NIC: Skilled Nursing Occupancy Rises Year-Over-Year for First Time in Four Years

ANNAPOLIS, Md. — Occupancy in U.S. skilled nursing facilities reached 83.7 percent in the first quarter of 2019, representing the first year-over-year increase since January 2015.

The data come from the National Investment Center for Seniors Housing & Care (NIC), an Annapolis-based, nonprofit data firm serving the seniors housing industry. Data was gathered from approximately 1,400 skilled nursing facilities in 46 states. NIC’s first quarter 2019 Skilled Nursing Data Report showed increased occupancy in both rural and urban areas.

“The continued upward trend in skilled nursing occupancy this quarter suggests we are seeing more than flu season and other seasonal factors driving the increase,” says Bill Kauffman, senior principal at NIC. “Occupancy was also up between March 2018 and 2019, suggesting supply and demand are becoming more closely aligned. NIC will continue to monitor reimbursement, labor costs and other data to see if any of these factors might be contributing to facility closures, especially in some rural areas.”

NIC reports that skilled nursing revenue is increasingly coming from Medicare Advantage (MA) health insurance plans offered by private companies approved by Medicare. NIC data show MA plans now represent 14 percent of total skilled nursing revenue in urban areas and 5.4 percent in rural areas.

In addition, Medicaid patients account for most of the patient population in skilled nursing facilities, NIC experts say, even though Medicaid reimbursement in many states has not kept up with the cost of care. This, among other factors, is contributing to the recent spate of facility closures.

“Skilled nursing is increasingly reliant on Medicare Advantage and Medicaid for revenue, which is challenging many facilities’ financial wellbeing,” says Beth Mace, NIC’s chief economist. “Reimbursement rate pressures, competition from other care settings, and high personnel costs are also impacting the sector.”

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