Staffing shortages and wage inflation continue to challenge the industry’s lurch back to sustainable occupancy levels into the new year, despite data from last fall showing an increase between September and October.

The occupancy rate sat at 75.4% by the end of October, 382 basis points above the low point in January 2021, according to NIC MAP data released by NIC MAP Vision on Dec. 30. The increase negates the first decline in occupancy after a seven-month positive track record – down 27 basis points from August to September.

Occupancy still lags behind pre-pandemic levels; it was at 85.8% in February 2020. Forty-seven states, 26 SNF contributors and 1,273 properties participated in the report between September and October.

“Additional challenges may be on the horizon with the arrival of the fall/winter season and as the new omicron variant becomes dominant,” NIC MAP Vision authors noted, along with persistent labor shortages causing limited admissions and subsequent slowed occupancy recovery.

Authors expect nursing home wage growth to remain elevated in 2022 as inflation, measured by the Consumer Price Index (CPI), and staffing shortages plague the industry this year.

Managed Medicare revenue per patient day (RPPD) fell 0.2% in October, continuing its decline to rest at $448.69 – authors said the statistic is down 3.3% from last year at this time, and has been trending down since NIC began monitoring managed Medicare in 2012.

“This persistent decline in managed Medicare RPPD continues to result in an expanded reimbursement differential between Medicare fee-for-service and managed Medicare, which has accelerated during the pandemic,” authors said.

Medicare fee-for-service (FFS) RPPD ended October at $570.25; the gap between Medicare FFS and managed Medicare RPPD increased from $96 in 2020 to $121.57. Managed Medicare revenue mix, meanwhile, has remained steady, NIC MAP Vision authors added, pointing to increased admissions to skilled nursing facilities with elective surgeries allowed again in hospitals.

Medicare revenue mix increased from September to October, but has declined 455 basis points to 20.2% overall, since January 2021. Authors suggest the trend is tied to less utilization of the 3-Day rule waiver implemented by the Centers for Medicare & Medicaid Services (CMS) to allow hospitals to discharge patients to nursing homes without the prerequisite three days in an acute care setting.

“[Waiver use] fell as COVID-19 cases declined relative to the month of January,” authors said.

Medicare RPPD increased from $566 in September to $570 in October as a result of the increase to Medicare rates for FY2022, while decreasing 0.8% compared to this time last year due to less reimbursement needed for COVID patients.

Federal support for Medicare FFS reimbursements involving COVID patients continues, but cases are lower compared to October 2020.

Lastly, Medicaid RPPD increased from September to October, resting at $249. The statistic declined the first half of 2021, NIC authors explained, before increasing in July to coincide with additional reimbursement for a surge in cases at the time, tied to the delta variant.

“Medicaid reimbursement has increased more than usual as many states acted to increase reimbursement related to COVID-19,” authors said, with NIC data showing a 5.2% increase since February 2020. “On the other hand, covering the cost of care for Medicaid patients is still a major concern as reimbursement does not cover the cost in many states.”