and test your internal controls over customer protection, capital computations, revenue recognition, and related-party arrangements.
  • Strengthen audit committee oversight by requesting clear audit strategies, better documentation, and enhanced reporting on high-risk areas like revenue and related parties.
  • Confirm that required auditor communications are received and appropriately documented.

Final thought

The PCAOB’s report is a call to action—not just for auditors, but for management and those charged with governance. As regulatory expectations continue to rise, management and audit committees must ensure that internal processes, control environments, and auditor relationships are all aligned to support accurate, transparent, and compliant financial reporting.

About BerryDunn

BerryDunn's financial services team understands the complex regulatory environment that broker-dealers operate in and provides practical solutions to help you stay ahead of requirements. From broker-dealer financial statement audits to tax preparation and compliance to consulting services, we tailor our services to meet your unique needs. Learn more about our team and services.

Article
PCAOB 2024 inspection report: Takeaways for broker-dealers and audit committees

The Centers for Medicare & Medicaid Services (CMS) issued the final rule for the PPS for SNFs for FY 2026 which was published in the Federal Register on August 4, 2025; the regulations in this rule are effective October 1, 2025.  

The rule: 

  • Updates the PPS payment rates for SNFs for FY 2026 using the market basket update and budget neutrality factors effective October 1, 2025. 

  • Updates the International Classification of Diseases, 10th Revision, Clinical Modification (ICF-10) code mappings used under PDPM. 

  • Updates the SNF Quality Reporting Program (SNF QRP).

  • Updates the SNF Value-Based Purchasing (SNF VBP) Program. 

2026 PPS rate calculations 

The final rule provides a productivity-adjusted market basket increase for SNFs of 3.2% beginning October 1, 2025, which reflects: 

  • A market basket increase of 3.3% based on IHS Global Inc.’s (IGI’s) second quarter 2025 forecast with historical data through the first quarter of 2025.  

  • An upward forecast error adjustment of 0.6% due to the difference between the estimated and actual percentage increase in the market basket exceeding the 0.5 percentage point threshold.  

  • A downward 0.7 percentage point multifactor productivity adjustment (based on the 10-year period ending September 30, 2026).  

The unadjusted federal rates for FY 2026, prior to adjustment for case-mix, are as follows: 

FY 2026 Unadjusted Federal Rate Per Diem – Urban 

Rate Component PT  OT  SLP  Nursing NTA Non-Case-Mix
Per Diem Amount $75.73   $70.49   $28.28   $132.00   $99.59  $118.21






FY 2026 Unadjusted Federal Rate Per Diem – Rural 

Rate Component PT  OT  SLP  Nursing NTA Non-Case-Mix
Per Diem Amount $86.33  $79.29  $35.63  $126.12 $95.15 $120.40





The rates shown in the tables above are subsequently case-mix adjusted, and a facility-specific wage index—determined by the Core-Based Statistical Area (CBSA) in which each facility is located—is also applied. To assist you with the calculation of your facility-specific PPS rates for FY 2026, our experts at BerryDunn have updated our interactive rate calculator, which is part of the BerryDunn Senior Living Portal.  

Please note: The rates per our calculator are prior to any FY 2026 VBP adjustment. When CMS releases the final VBP incentive payment multipliers for FY 2026, BerryDunn will update the interactive rate calculator as necessary. 

CMS estimates that the aggregate impact of the payment policies in this final rule would result in a net increase of 3.2%, or approximately $1.16 billion, in Medicare Part A payments to SNFs in FY 2026. This estimate does not reflect a projected $208.36 million decrease as a result of the SNF VBP program reductions. 

The projected overall impact to providers in urban and rural areas is an average increase of 3.1% and 3.7%, respectively, with a low of 2.0% for urban Pacific providers and a high of 6.6% for rural Mountain providers—actual impact will vary. 

Changes in PDPM ICD-10 code mappings 

CMS has changed the clinical category assignment for 34 new ICD-10 code mappings that were effective October 1, 2024. These updated code mappings can be found on the PDPM website

SNF QRP Update 

Updates to the SNF QRP Program include: 

  • CMS finalized removing four items that were previously adopted as standardized patient assessment data elements in the Social Determinants Of Health (SDOH) category, starting with the FY 2027 SNF QRP. These are: 

    • One item related to Living Situation,

    • Two items concerning Food

    • One item regarding Utilities   

  • Finalized and codified changes to the reconsideration policy and process. Now, SNFs will be permitted to request an extension to file a reconsideration request. Additionally, CMS is updating the criteria that will be used to evaluate and potentially grant these reconsideration requests. 

SNF VBP Program update 

Updates to the SNF VBP Program include: 

  • The Health Equity Adjustment (HEA) will be removed beginning in the FY 2027 program year, to streamline the scoring methodology and offer clearer incentives for SNFs.  

  • Final performance standards for the FY 2028 and FY 2029 program years were provided to meet the SNF VBP Program's statutory notice deadline.  

  • The previously established scoring methodology will be applied to the SNF Within-Stay Potentially Preventive Readmission (SNF WS PPR) measure, starting with the FY 2028 program year, to align the scoring methodology for this measure with the scoring methodology previously finalized and applied to all other measures in the measure set.  

  • Adoption of a new reconsideration process, allowing SNFs to seek reconsideration on Review and Correction requests. 

The following table lists the measures that have been adopted for the SNF VBP Program, along with their status in the program for the FY 2026 program year through the FY 2029 program year. 

 Measure FY 2026 Program Year FY 2027 Program Year  FY 2028 Program Year  FY 2029 Program Year 
SNF 30-Day All-Cause Readmission Measure (SNFRM)  Included  Included 
SNF Healthcare-Associated Infections Requiring Hospitalization (SNF HAI) measure  Included  Included  Included  Included 
Total Nurse Staffing Hours per Resident Day (Total Nurse Staffing) measure  Included  Included  Included  Included 
Total Nurse Staff Turnover (Nursing Staff Turnover) measure  Included  Included  Included  Included 
Discharge to Community – Post-Acute Care Measure for SNFs (DTA PAC SNF)  Included  Included  Included 
Percent of Residents Experiencing One or More Falls with Major Injury (Long-Stay) (Falls with Major Injury (Long-Stay)) measure  Included  Included  Included 
Discharge Function Score for SNFs (DC Function) measure  Included  Included  Included 
Number of Hospitalizations per 1,000 Long Stay Resident Days (Long Stay Hospitalization) measure  Included  Included  Included 
SNF Within-Stay Potentially Preventable Readmissions (SNF WS PPR) measure  Included  Included 

































If you have any specific questions about the final rule or how it might impact your facility, please contact Ashley Tkowski or Melissa Baez

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Fiscal Year (FY) 2026 Skilled Nursing Facility (SNF) Prospective Payment System (PPS) final rule