While many skilled nursing industry providers expect occupancy recovery to be at least another year away, as census climbs toward numbers not seen since 2020, some remain less confident that long-term care will fully bounce back.

“I think the truth for most of the industry is that we thought by now we would be at the new normal,” Ray Thivierge, SavaSeniorCare’s chief strategy officer, told Skilled Nursing News. “We knew occupancy was going to be somewhat diminished from where we were but I think now there’s this realization that our long-term care occupancy may never recover.”

While SavaSeniorCare continues to divest in the skilled nursing space after moving a 29-asset long-term care portfolio last September, it remains one of the largest providers of short-term and long-term health care with SNFs in 23 states.

A recent Pulse survey conducted by Skilled Nursing News also gave a window into current occupancy recovery expectations. Though unscientific and relatively small in size, the survey showed that providers believe that staffing challenges will continue to prevent a full recovery that some had hoped would happen by now.

Among the survey’s respondents – 30 in all ranging from small, mid- and large-size operators – 86.7% had not returned to pre-pandemic levels. In fact, more than 20% of respondents indicated that they didn’t expect occupancy to fully recover until the second half of 2023 – while 6.9% said it wouldn’t be until 2024 or later.

Only 13.33% of respondents said that facility occupancy had already returned to pre-pandemic levels.

Occupancy recovery remains difficult to predict

American Health Care Association President and CEO Mark Parkinson recently told Skilled Nursing News that despite some encouraging signs in early 2022, the industry is likely still another full year away from full recovery.

With occupancy still down and operational challenges forcing some facilities to close, Parkinson has expressed concern about the timing of proposed Medicare cuts that could stymie the industry further.

CMS earlier this month unveiled a 4.6% cut to the Patient-Driven Payment Model (PDPM) and 3.9% increase to Medicare payments for the sector. The PDPM cut amounts to a total loss of $320 million in Medicare funding, according to the agency.

While not quite at pre-pandemic levels yet, Wesley Rogers, president and CEO of Brickyard Healthcare, is more optimistic that Brickyard will get there sooner than later.

He told SNN that after hitting a pandemic-low around November and December, Brickyard’s facilities have been on a steady climb.

“I don’t think it’s going to take another year, so long as we can be in a good spot with low levels of Covid positivity,” he explained. “The last two months have been better for us with less Covid positivity and more stabilized staffing for our care centers.”

Since January 2021, Brickyard’s occupancy numbers have grown from 1,596 to 1,917 patients – amounting to about 20% growth.

Moving from a large skilled nursing facility operator spanning several states to a Midwest-based group of health care providers, Brickyard Healthcare rebranded from Golden Living early this year as it looks to be a more regionally focused provider.

“What we’re seeing now is higher volumes of referrals and inquiries about placements in nursing homes more so than we even had seen prior to the pandemic,” Rogers said.

Rogers attributed the census improvements seen at his facilities to improving Covid numbers and less agency staffing.

But that transition hasn’t been as easy to do for everyone.

For providers that operate in states with a minimum staffing requirement, of which there were 13 respondents in the SNN Pulse Survey, most – 84.62% – said their need to meet the requirement resulted in more agency staffing.

In states like New York, which reportedly has the largest Medicaid reimbursement shortfall in the nation, spikes in staffing agency costs are said to be exorbitant with some agencies charging up to $70 an hour for certified nursing assistants (CNAs).

With a new staffing law now in effect in the state, such budget shortfalls may not be realistic for some operators going forward, especially if federal funding dries up.

Referrals coming back for some but not for others

Hospital referrals continue to drive nursing home census and for the operators that said their census had returned to pre-pandemic levels, getting those referrals proved to be a big reason why.

Half of SNN’s survey respondents said hospital referrals returning assisted in boosting occupancy, followed by higher acuity (25%) and being able to fully staff buildings (25%).

“There were some situations where we had to put admissions on hold during certain times over the last year, but we’re not in a position where we feel like we have to do that anymore,” Rogers said. “We’ve been able to get to a much better place with our staffing levels.”

While that may be the case for a regional operator like Brickyard, Biden’s push to expand home and community based services (HCBS) has put some smaller single-facility operators like Wisconsin-based Odd Fellow Home in a more difficult spot.

CEO Charlene Everett said she’s seen a decrease in Medicare referrals due to long-term care shifting to the home.

“One of the things that I’m seeing that’s preventing a full recovery … is I think there’s been a realization from the health care community that they can skip the nursing step in discharge,” she told SNN. “There are people who would historically have been referred to a nursing home for therapy following a hip replacement and they’re being sent home without patient therapy.”

In fact, for the operators that hadn’t returned to pre-pandemic occupancy levels, most listed staffing challenges limiting admissions as the biggest reason why (57.69%), while fewer referrals from hospitals and acute care partners (15.38%) was also considered a primary factor as well, according to the survey.

Everett is dealing with both at the moment.

“We are suffering from staffing issues,” she said. “I have a fully closed wing and I am anticipating a second closed wing because we can’t stop it.”

Odd Fellow Home, an 88-bed skilled nursing facility part of the Odd Fellow Rebekah Home Association Inc., hit 70% occupancy at one point during the pandemic, but that number has been fluctuating throughout.

“When Medicare picks up, then our census improves. The long-term care census has remained pretty stable so it’s basically whether or not we are getting the referrals and that’s down right now,” she said.

Before Covid, Odd Fellow Home’s daily census was between 82% and 84% but as of this month, that number has dropped to 59%.

“Covid has pretty much destroyed my campus and it started with census,” Everett said. “The census that remained high was the state funded census, the medical assistance.”

Short-term solutions without long-term fixes

The skilled nursing sector faces strong headwinds in the near future as Medicare cuts, staffing minimums and cuts to therapy have all been put on the table in recent months.

More than one-third of nursing homes in the U.S. could be at financial risk if the Centers for Medicare & Medicaid Services stands by its proposed funding cut and federal Medicaid dollars tied to the public health emergency end in 2022.

Since 2015, more than 1,000 nursing homes have closed – 327 of which occurred during the pandemic. That number could jump to more than 400 SNFs in 2022 alone, according to a report released by AHCA/NCAL.

“The last two years have been a nightmare,” Everett said.

One silver lining for Odd Fellow Home was when the National Guard was sent to assist nursing homes across several states, including Wisconsin. Twenty-plus states called the National Guard to support nursing homes most recently during the winter months of 2021.

For Odd Fellow Home, the 11 National Guard members sent to the facility proved invaluable but with them now leaving, Everett is left to ask what to do now.

The National Guard worked as CNAs at the nursing home as they cared for patients who were ready for discharge to nursing care but who previously had remained at the hospital due to staffing limitations.

Odd Fellow opened a portion of a 20-bed wing for patients, providing the right level of care at the right time.

“I’m sorry to see them leave,” Everett said. “The downside is that we’ve been able to accept a few more admissions because we have the guard here but now the Guard is leaving and the residents aren’t. So we are facing that.”

Everett said she’s once again had to stop admissions.

“I’m reluctant to leave my role because I don’t know where this campus is going to go. We’re too small to just carry the weight for a very long period of time,” she said. “I don’t know what’s going to happen to long-term care, it’s a concern. County homes, smaller homes, county-funded homes, nonprofits, they are the ones that are going to suffer.”