Last month, the National Investment Center for Seniors Housing & Care (NIC) reported that the occupancy in U.S. skilled nursing facilities (SNFs) reached 83.7 percent in the first quarter of 2019, this being the first year-over-year increase since January 2015. NIC’s first quarter 2019 Skilled Nursing Data Report showed increased occupancy in both rural and urban areas.
SNFs are inpatient health care facilities for patients who require nursing, rehabilitation or related services, but do not require treatment in an acute care facility.
“The continued upward trend in skilled nursing occupancy this quarter suggests we are seeing more than flu season and other seasonal factors driving the increase,” said Bill Kauffman, senior principal at NIC, in a June 12 statement. “Occupancy was also up between March 2018 and 2019, suggesting supply and demand are becoming more closely aligned. NIC will continue to monitor reimbursement, labor costs and other data to see if any of these factors might be contributing to facility closures, especially in some rural areas,” says Kauffman.
Medicare Supplement Plans Found to Impact SNF Occupancy
NIC says that skilled nursing revenue is increasingly because of patients in Medicare Advantage (MA)—health insurance plans, sometimes called “Part C,” offered by private companies approved by Medicare. According to NIC data, MA plans now represent 14 percent of total skilled nursing revenue in urban areas and 5.4 percent in rural areas.
Medicaid patients account for most of the patient population in SNFs, adds the NIC experts, even though Medicaid reimbursement in many states has not kept up with the cost of care. This, among other factors, is contributing to the recent epidemic facility closures.
Adds Beth Mace, NIC’s chief economist, “Skilled nursing is increasingly reliant on Medicare Advantage and Medicaid for revenue, which is challenging many facilities’ financial wellbeing.” She notes, “Reimbursement rate pressures, competition from other care settings, and high personnel costs are also impacting the sector.”
NIC is a 501(c)(3) organization established in 1991 whose mission is to enable access and choice by providing data, analytics, and connections that bring together investors and providers in independent living, assisted living, memory care, skilled nursing and post-acute care. Through its industry leading annual conferences, NIC MAP® Data Service, research, analytics and sector outreach,