News & Press Releases

Skilled Nursing Property Occupancy Up in Q1, Again Highlighting Seasonality

Managed Medicare reimbursement rate increases for first time in two years

FOR IMMEDIATE RELEASE: June 8, 2017

Contact:    Biba Aidoo, 410-267-0504 or communications@nic.org

Annapolis, Md. – The National Investment Center for Seniors Housing & Care (NIC) today released its first-quarter 2017 NIC Skilled Nursing Data Report. Data in the report show that skilled nursing property occupancy increased to 82.6% at the end of the quarter, up 36 basis points from the prior quarter and down 163 basis points year-over-year.

“The first quarter data typically shows an uptick in occupancy due to seasonal factors, such as the flu.  Over the past couple years, in 2015 and 2016, the first quarter represented the high point for occupancy in each year,” said Bill Kauffman, senior principal at the National Investment Center for Seniors Housing & Care (NIC). “We did see a monthly occupancy rate decline in March after increases in January and February, so we will be watching the data carefully to see if the decline continues into the second quarter. Considering the current environment in post-acute care, competition for Medicare patient days is higher than at any time in recent memory for skilled nursing property operators. Therefore, occupancy could feel additional pressure until the supply and demand equation comes into better balance.”

Managed Medicare patient day mix reached its highest monthly percentage within the data time-series in the first quarter, in the month of February. Managed Medicare patient day mix increased quarter-over-quarter and on a year-over-year basis, while managed Medicare revenue per patient day (RPPD) increased quarter-over-quarter for the first time in two years. “The increase, while subtle, reinforces earlier NIC analysis suggesting a trend away from what had been a rapid decline in the managed Medicare RPPD,” said Beth Burnham Mace, chief economist for NIC.

The current report shows the growing importance of managed Medicare within the skilled nursing sector as that patient day mix trended upward, reaching its highest point over the past five years in the month of February. Paying attention to managed Medicare trends will become ever more important as nearly half of all seniors may be enrolled in managed care over the next 10 years.

The increase in occupancy was accompanied by an increase in quality and skilled mix, which were driven by the uptick in Medicare and managed Medicare patient day mix.  “This uptick was not unexpected in terms of seasonality and may have been further heightened by a relatively more significant flu season,” Kauffman added. Despite this recent increase, Medicare patient day mix has been on the decline for several quarters.

Private revenue per patient day (RPPD) climbed 1.5% quarter-over-quarter and by 2.7% on a year-over-year basis. The yearly increase may not be enough to offset the decline in private patient day mix, which has fallen by 62 basis points on a year-over-year basis, although most of the decline in private day mix occurred in the last quarter.

NIC’s Skilled Nursing Data Report is released quarterly to provide operators and investors with timely, relevant data that is not readily available from other sources. Select metrics include: occupancy, quality mix, skilled mix, patient day mix, and revenue per patient day by payor source. The current report features time-series data from April 2012 through March 2017. NIC has collected this data since the fourth quarter of 2011.

The NIC Skilled Nursing Data Report is available at http://info.nic.org/skilled_data_report_pr. 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 will grow its base of participating operators in order to provide data at localized levels in the future. Operators who are interested in participating can complete a participation form at http://www.nic.org/analytics/nic-initiatives/skilled-nursing-data-initiative. NIC maintains strict confidentiality of all data it receives.

About NIC

The National Investment Center for Seniors Housing & Care (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. For more information, visit www.nic.org, and follow NIC on Twitter.