New NIC Report Shows Managed Medicare Rates Decrease, but Patients Increase

by Jeff Shaw

ANNAPOLIS, Md. — The National Investment Center for Seniors Housing & Care (NIC) has released the first edition of a new report, which tracks the impact of Medicare Advantage plans on the skilled nursing sector.

The report, with data through December 2015, is the first to break out managed Medicare census and rates. It provides aggregate data at the national level from a sampling of skilled nursing operators with multiple properties in the United States. NIC plans to grow its base of participating operators to provide data at localized levels in the future.

“This report is NIC’s initial step to give investors greater transparency into the skilled nursing sector,” says Robert Kramer, NIC’s CEO. “This report provides data on a few key metrics that is only 60- to 90-days old. The current government data, which is typically at least 12- to 18-months old, does not suffice to understand a sector that is going through such rapid change.”

The first report uses data collected from October 2011 through December 2015. Key findings include:

  • Occupancy decreased by 180 basis points during the period. NIC suggested the trend was due to increased turnover resulting from a decline in average length of stay, especially for short-stay residents.
  • Managed Medicare patients increased 1.3 percent within the patient day mix, which suggests an increase in Medicare Advantage plan enrollees.
  • Managed Medicare rates decreased by 10.1 percent as managed care companies have increased enrollments, giving them greater pricing power to negotiate with providers. The cumulative annual growth rate over the period fell by 2.5 percent. The pace of decline has picked up in the last year with the increased number of Medicare plans and enrollees.
  • Medicare rates oscillated, which NIC credits to case mix volatility as the rate hovered around $500 per day.
  • Medicaid rates per patient day increased by 5.5 percent over the period, which is a 1.26 percent cumulative annual growth rate.

“With [Centers for Medicare & Medicaid Services] data showing the significant increase in the number of enrollees in Medicare plans, our data demonstrates how these rising enrollments are translating into greater ability by plans to negotiate lower rates with providers,” says Bill Kauffman, NIC’s senior principal of research and analytics.

The NIC Skilled Nursing Data Report will be released quarterly moving forward. Select metrics include: occupancy, quality mix, skilled mix, patient day mix, and revenue per patient day by payor source. Click here to download the report.

Based in Annapolis, NIC is a 501(c)(3) organization seeking to advance the quality and availability of seniors housing through research, education and increased transparency.

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