SNF Staffing Rules and Acquisitions: Current Review

Separate the repeal from the duties that remain

CMS published the repeal rule on December 3, 2025, with an effective date of February 2, 2026. It removed the specified 2024 requirements for an RN onsite around the clock and the numerical nursing-hours standards. GAO's review confirms those dates and the scope of the action. This article checked the current federal text on September 6, 2026. (Sources: Federal Register 2025-21792; GAO B-337945)

The repeal does not set a labor budget for a facility. It also does not remove state law, resident care duties or all federal staffing requirements. Use current rule text when reviewing an older business plan, lender file or consultant report.

HPRD means hours per resident day. The older figures appear here only to help readers identify outdated assumptions. They do not prescribe the care or staff any resident should receive.

Read the current nursing-services requirements

Section 483.35 requires enough nursing staff with the skills to meet resident needs and support safety. It calls for nursing services on a 24-hour basis. It also addresses licensed nurses and a licensed charge nurse on each tour of duty, with the stated waiver conditions. (Source: 42 CFR 483.35)

The RN provision requires at least eight consecutive hours each day, seven days a week, and a full-time RN director of nursing unless a specified waiver applies. The director may serve as charge nurse only when average daily occupancy is 60 or fewer residents. These are selected provisions, not the full staffing rule or a safe schedule for every unit.

The rule also addresses nurse-aide skills, hiring, training and registry checks. Using an agency does not remove the need to verify that staff meet the applicable requirements. Have qualified leaders examine the actual roles and records, including who supervises care and responds when needs change.

Verify any claimed waiver

The waiver provisions in 483.35(e) and (f) have different conditions and authorities. They include review or renewal and notice duties. Do not assume that being rural, advertising a vacancy, or facing high wage costs proves the facility has permission to use a different staffing arrangement. (Source: 42 CFR 483.35)

Ask for the decision, covered requirements, dates, conditions, notices and evidence of any required renewal. Have counsel assess whether the proposed ownership or operating changes affect it. A seller's description of a waiver is not enough to put it into the buyer's forecast as a confirmed fact.

Keep state requirements on their own track. A federal waiver cannot be used as a blanket statement about every state duty. The licensing overview explains how to organize those separate questions.

Use the facility assessment to test the buyer's plan

Section 483.71 requires a documented facility-wide assessment of the resources needed for daily care, nights, weekends and emergencies. It must be reviewed and updated as needed and at least annually. A current or planned change that would substantially modify the assessment also triggers review. (Source: 42 CFR 483.71)

The assessment addresses residents, their care needs, staff skills, equipment, services, contracts and other resources. It must inform staffing by resident unit and shift. Required participants include leadership and direct-care staff, and the facility must seek and consider input from residents, representatives and families.

Ask how the proposed deal changes those facts. Will the buyer add a service, admit a different resident mix, change leadership, or replace contracted staff? A historical assessment may not support the new plan. The operating team should connect each material change to the resources and skills it requires.

The rule also addresses recruiting, retention and contingency plans. A staffing budget that assumes every planned employee is available every day needs a practical response to absences and vacancies.

Reconcile schedules, payroll and PBJ

CMS requires direct-care staffing data based on payroll and other auditable records, including agency and contract staff. PBJ provides evidence to inspect. It does not establish that every resident received the care needed or that a summary average describes every shift. (Source: CMS PBJ guidance)

Review weekends, nights and individual units. A quarterly average can hide a gap on a particular day. Check whether apparently similar hours represent the same job type and usable coverage. Paid time off, training time and direct service time need the correct treatment under the relevant records and reporting instructions.

For a fictional arithmetic example, 240 nursing hours divided by 60 residents equals 4.0 hours per resident for that day. The ratio alone does not show the staff mix, shift coverage or care needs. It is not a legal minimum, a market benchmark, or proof of safe staffing.

Preserve reporting through the ownership transition

CMS's PBJ page sets the reporting deadline at the end of the 45th calendar day after each fiscal quarter. Assign responsibility for source records, submission, validation and follow-up. Check the current CMS instructions for the applicable deadline and submission details; do not assume the sale pauses reporting. (Source: CMS PBJ guidance)

The page's August 17, 2026 update says PBJ functionality launched in iQIES and users must register for PBJ roles before submitting data. QIES became read-only. CMS announced its PBJ retirement for September 15, which was still a future date at this article's September 6 review.

Confirm that authorized staff can use the required system, retrieve needed reports and address errors. A payroll vendor's engagement does not prove that the right access and responsibility are in place. Plan the handoff of work without sharing another person's credentials or assuming the old submitter will remain available.

Daily posted staffing information is a separate duty under 483.35(g). Its retention rule is at least 18 months or longer if state law requires. Do not apply that period to every payroll, clinical or PBJ record; determine the relevant retention rule for each record type. (Source: 42 CFR 483.35)

Build a supported recurring-cost bridge

Start with the actual labor costs in the financial statements. Reconcile employee wages, employer costs, overtime and contract labor before making adjustments. Determine whether leadership or direct-care work performed by the owner must be replaced. Costs hidden in another account should not disappear from the buyer's operating plan.

The following annual example is fictional. Assume the operating team has separately supported the required roles and coverage. The numbers illustrate a cost reconciliation; they do not set staffing levels, wages or savings for a real facility.

Each adjustment covers a separate cost. The role-filling and shift-cover rows exclude costs already included in the net agency reduction.

The agency reduction is assumed to be net of all replacement costs and must not remove hours that the plan still needs. If annual adjusted EBITDA before this labor adjustment were $600,000, the $175,000 increase would reduce it to $425,000, with all other items held constant. Use the earnings definitions guide to keep the financial measure clear.

Now assume a separate $60,000 of one-time transition cash is also needed. Keep it visible in the funding plan. It is not included in the recurring cost total and should not be counted again if the underlying expense is already elsewhere in the model. The working-capital guide helps connect payment timing with payroll needs.

Connect findings to the deal and operating handoff

Record each open staffing issue, the supporting evidence, the qualified person assessing it, and the required response. Separate an accounting adjustment from an operating deficiency. A lower price or escrow can allocate financial risk, but it does not provide missing staff or meet a resident's care needs.

When staffing findings involve a correction plan, use the survey evidence guide to connect each action with its actual date and supporting record. Its monitoring example makes missing periods visible. A funded response and a completed evidence review remain separate from agency verification.

Use the SNF diligence checklist to connect this work with clinical records, payment risk, inspections and contracts. The SNF segment guide supplies broader acquisition context. Neither replaces the facility-specific assessment.

Before the handoff, identify who will lead nursing services, manage schedules, approve agency use, maintain records, and follow up on open findings. Build the first-90-days plan around confirmed duties and realistic resources. Planned staff reductions or service changes require their own care and legal review.

Common mistakes in staffing underwriting

• Reusing the repealed federal figures as current universal requirements.
• Assuming repeal means all RN, assessment or state duties ended.
• Treating a waiver as automatic or permanent.
• Using average hours without checking shifts, skills and resident needs.
• Removing agency expense without funding adequate replacement coverage.
• Calling vacancies or unfilled shifts a sustainable earnings improvement.
• Treating a PBJ file submission as proof that the underlying records are correct.

A sound review connects the rules, resident needs, actual coverage and the cost of the buyer's plan. Keep clinical judgments with qualified professionals and make financial assumptions traceable to that operating evidence.