Occupancy at the nation’s skilled nursing facilities remains stalled well below pre-pandemic levels, prompting a major data provider in the space to sound alarm bells about the financial state of the space heading into a potentially devastating winter.
The nation’s SNFs were 74% full during the third quarter of 2020, the National Investment Center for Seniors Housing & Care (NIC) announced Wednesday.
Though that figure represents a marginal increase from the second quarter, it’s far below the 84.9% and 83.5% marks set in February and March, respectively.
At the same time, NIC joined other sources in quantifying the recent jump in novel coronavirus infections at long-term care facilities: In September, the group’s COVID-19 tracking database logged a positive rate of about half a percent. That figure rose to just under 1% during the week ended November 1.
With nursing homes battling spiking COVID-19 cases and their typical source of income still at cycle lows, the Bethesda, Md.-based organization indicated that the trend “threatens their long-term survival.”
“Significantly lower occupancy and greater operating expenses have created unprecedented challenges for skilled nursing operators,” NIC senior principal Bill Kaufman said in a statement. “They are bracing for a difficult winter, given the latest surge in COVID-19 cases and no immediate additional government intervention. Due to COVID-19, NIC expects occupancy to remain dangerously low in the fourth quarter before vaccines become available to health care workers and skilled nursing residents.”
The suspension of non-emergency surgeries and consumer fears of coronavirus have conspired to drive those occupancy numbers down across the country, though urban areas have seen a steeper dive (11.8 percentage points) than their rural counterparts (8 percentage points).
The sector has already received billions in aid from the federal government through various channels, including direct CARES Act relief, Paycheck Protection Program loans, and flexibilities such as a waiver of the three-day prior hospital stay requirement for subsequent Medicare skilled nursing coverage.
Critics and resident advocates have argued that the industry has benefited enough from federal largesse, with a particular focus on the “no strings attached” terms of early CARES Act disbursements; the Department of Health and Human Services (HHS) imposed value-based parameters on the most recent round of about $5 billion in aid.
But industry leaders have repeatedly called on Congress to significantly increase financial support for the sector, particularly as operators still struggle with securing enough personal protective equipment (PPE) and frontline caregivers to take increasingly dangerous shifts.
NIC acknowledged that the government’s steps “helped keep major sectors of the economy afloat,” but warned that the uncertainty around a potential second stimulus could leave long-term and post-acute providers in the lurch.
“Many skilled nursing facilities survived the spring and summer because Congress authorized unprecedented financial aid,” NIC chief economist Beth Burnham Mace said in a statement. “But as funds become exhausted and COVID-19 cases rise with little likelihood of immediate government intervention, it will be difficult for many facilities to continue sustainable operations.”
There was one area of optimism in the NIC report: The proportion of Medicare revenue, which typically represents the highest per-day payments, has actually increased 47 basis points since March — driven primarily by the three-day waiver.
“As overall occupancy has declined dramatically during the pandemic creating significant pressure on skilled nursing operators, Medicare patient days likely did not decrease as much as it would have,” NIC observed.