A proposed 2026 Trump administration budget request would shift nursing home survey priorities, further delaying the time between standard inspections at many facilities.

The Centers for Medicare & Medicaid Services budget justification published late Friday calls for a $45 million increase in survey spending across multiple sectors next fiscal year. But it also prioritizes complaint surveys in a way that would reduce the availability of surveyors to conduct routine, annual inspections mandated by law.

The document from the Department of Health and Human Services shows the percentage of nursing home standard surveys completed each year would fall from 74% in fiscal year 2024 to a projected 65% completion rate in fiscal year 2026.

The shift is an intentional one that would encourage state surveyors to respond to complaint surveys before standard surveys in most situations, prolonging a trend that skyrocketed during the pandemic. A focus on infection control surveys and complaints early in COVID — as well as months when inspectors were largely barred from conducting regular inspections — sent the average time between surveys soaring in almost all states.

The average nursing home went three years without a routine inspection in many states. By this spring, some states were still at those levels, leaving uninspected nursing homes with grossly outdated Care Compare metrics and star ratings.

“Given there are no proposed changes to the Five-Star rating methodology for the health inspection domain, a reduction in the percentage of facilities receiving recertification surveys will have negative effects on providers who had challenging outcomes on their last inspection. … It could be two years or more before the bad survey cycles off,” said Melissa Fedun, co-owner of Formation Healthcare Group.

She noted that there is also no way for consumers to tell whether complaint surveys follow facility reported incidents or consumer- or staff-driven complaints. In that respect, she added,  increasing complaint-based surveys could ultimately be misleading to consumers.

“Complaint surveys are hyper-focused on a narrow scope of the regulations specific to the complaint, rather than providing a full review of operational compliance across all regulatory areas, which occurs during the recertification process,” Fedun said.

The 194-page CMS proposal is one small part of the presidential spending plan, which is almost certain to change significantly during the Congressional budget negotiation process.

Option to double up

If the budget proposal were to become CMS practice, state agencies could try to catch up on overdue standard surveys by conducting them concurrently with complaint surveys, suggested Steven Littlehale, chief innovation officer for Zimmet Healthcare Services Group

“If a complaint survey is initiated and the facility is due or overdue for a standard survey, the state survey agency has the discretion to combine the two. This practice can be common since it’s efficient, and it avoids unnecessary disruption for the provider,” he told McKnights Long-Term Care News Monday. “This is not a shortcut. The nursing home must still meet all applicable regulatory requirements, nor will the scope of the complaint be diluted.”

But he added that the practice is very subjective because there is no guarantee a nursing home with a negative standard survey it deserves to have replaced is going to have a complaint investigation that might or might not trigger a standard survey.

He also noted that CMS has “made no attempt to remedy the situation” of the effect survey backlogs have on providers, their referral partners or the consumers who choose to use Care Compare.

“Solutions are available to CMS that would benefit the consumer, by giving them more accurate up-to-date information, and also bringing a sense of fairness to the providers and various stakeholders,” he said.

Congress never acted on a 2023 proposal to increase funding for surveyors by more than $500 million, a push then-Sen. Bob Casey (D-PA) said would have helped fund critical staff at survey agencies after years of stagnant pay. Instead, CMS and states have used their limited resources to focus on rapid response to complaints — sometimes at a steep cost to nursing homes.

Complaints get top billing

CMS classifies complaints as Immediate Jeopardy (IJ), Non-IJ High, Non-IJ Medium  and Non-IJ Low (NIJL), with IJ and NIJH complaints triggering an onsite inspection within two days, per the budget document.

Between 2015 and 2024, IJ determinations increased by 75%. When substantiated, those can carry a fine of up to $10,000 per day and per instance.

“Both higher severity-level complaints cause abrupt shifts in planned and scheduled workload completion, resulting in a greater financial burden on the Program. CMS has maintained prioritization of funds to pay for the rise in complaint surveys by reducing support to standard surveys, resulting in a year-over-year decrease in the number of recertification and validation surveys,” the new budget document confirmed.

That approach appears to satisfy Washington’s new cadre of decision makers who said their plan would direct survey agencies to move initial surveys to the third-lowest response tier, making them a top-line priority “if certain timelines have elapsed.”

State-level survey agencies would get $397 million under the proposed budget, with $330 million earmarked for nursing home, home care and hospice activities.

“This FY 2026 Budget request lays the path towards enabling the states to maintain certainty to retain and potentially hire additional workforce to handle the increased workload, and to better anticipate/react to any future public health emergencies that may arise,” the budget states.

Broader CMS budget choices

Overall, the CMs budget is set to decrease $661 million next year.

On Monday, a former CMS executive warned that the agency must hew closely to its traditional oversight responsibilities, even as it explores innovative models and looks to invest heavily in in-house tech teams and artificial intelligence tools.

“CMS administers critical functions that support the nation’s entire health system, including guaranteeing the safety of hospitals and nursing homes, setting the coding and data standards for health care transactions, and setting national reimbursement standards that are used by other payers,” wrote Jon Blum, a non-resident senior scholar of USC Schaffer Institute and former principal deputy administrator and COO at CMS, in Health Affairs.

By focusing more on its role as an insurer, CMS under HHS Secretary Robert F. Kennedy might allocate more resources to areas of the agency that have the greatest spending demands, are under more public scrutiny or are at risk of failure.

But he said they also could opt to tackle the mission of improving the entire health system and organizational and budget decisions that improve core insurance programs and effectiveness of private health insurance and health systems throughout the country.

“As a maximizer of such ‘public goods,’ CMS would make even greater investments setting priorities for health system redesign through novel payment development; assuring safety and quality of hospitals, nursing homes and other healthcare facilities; establishing cyber security standards to protect financial and data transactions systems; and promoting systemwide data exchange and interoperability standards to reduce system-wide burden,” Blum wrote.