Nursing Home Payroll Compliance in 2026: What Changed After the Staffing Mandate Repeal

The Biden-era nursing home staffing mandate was repealed in December 2025. If you run a skilled nursing or long-term care facility, you might assume that means less compliance pressure. In practice, the opposite is true. CMS didn’t pull back on oversight — it shifted it. The focus moved from minimum staffing ratios to workforce cost and hours transparency, and the scrutiny now comes through data that goes directly to regulators, researchers, and the public.

Payroll-Based Journal reporting never went away. The new CMS 2540-24 cost report adds requirements to disclose the cost and hours of all outsourced labor. Audits are actively underway. And nine in ten nursing facilities still report difficulty recruiting, which means the workforce pressure hasn’t eased either. Last updated: May 2026.

The Mandate Is Gone. The Oversight Isn’t.

The interim final rule that took effect February 2, 2026 rescinded the 24/7 registered nurse requirement and the minimum nurse staffing hours per resident per day standards. For facilities that were struggling to meet those thresholds, that’s real relief. But the reporting infrastructure that surrounds workforce decisions didn’t change with it.

The new Medicare cost report (CMS 2540-24) now requires operators to disclose both the cost and hours of all outsourced labor — contract nurses, agency staff, and temporary workers. Paired with ongoing Payroll-Based Journal (PBJ) reporting, this gives CMS, state agencies, and the public a clearer picture of who is covering shifts and at what cost. Facilities that have been relying on contract labor to fill staffing gaps now have that reliance visible in public data.

CMS also began auditing VBP and QRP data in January 2026, with reviews covering records from up to 1,500 randomly selected skilled nursing facilities. That’s roughly 10% of certified providers. This isn’t a minor compliance footnote — it’s an active audit environment.

Payroll-Based Journal Reporting: What Facilities Need to Get Right

PBJ reporting requires nursing facilities to submit direct care staffing data, including hours worked by employee type and pay period, on a quarterly basis. The data feeds into CMS’s Five-Star Quality Rating System. Get it wrong and your public rating is affected. Get it consistently wrong and you’re flagged for enhanced oversight.

The most common PBJ errors aren’t intentional — they’re the result of manual data entry across systems that don’t talk to each other. When time and attendance lives in one platform, payroll in another, and PBJ submissions get compiled from a spreadsheet, the margin for error is wide. A single misclassified employee type or incorrect hours entry can distort the data that regulators use to evaluate your facility.

The solution isn’t more manual checking. It’s removing the manual handoff entirely — connecting time and attendance to payroll to compliance reporting in a single system, so the data that flows to CMS reflects what actually happened in your facility.

The Workforce Challenge Hasn’t Improved as Much as the Headlines Suggest

Nursing facilities added 40,700 jobs in 2025, according to the American Health Care Association. That sounds like progress, and it is. But the same data shows that nine in ten providers still find recruitment difficult. The deficit is smaller than it was at the peak of the pandemic workforce crisis — but it’s still a deficit.

Retention is where the real leverage is. Recruiting to replace staff you’re losing costs more than keeping the staff you have. And in nursing facilities, where orientation, competency validation, and credentialing take meaningful time, turnover is especially expensive. A CNA who leaves after three months takes all of that investment with them.

The operational factors that drive early turnover in nursing facilities are consistent: payroll errors, slow onboarding, limited self-service access, and the feeling that the back-office systems don’t support the people doing the hardest work. None of those are unsolvable.

How Netchex Supports Skilled Nursing and Long-Term Care Facilities

Netchex is built for the healthcare workforce — including the large, mixed teams of RNs, LPNs, CNAs, dietary, housekeeping, and administrative staff that skilled nursing facilities run on. The platform connects time and attendance directly to payroll, reducing the manual entry that causes both PBJ errors and paycheck mistakes. Credential tracking keeps certification records current. Digital onboarding gets new hires fully set up before their first shift.

For long-term care operators, that means HR administrators spend less time reconciling data across systems and more time on workforce strategy. Benefits administration, performance management, and learning tools are all in one platform with one login and one support team. When CMS asks for documentation, it’s organized and accessible — not scattered across spreadsheets and email threads.

The agencies that navigate the 2026 compliance environment best will be the ones that built the operational infrastructure to support it. Netchex is that infrastructure.

Frequently Asked Questions

This guide reflects publicly available product information and independent reviewer data (G2, Capterra, Trustpilot, Yelp, Better Business Bureau, Reddit, Software Advice, GetApp) as of 2026. Feature availability and pricing may vary by plan. Contact each provider for current details.

Disclaimer: Any product roadmap or future plans provided herein are for informational purposes only. They do not represent a commitment to deliver any material, code, feature, or functionality. Plans may change without notification. The development, release and timing of any features or functionality described remain at the sole discretion of Netchex, its affiliates, and partners. Netchex does not give legal, tax, or accounting advice. You are responsible for ensuring your use of Netchex product meets your individual business and compliance requirements.

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