NIC Notes

Insights in Seniors Housing & Care

By: Bill Kauffman  |  September 01, 2022

Skilled Nursing Occupancy Relatively Steady in June 2022

Market Trends  |  Skilled Nursing  |  medicare

“Given the challenges on multiple fronts for skilled nursing operators, recruiting and retaining staff is a number one priority. Operators must build a culture that supports and strengthens their staff”

- Bill Kauffman

NIC MAP Vision released its latest Skilled Nursing Monthly Report on September 1, 2022. The report includes key monthly data points from January 2012 through June 2022.

Here are some key takeaways from the report:

After four months of increases, skilled nursing occupancy declined slightly in the month of June. It decreased 9 basis points from May to end the month at 77.3%. There has been some positive momentum in occupancy as it is up 522 basis points since the low point (72.1%) reached in January 2021. However, COVID-19 cases created additional challenges in 2021 and the staffing crisis in the sector is still a significant burden on skilled nursing operators. Occupancy is down 9.0 percentage points from the pre-pandemic February 2020 level of 86.2%. As staffing and inflation 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.

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Managed Medicare revenue per patient day (RPPD) increased in June but is down 1.4%% from last year in June 2021. The continued decline in managed Medicare revenue per patient day poses a challenge to skilled nursing operators as the reimbursement differential between Medicare fee-for-service and managed Medicare has accelerated during the pandemic. Medicare fee-for-service RPPD ended June 2022 at $581 and managed Medicare ended at $458, representing a $123 differential. Pre-pandemic, in February of 2020, the differential was $98. As managed Medicare continues to grow, operators and investors should pay attention to this trend and adjust accordingly.

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Medicare revenue mix and RPPD have increased for the second month in a row. This is seemingly due to increased cases of COVID-19 from the month of April as more cases have resulted in additional need for utilizing the 3-Day rule waiver and per day reimbursement for COVD-19 positive patients. Medicare revenue mix ended June at 21.9% but is down from its pandemic high of 24.8% set in February 2022. Medicare RPPD is down 2.0% from its pandemic peak of $593 in June 2020. Meanwhile, Managed Medicare revenue mix was down 17 basis points to 10.5% in June. However, this is 240 basis points above the pandemic low of 8.1% set in May 2020.

After increasing two months in a row, Medicaid patient day mix decreased 72 basis points ending June at 65.4%. However, it has increased 250 basis points from the pandemic low of 62.9% set in February 2022. Meanwhile, Medicaid revenue mix declined 134 basis points from the prior month, ending June at 49.6%. One element of the Medicaid revenue share of a property’s revenue is RPPD and that has declined 2.1% since the pandemic high of $254 set in October 2021.

To get more trends from the latest data 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 Bachelor of Business Administration in Finance from the College of Business and Economics at Radford University and his Master of Science in Finance from Loyola College in Maryland. He also holds the Chartered Financial Analyst Designation (CFA).

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