Fee-for-service Medicare’s skilled nursing facility (SNF) utilization remained stable at 22.7%, unchanged in the fourth quarter of 2024 compared to the same period a year ago, as Medicare Advantage penetration continued to grow, according to the latest Trella Health 2025 Post-Acute Care Industry Trend Report, released Monday.
Moreover, FFS nursing home utilization rates varied widely across the United States. Nursing home utilization stood at 7.2% in Alaska on the low end and 29.7% in Connecticut on the high end, representing a 22.6% spread, the report states. This wide disparity points to ongoing inconsistencies in discharge practices and access to SNF care, with variation based on state-specific factors, such as hospital partnerships, payer mix, and local care infrastructure, influence SNF referral patterns.
“[This] suggests inconsistent application of skilled nursing care, particularly in transitions from acute settings. In a health care landscape increasingly shaped by value-based care initiatives, skilled nursing facilities have an opportunity to strengthen their partnerships with hospitals by demonstrating their effectiveness in reducing readmissions and managing complex patients,” the report states.
The Trella report also noted a broader shift toward value-based care. As more Medicare beneficiaries enroll in Medicare Advantage (MA), and as providers focus on lowering readmissions and improving care transitions, SNFs may face both challenges and opportunities in adapting to evolving expectations for cost-effective, high-quality outcomes.
Medicare Advantage skilled nursing admissions rose 12.1%, outpacing the 8.5% increase in MA enrollment between 2021 and 2022, which the report said was a sign that utilization may be catching up with MA enrollment growth.
“As MA continues to grow and value-based care gains traction, skilled nursing facilities must actively negotiate for stronger MA reimbursement terms and clearly demonstrate their role in reducing hospital readmissions,” the report states.
The emergence of models like the proposed Transforming Episode Accountability Model, or TEAM, is expected to further shape SNF participation in value-based reimbursement structures, although specific effects on skilled nursing operations are still unfolding.
Medicare Advantage growth
On growth of Medicare Advantage, the Trella report indicates that as of February 2025, 55.4% of Medicare beneficiaries are enrolled in Medicare Advantage, with 30 states now above 50% penetration.
And, between 2024 and February 2025, MA enrollment increased in 45 states and DC. That said, the report states that the pace of MA’s increase was slower than in previous years, although there may be a shift in focus on rural communities, with Wyoming seeing the highest jump at 4.9% and Alaska seeing a smallest rise.
“Understanding which MA plans dominate local markets is crucial for home health and skilled nursing providers seeking favorable reimbursement contracts to showcase their value,” the report notes.
Moreover, skilled nursing facility admission rates are nearly identical across MA plan types – 3.3% for HMO enrollees and 3.1% for PPO, the report notes.
“Skilled nursing admissions appear to be stabilizing after several years of pandemic-related disruption. FFS inpatient discharges with skilled nursing instructions remained steady between the 2021 Q4 and 2024 Q4 reporting periods, ranging narrowly between 1.4 and 1.6 million per year,” the report states. “However, declining adherence rates and a shrinking number of referrals from non-acute settings – largely due to falling FFS enrollment in favor of Medicare Advantage – contributed to a 5.3% drop in FFS skilled nursing admissions between the 2023 Q4 and 2024 Q4 reporting periods.”
Meanwhile, overall inpatient discharges to SNF stayed at 20.3%, 1% below pre-COVID, despite a slight increase in discharge instructions to skilled nursing of 0.2% between the 2023 Q4 and 2024 Q4 reporting periods, the report noted.
