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Continued Low Occupancy at Many U.S. Skilled Nursing Facilities Threatens Their Long-Term Survival

Many facilities need new federal funding to get beyond COVID-19 crisis

 

ANNAPOLIS, Md. (December 2, 2020)—Occupancy at U.S. skilled nursing facilities was up marginally between the second and third quarter of 2020 to 74.0 percent but remained significantly below levels reported in February (84.9%) and March (83.5%) when COVID-19 began impacting the United States, according to data from NIC MAP® Data Service (NIC MAP) provided by the National Investment Center for Seniors Housing & Care (NIC). The decline has been more severe in urban areas as occupancy fell 11.8 percentage points since February versus the 8.0 percentage point decline in rural areas in that same period.

Skilled nursing is an inpatient healthcare option for people who need rehabilitation or related services but do not require hospitalization. Sharply declining occupancy coupled with the high cost of personal protective equipment, COVID-19 testing, and hazard pay is placing the skilled nursing sector under unsustainable financial strain.

“Significantly lower occupancy and greater operating expenses have created unprecedented challenges for skilled nursing operators,” said Bill Kaufman, senior principal at NIC. “They are bracing for a difficult winter, given the latest surge in COVID-19 cases and no immediate additional government intervention. Due to COVID-19, NIC expects occupancy to remain dangerously low in the fourth quarter before vaccines become available to healthcare workers and skilled nursing residents.”

Congress enacted the CARES Act and Paycheck Protection Program earlier this year, which helped keep major sectors of the economy afloat during the pandemic. Skilled nursing was also aided by the Centers for Medicare and Medicaid Services waiving its three-day hospital stay requirement, which extended coverage to more people impacted by COVID-19. This is evident in NIC MAP’s recent Medicare data trends.

“Many skilled nursing facilities survived the spring and summer because Congress authorized unprecedented financial aid,” said Beth Burnham Mace, NIC’s chief economist. “But as funds become exhausted and COVID-19 cases rise with little likelihood of immediate government intervention, it will be difficult for many facilities to continue sustainable operations.”

In a recent survey by the American Health Care Association, 72 percent of nursing home operators said they will not be able to maintain operations for a year under current conditions. Forty percent said they would be unable to last six months.

Data from NIC’s Skilled Nursing COVID-19 Tracker shows that nearly half of one percent (0.48%) of residents tested positive for COVID-19 at the end of September. During the week ending November 1, that figure had risen sharply to just under one percent (0.94%).

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Note: Click here to access the latest skilled nursing data, featured within a NIC MAP Data Service monthly report which will be updated at 4:30 p.m. ET.

Contact: Sarah Schmidt at 860-227-8216, SSchmidt@MessagePartnersPR.com.

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