Managed Medicare RPPD hit a new low.

NIC MAP® Data Service, powered by NIC MAP Vision, released its latest Skilled Nursing Monthly Report on April 1, 2021, which includes key monthly data points from January 2012 through January 2021. Here are some key takeaways from the report.

Occupancy continued to be challenged as the industry navigated the first month of 2021. Skilled nursing property occupancy fell to a new low of 71.2%, placing it 46 basis points below December 2020 (71.7%), 13.8 percentage points below pre-pandemic levels of February 2020 (85.0%), and 13.7 percentage points below year-earlier levels. The COVID-19 pandemic has significantly impacted census at skilled nursing properties due to many challenges including the vulnerable population living in the properties, local and state level regulatory restrictions, and a significant decrease in hospital referrals. The occupancy trend was consistent across geographies as both urban and rural occupancy rates declined from December (47 basis points to 72.2% in urban areas and 29 basis points to a record low of 69.4% in rural areas). While rural and urban areas continue to face very low occupancy levels, vaccination clinics in most skilled nursing properties and the recent relaxation of some CMS visitation guidelines may support some stability in occupancy in the coming months.

Medicare revenue per patient day (RPPD) declined from December 2020 to January 2021 ending the first month of the new year at $552. However, it is up since March 2020 when the RPPD was $549. There has been federal government support for Medicare fee-for-service reimbursement such as higher rates to help care for COVID-19 positive patients requiring isolation. However, that has been becoming less relevant as case counts have declined sharply at skilled nursing properties since the vaccine rollout in December. Medicare RPPD increased 0.3% compared to a year ago. Meanwhile, Medicare revenue mix continued to increase reaching its highest level since March of 2018. It increased 61 basis points from December to January, ending at 24.1%. Medicare revenue mix has held up relatively well since the pandemic began in March 2020, compared with other payor types. It is up 247 basis points since March compared to managed Medicare (down 16 basis points to 10.3%) and private (down 255 basis points to 5.8%).

Managed Medicare RPPD hit a new low of $458 in January. Early in the pandemic managed Medicare RPPD increased from March to May 2020 but has since resumed the trend of monthly declines. It is down 2.1% since January 2020 and has declined 16% since January 2012. Managed Medicare patient day mix increased from December, up 81 basis points and stood at 7.7% in January after hitting a low during the pandemic of 5.4% in May. In addition, it was up 82 basis points from year-earlier levels. The increase since May of 2020, and the increase in the first month of 2021, suggests managed Medicare is playing an increasing role in overall operations but this is all in the context of a significant decline in occupancy. Managed Medicare admissions likely continue to be significantly below levels prior to the start of the pandemic.

Medicaid revenue per patient day increased slightly from December ending January 2021 at $238. However, that represents a 3.5% increase since March 2020 when the pandemic started, and it is up 4.2% from one year ago as many states embraced measures to increase reimbursement related to the number of COVID-19 cases. However, covering the cost of care for Medicaid patients is still a major concern as reimbursement does not cover the basic cost of patient care and services in many states. In addition, nursing home wage growth is elevated relative to inflation and staffing shortages are a significant challenge in many areas of the country. Expectations are that wage growth will remain elevated as staffing challenges remain an operational hurdle due to turnover and competition for labor in other industries.

To get more trends from the latest data you can download the Skilled Nursing Monthly Report here. 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 continues to grow its database 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 https://www.nic.org/skilled-nursing-data-initiative. NIC maintains strict confidentiality of all data it receives.

The first Friday of the month at 8:30 ET is widely anticipated as the Labor Department presents a fresh gauge of the most recent economic performance in its release of the labor report for the prior month. Today’s number was even more closely watched since it indicates how quickly the economy is bouncing back from the year-long pandemic. In its release, the Labor Department reported that nonfarm payrolls rose by 916,000 in March and that the unemployment rate edged lower to 6.0% from 6.2% in February. The jobless rate remains 2.5 percentage points above the pre-pandemic level of 3.5% seen in February 2020, but well below the 14.7% peak seen in April. Despite the February increase, job levels are 8.4 million (5.5%) below the pre-pandemic levels of February 2020. The consensus estimates for February had been for a gain of 660,000.

Private service-producing jobs increased by 780,000, led by a rise of 280,000 jobs in leisure and hospitality payrolls as pandemic-related restrictions began to be relaxed and restaurants re-openings occurred. The resumption of in-person learning translated into a combined 190,000 increase in state, local government, and private education employment. Health care added 11,500 jobs in March. Within healthcare, nursing care facilities gained 1,700 jobs in March.

