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Decline in Skilled Nursing Occupancy Continues Due to COVID-19 Pandemic

NIC data show revenue attributed to Medicare Advantage is down, Medicaid reimbursement is up

ANNAPOLIS (July 7, 2020)—The Centers for Medicare & Medicaid Services’ prohibition on elective surgeries, as well as state and local restrictions to flatten the curve of COVID-19, contributed to significantly lower occupancy at U.S. skilled nursing facilities in April 2020, according to just-released data from the National Investment Center for Seniors Housing & Care (NIC). Occupancy fell to 78.9 percent in April, compared to 84.7 percent just two months earlier and 84.4 percent one year ago.

Skilled nursing facilities are inpatient healthcare locations for those who need nursing, rehabilitation, or related services, but do not require hospitalization. Medicaid has long been a dominant payer for this market.

“Skilled nursing facility occupancy typically slows in April after an uptick during the flu season, but we haven’t seen anything like this in recent memory,” said Bill Kauffman, senior principal at NIC. “The long-term effect of COVID-19 on skilled nursing occupancy remains to be seen as the industry adjusts to a new normal.”

Skilled nursing facilities’ revenue per patient day from Medicaid, which has been greatly challenged by state budget cuts in recent years, rose significantly from March to April, as many states increased reimbursements to help facilities address an increase in patients with COVID-19. Medicaid revenue per patient day increased by $10.53 compared to a year ago, which is a 4.9 percent increase. NIC experts say increased Medicaid payments still may not be enough to cover the cost of care for residents in certain states.

“We’re keeping a close eye on how states are responding to rising unemployment and the increase in residents enrolling in Medicaid,” said Beth Mace, NIC’s chief economist. “Already strapped state Medicaid budgets are going to have to do more with less, and the growth in reimbursements to fight COVID-19 won’t last forever. States must consider how to best serve skilled nursing patients in one of the most challenging times in history.”

NIC experts say Medicare Advantage plan referrals from hospitals to skilled nursing facilities were likely down between March and April due to the federal government’s moratorium on elective procedures. Revenue mix from Medicare Advantage is also down 2 percent from 9.8 to 7.8 percent between March and April.

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CONTACT: Colin Finan, 202-841-5605; CFinan@MessagePartnersPR.com.

About the National Investment Center for Senior Housing & Care
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 for America’s elders by providing data, analytics, and connections that bring together investors and providers. For more information, visit www.nic.org, and follow NIC on Twitter.

 

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