Occupancy in U.S. skilled-nursing facilities remained relatively stable at 83.3 percent in the second quarter of 2019, a 0.5 percent decrease from the first quarter but an increase of 0.5 percent from a year ago. The data come from the National Investment Center for Seniors Housing & Care (NIC). NIC’s second quarter 2019 Skilled Nursing Data Report showed occupancy declining in cities but increasing slightly in rural areas.
Skilled-nursing facilities are inpatient healthcare facilities for patients who need nursing, rehabilitation or related services, but do not require hospitalization.
“Occupancy has been relatively stable during the last 12 months, varying by only one percentage point and staying above its low,” said Bill Kauffman, senior principal at NIC. “The slight decrease from the first quarter likely does not foreshadow a broader trend, because seasonal flu-related admissions that typically spike in late fall through winter trail off later in the year.”
The trend of skilled nursing revenue increasingly coming from Medicare Advantage (MA) — health insurance plans offered by private companies approved by Medicare — eased considerably in the second quarter, with Medicare Advantage revenue down 2.3 percent (from 14.4 percent to 12.1 percent) in urban areas and steady (5.2 percent) in rural areas.
“It’s too early to say if the noticeable decline in skilled nursing revenue from Medicare Advantage will continue,” said Beth Mace, NIC’s chief economist. “On the one hand, Medicare Advantage is becoming an increasingly prominent player. However, like all payers, Medicare Advantage isn’t immune to constant cost containment pressure. The decline in Medicare Advantage revenue this quarter might be attributed to private plans bypassing skilled nursing due to its expense, declining patient length of stay, or lower reimbursement rates. We will need data from subsequent NIC reports to help us better pinpoint contributing factors.”
Medicaid continues to be the fastest growing payer in the skilled nursing sector by revenue per patient day, NIC experts say, even though Medicaid reimbursement in many states has not kept up with the cost of care. This reimbursement shortfall, among other factors, is contributing to the recent spate of facility closures.
