NIC: Skilled Nursing Occupancy Rose Year-Over-Year for First Time Since 2015

After four years of declines, skilled nursing occupancy inched up year-over-year between the first quarters of 2018 and 2019, a major industry data tracker announced Wednesday.

Nationwide occupancy at skilled nursing facilities ticked up 28 basis points to 83.7% in the first quarter of the year, according to the most recent data release from the National Investment Center for Seniors Housing & Care (NIC). That gain represents the first year-to-year increase since January 2015, the Annapolis, Md.-based firm noted, as well as 77-basis-point jump from the fourth quarter of 2018.

While the industry typically sees census gains between the fourth and first quarters as the winter flu season drives demand for institutional nursing services, NIC senior principal Bill Kauffman said the trend goes beyond influenza this year.


“The continued upward trend in skilled nursing occupancy this quarter suggests we are seeing more than flu season and other seasonal factors driving the increase,” Kauffman said in a statement announcing the results. “Occupancy was also up between March 2018 and 2019, suggesting supply and demand are becoming more closely aligned.”

NIC culled its data from about 1,400 nursing facilities operated by 26 different companies, with yearly and quarterly gains across both rural and urban providers — though buildings in cities and metro areas saw the greatest quarterly boosts.

Source: National Investment Center for Seniors Housing & Care (NIC)

Aside from the upbeat occupancy news, NIC found that some nagging trends persisted in the first quarter of the year: Managed Medicare patient day mix rose 106 basis points from the fourth quarter of 2018 and 169 basis points from the start of last year, clocking in at 12.1%.


“This continued growing influence on operator revenue further demonstrates the importance of the managed Medicare payer within the skilled nursing sector,” NIC observed in its report. “This trend is evident across both the urban and rural areas.”

The rise of managed Medicare, most commonly in the form of popular Medicare Advantage plans for seniors, has been a thorn in the side of operators due to routinely lower reimbursements as compared to regular Medicare. In the first quarter of this year, for instance, the average managed Medicare revenue per patient day (PPD) sat at $432, as compared to $520 for traditional Medicare.

Medicaid reimbursements, which have also made headlines in states across the country as the gaps between Medicaid revenues and expenses widen, clocked in at $210 PPD for the quarter, with rural providers seeing an average payment of $196.

“Skilled nursing is increasingly reliant on Medicare Advantage and Medicaid for revenue, which is challenging many facilities’ financial wellbeing,” Beth Mace, NIC’s chief economist, said in a statement. “Reimbursement rate pressures, competition from other care settings, and high personnel costs are also impacting the sector.”

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