NIC Notes

Insights in Seniors Housing & Care


By: Bill Kauffman  |  December 29, 2022

October Skilled Nursing Occupancy Rate at Highest Level Since April 2020

COVID-19  |  Market Trends  |  Skilled Nursing  |  medicaid  |  medicare  |  occupancy

“The occupancy rate for skilled nursing properties increased throughout 2022. However, labor continues to be a significant challenge within the industry and some operators are unable to admit new patients due to staffing shortages.” 

-Bill Kauffman

NIC MAP Vision released its latest Skilled Nursing Monthly Report on December 29, 2022. The report includes key monthly data points from January 2012 through October 2022. 
Here are some key takeaways from the report:

The skilled nursing occupancy rate in October recovered the ground it lost in September and rose 53 basis points to 79.4%, its highest level since April 2020. More broadly, there has been positive momentum throughout 2021 and 2022 and the occupancy rate was up nearly six percentage points (598 basis points) since its low point (73.4%) reached in January 2021. However, a rise in COVID-19 cases last year slowed some of the initial momentum. In addition, the staffing crisis in the sector was still a significant burden on skilled nursing operators and limited the ability to accept new patients in some situations. Occupancy was still down 8.2 percentage points from the pre-pandemic February 2020 level of 87.6%. As staffing and wage growth pressures persist, operations for many operators will be under pressure but the long-term demand for skilled nursing services is expected to grow over time. Hence, finding solutions to staffing shortages is a priority.

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Managed Medicare revenue per patient day (RPPD) increased slightly in October but was down 1.4% from year-earlier levels and 4.7% from October 2020. Some operators see opportunity to capture patient volume with the growth of managed care, depending on the operator’s business model. However, the continued decline in managed Medicare revenue per patient day can pose a challenge to operators as the reimbursement differential between Medicare fee-for-service and managed Medicare has increased during the past two years. Medicare fee-for-service RPPD ended October 2022 at $583 and managed Medicare ended at $465, representing a $118 differential. In October of 2020, the differential was $100. 

Medicare revenue mix nudged up slightly from September to end October at 21.4% but was down from its pandemic high of 24.6% set in February 2022. It is down from earlier in the year (January/February) when increased cases of COVID-19 resulted in additional need for the utilization of the 3-Day rule waiver thereby increasing the Medicare census instead of transferring patients to hospitals. Meanwhile, Medicare revenue per patient day (RPPD) increased from $570 in September to $583 in October. Most of this monthly change is likely a result of the increase in Medicare rates to skilled nursing properties for fiscal year 2023. However, it is down from the high this year set in January most likely due to less reimbursement needed for COVID-19 positive patients. 

Medicaid patient day mix held steady ending October at 64.8%. However, it has increased 269 basis points from the pandemic low of 62.1% set in February 2022. In addition, Medicaid revenue mix declined 29 basis points from the prior month, ending October at 51.3%. Medicaid revenue mix is up from earlier in the year (January/February) as patients have now moved from Medicare patient days back to Medicaid, after utilizing the 3-Day Rule waiver. Meanwhile, Medicaid RPPD increased 1.1% from $260 in September to end October at $263. It is up 0.5% from one year ago.

To get more trends from the latest data you can download the Skilled Nursing Monthly Report. There is no charge for this report. 

The report provides aggregate data at the national level from a sampling of skilled nursing operators with multiple properties in the United States. NIC continues to grow its database of participating operators to provide data at localized levels in the future. Operators who are interested in participating can complete a participation form on our website. NIC maintains strict confidentiality of all data it receives.

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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