NIC: Medicare Revenue Mix Drops, Suggesting Decline in Three-Day Stay Waiver Use

Skilled nursing occupancy rose for two months in a row to close out Q1, ending March at 71.6%, according to a new analysis from the data service affiliated with the National Investment Center for Seniors Housing & Care (NIC).

The NIC MAP Vision report drew from 29 contributors for March, representing 1,473 total SNF properties, and 29 contributors for February, representing 1,470 total SNF properties. The March occupancy rate represents a 49 basis-point increase from the end of February and an 89 basis-point increase from the occupancy low in January, the analysis noted.

“The expectation was occupancy would increase given the decline in COVID-19 cases across the country, but the question remains of how fast it will recover,” the report said. “Although occupancy seems to have stabilized, it remains very low compared to pre-pandemic levels. It is 13.2 percentage points below the February 2020 occupancy when it was 84.8%.”

In addition, overall Medicare patient day mix is still dropping, falling 127 basis points from February to 12.2% at the end of March. This represents the third month in a row Medicare patient day mix has declined, falling 309 basis points from the high set in December 2020.

Medicare revenue mix also fell 201 basis points from February to 21.4% by the end of March.

“This suggests the utilization of the three-day rule waiver is declining, which makes sense as COVID-19 cases declined significantly since January,” the report argued.

Under normal circumstances, a patient must have a three-day stay in the hospital as an inpatient to have Medicare cover skilled nursing care, but CMS waived the requirement at the start of the pandemic. A bill to make the waiver permanent was recently introduced in the House of Representatives, though experts have predicted that the three-day stay requirement is likely to return in some form after the COVID-19 emergency ends.

The report also posited that the three-day waiver likely played a role in lower Medicaid revenue mix; Medicaid revenue mix ended March at 49.3%, part of a continued increase from the low of 47% in December 2020.

Managed Medicare patient day mix stayed relatively flat from February, though managed Medicare revenue mix was up 183 basis points from the end of 2020, ending March at 11%.