NIC Notes

Insights in Seniors Housing & Care

By: Bill Kauffman  |  July 06, 2016

A Closer Look at the 1Q2016 NIC Skilled Nursing Data Report

Economic Trends  |  Regulatory Environment  |  Skilled Nursing

NIC released its Skilled Nursing Data Report on June 21, 2016. This is the second release of the report and includes key monthly data points from October 2011 through March 2016. In this week’s blog post, we’ll take a closer look at the release and provide a detailed analysis.

Occupancy Increased Quarter-Over-Quarter

Occupancy increased in January and February of 2016 but leveled off in March to end at 83.4%. However, occupancy is down 108 basis points from October 2011, as the decline in length of stay continues to be a challenge. Over the past few years, there also has been more competition from home health and assisted living, which could be affecting occupancy, as well. The bounce back in occupancy from December 2015 to March 2016 is not surprising, consider the winter months often see a pickup of flu cases, slips/falls, and elective surgeries, all of which can cause an increase in occupancy rates. The quarter-over-quarter change in occupancy was 60 basis points, increasing from 82.8% in December 2015. As we dig deeper into the data, however, we see that the year-over-year change was a decrease of 90 basis points as occupancy dropped from 84.2% in March 2015 to 83.3% in March 2016.


Seasonality Effect Weaker in 2016

As NIC mentioned in the 1Q2016 NIC MAP® Data Service subscriber webcast, the inaugural Skilled Nursing Data Report showed a noticeable seasonality pattern over the past few years within skilled mix and quality mix. Skilled Mix and quality mix increased to 26.0% and 35.5%, respectively, in the first quarter 2016, as seasonality continued to play a role this time of year. However, the effect of seasonality was not as strong this year as compared to the last two years, which may be attributed to the relatively late flu season.

For example, quality mix, which represents all payor sources but Medicaid, increased 60 basis points from 34.9% in December 2015 to 35.5% in March 2016. Seasonality played a greater role in the previous two years. From December 2014 to March 2015, quality mix increased 120 basis points from 36.2% to 37.4%. And from December 2013 to March 2014, quality mix increased 130 basis points from 35.8% to 37.1%. It is hard to tell exactly what the cause is, but we will look forward to providing more information as we receive it.

Managed Medicare Rates Still Decreasing

Managed Medicare rates continued to decline as rates decreased 1.2% quarter-over-quarter from $447 in December 2015 to $441 in March 2016. The rates decreased year-over-year, as well: from March 2015 to March 2016, the rate dropped from $468 to $441. This decrease of 5.6% accelerated from the prior year, when rates decreased only 2.8% from March 2014 to March 2015. However, if we look at the quarterly trend, this past quarter does represent a slowdown in the rate of decrease, as the rate decreased faster from October 2015 to December 2016 at 1.7%.

Medicaid Rates Flat Quarter-Over-Quarter

While Medicaid rates increased over the past few years, the latest quarterly measure shows the rates flattening out, with the rate hovering around $198 in December 2015 and March 2016. Medicaid rates did increase slightly over the past year as rates increased 0.7% to $198 in March 2016 from $196 in December 2015. Medicaid rates and private-pay rates have proved to be somewhat of a bright spot when thinking about growth in rates. However, the question to be asked is if Medicaid reimbursement provides enough to care for that long-term patient?


Download the Report

You can download the 1Q2016 Skilled Nursing Data Report at no cost online:

About Bill Kauffman

Senior Principal Bill Kauffman works with the research team in providing research and analysis in various areas including sales transactions and skilled nursing. He has lead roles in creating new and enhanced products and implementation of new processes. Prior to joining NIC he worked at Shelter Development in investing/acquiring, financing, and asset management for over $1 billion in assets. He also had key roles in the value creation and strategic planning and analysis for over 65 entities. He received his Master of Science in Finance from Loyola University Maryland and holds the Chartered Financial Analyst Designation (CFA).

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