Minimum‑staffing repeal and workforce transparency: Why 2026 is a pivotal year for nursing‑facility planning

For operators of skilled nursing and long‑term care facilities, 2026 began with a mix of relief but with new uncertainties. The staffing mandate that had dominated agendas was rescinded, but new cost‑reporting rules, an uptick in audits and an industry workforce that remains delicate have kept a regulatory spotlight on how each facility manages care. In other words, there may be fewer mandated ratios, but now there is more visibility into what leaders are doing, and when budgets meet reality, hidden risks often emerge.

A turning point that didn’t simplify anything

According to a recent BerryDunn industry analysis, the past year was transformative. Rapid regulatory changes, a shift toward Medicare Advantage, and ongoing financial and workforce challenges has impacted familiar operations. What seemed like regulatory loosening on paper has instead created new pressures: facilities can shape their own workforce models, but they face greater accountability for how those models perform.

Mid-year is often when complexity tends to catch up with operators. Budgets set in December don’t always survive contact with Q2 realities such as increased turnover, creeping agency spend and the arrival of audit notices. Leaders who confront challenges in June still have time to correct the course before year‑end.

Flexibility without simplicity

In December, CMS issued an interim final rule repealing the minimum standards enacted by the prior administration. The agency removed the requirement that nursing homes provide 3.48 hours of nursing care per resident day, including 0.55 hours from an RN and 2.45 hours from a nurse aide per resident day.

But repeal does not mean deregulation. CMS also removed the 24/7 on‑site RN requirement but reinstated its longstanding policy that facilities employ an RN for at least eight consecutive hours a day, seven days a week, and designate an RN as director of nursing full‑time unless a waiver applies.

The facility‑assessment rules from the 2024 final rule remain in force. State‑level workforce rules also remain: many states maintain their own minimums and facilities must understand and comply with them. The bottom line is that leaders now have more latitude to tailor their workforce to their census and acuity, but also have a greater obligation to document their decisions and results.

Transparency ratchets up

Just as the staffing mandate was being undone, CMS expanded insight into the workforce decisions that facilities make. The new Medicare cost report CMS 2540‑24 is a significant shift, as it now requires operators to disclose both the cost and hours of all outsourced labor.

Paired with ongoing payroll‑based journal reporting, the new disclosures give regulators, researchers and the public a clearer view of who is covering the schedule and at what cost.

A workforce that’s better, yet brittle

The healthcare facility workforce has improved since the depths of the pandemic, but it is far from stable. AHCA/NCAL’s 2026 Workforce Report notes that facilities added 40,700 jobs in 2025, an average of roughly 3,400 workers a month. That’s clear progress, but the same report points out that nine in ten providers still find recruitment difficult.

The BerryDunn report echoes the caution: shortages remain widespread, reliance on agency labor has fallen in some markets, but rising wages continue to press margins. In practice, a building that feels stable today may be one resignation, one sudden census spike or one regional hiring battle away from a workforce gap. Mid‑year is the time to stress‑test those assumptions.

Audits move into the spotlight

If 2025 was a year of uncertainty, 2026 is a year of enforcement. CMS began auditing VBP and QRP data in January, with Healthcare Management Solutions expected to review records from up to 1,500 randomly selected SNFs, roughly 10% of certified providers. Each provider must submit medical records for up to 10 MDS assessments via a portal within 45 calendar days of notification, with only five business days to identify a point of contact. Retrospective payroll‑based journal audits also continue.

The message is clear: compliance readiness has moved from administrative housekeeping to operational risk, and documentation matters as much as workforce decisions.

What facility leaders must account for

Taken together, these trends make workforce strategy planning a concern for the entire organization. Leaders are juggling coverage reliability, cost control, burnout and retention and compliance readiness, with teams that were already stretched thin a year ago.

Instability is no longer confined to HR; it shows up as financial leakage when contract costs climb, operational weakness when acuity outpaces scheduling and compliance exposure when an audit hits mid‑quarter. The organizations that navigate 2026 most successfully are those that treat workforce strategy as enterprise strategy.

Why June matters

Mid‑year can be a good diagnostic point where the gap between the workforce plan and reality is visible, but still correctable. An effective mid‑year review looks at where regulatory exposure and workforce fragility intersect: coverage stability across units, turnover exposure, cost volatility, over dependence on outside resources, scheduling redundancy, operational weaknesses and compliance readiness. The goal isn’t a perfect score but an honest reading of risk so that the second half of the year can see proactive growth rather than reactive fixes.

Building resilience as a strategic advantage

The providers who will look strongest when 2026 cost reports are filed and the first round of VBP audits concludes are those who use mid‑year to shift from reactive scheduling to strategic workforce planning.

That means knowing where coverage is fragile before a call‑out exposes it, understanding which units have the highest turnover risk, and seeing over dependence on outside workers clearly enough to reduce it deliberately.

ShiftKey collaborates with leaders who use a marketplace of independent licensed professionals to add flexibility and transparency to their workforce strategy, not to replace internal teams but to build resilience into how they cover care. For facilities weighing what June should look like, we’ve developed a workforce resilience scorecard to surface risks that aren’t obvious day‑to‑day.

Transparency, audits and workforce economics will define 2026 for skilled nursing and long‑term care operators. Leaders who assess honestly and adjust mid‑year will be best positioned for the second half of the year.

Sources

BerryDunn. “How 2025 data trends & regulatory updates impact nursing facilities in 2026.” 

American Hospital Association. “CMS repeals minimum staffing requirements for skilled nursing, long-term care facilities.” 

AHCA/NCAL. “Report: Nursing Homes Making Significant Progress with Workforce.” 

KFF. “A look at nursing facility characteristics in 2025.”