The number of long-term unemployed (those jobless for 27 weeks or more) was little changed from February at 4.2 million but is 3.1 million higher than year-earlier levels, suggesting that this continues to be a very challenging time for many Americans. Long-term unemployed persons account for 43.4% of the total number of unemployed persons.

The underemployment rate or the U-6 jobless rate was 10.7% versus 11.1% in February. This figure includes those who have quit looking for a job because they are discouraged about their prospects and people working part-time but desiring a full work week.

Average hourly earnings for all employees on private nonfarm payrolls fell by $0.04 in March to $29.96, a gain of 4.2% from a year earlier. This was down from an annual gain of 5.2% in February.

The labor force participation rate, which is a measure of the share of working age people who are employed or looking for work was steady at 61.5% in March, up from 61.4% in February.

The change in total nonfarm payroll employment for January was revised up by 67,000 from a 166,000 to 233,000 and the change for February was revised up by 89,000 from 379,000 to 468,000. Combined, 156,000 jobs were added to the original estimates. Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.

The March data is promising and reflects a re-opening of the economy. The ongoing drop in COVID cases, the widespread distribution of vaccines, and a shift in consumer confidence will allow for a more complete re-opening of the economy and a fuller recovery in jobs in the coming months. The next round of fiscal stimulus will provide a further boost to economic activity and allow the second half of 2021 to be very strong.

New cases of COVID-19 in skilled nursing facilities account for just a quarter of 1% of U.S. cases overall, down from over 5% of cases in June 2020. NIC’s new interactive data visualization tool shows a divergence as case counts among the general population rise in some parts of the U.S., while those in skilled nursing facilities continue to decline.

U.S. weekly COVID-19 infections are rising again across several states despite ongoing vaccination efforts. Although we are on the road to herd immunity and case count data in skilled nursing facilities (SNFs) suggest that vaccines are indeed effective, the recent uptick in U.S. cases indicates that it is still important to remain vigilant and continue to be cautious regarding enthusiasm about beating the pandemic. It is too early to let our guards down.

This new interactive tool tracks the incidence of COVID-19 and provides a way to compare weekly infections of COVID-19 in skilled nursing facilities and in the U.S. and across regions, sub regions, and states. Data show

• weekly confirmed cases in SNFs vs. U.S. (sort by region, sub region, or state)
• per-resident rate of new COVID-19 infections within SNFs (all vs. specific region/state)
• weekly confirmed cases among skilled nursing residents as a share of U.S. weekly cases.

The data is displayed in an easy-to-use interactive dashboard that allows sorts down to state level, with data updated weekly. Check back each week to see and compare current data. 

Choose specific regions or states from the dropdowns in the tool below to change the graphs. 

Interactive Tool – Weekly COVID-19 Confirmed Cases | Skilled Nursing Facilities vs. U.S.

While skilled nursing residents make up less than 1% of the U.S. population, the analysis shows that newly confirmed cases among skilled nursing residents have shrunk dramatically. Remarkably, weekly confirmed cases within skilled nursing facilities accounted for only 0.26% of U.S. weekly cases on March 14, down 1.86 percentage points from December 20 (2.12%) and the launch of the long-term care vaccination program. This suggests that the incidence of COVID-19 has shifted to the younger adults. Recent data shows that hospitalized COVID-19 patients are getting younger across several states, including New Jersey, Pennsylvania, and Michigan.

New Cases in Skilled Nursing Facilities Fall Below 1,000

Additionally, newly confirmed cases within skilled nursing facilities continued to decline and fell below 1,000 cases for the week ending March 14 (preliminary data). The per-resident rate of new COVID-19 infections continued to decline and reached a new pandemic low of 0.09% – only 9 in 10,000 residents tested positive for COVID for the week ending March 14, 2021 compared to 303 in 10,000 twelve weeks ago on December 20, 2020.

Regional Differences

Regionally, the lowest rate of new infections among skilled nursing residents was seen in the Midwest at 0.06% – a pandemic low, where case counts are down 98% from 8,756 on December 20 to 150 on March 14. This is followed by the West (0.07% – a pandemic low), the South (0.10% – a pandemic low), and the Northeast (0.15%). Case counts within SNFs in the Northeast are down 94% since December 20 while the Northeast overall weekly cases fell only 53% over the same period. Notably, the share of newly confirmed COVID-19 diagnoses within SNFs in the Northeast decelerated from 2.44% to 0.30% for the reporting weeks from Dec 20 through Mar 14 (down 2.13 percentage points).

The positive effects of the vaccines continue to be notable across the four regions of the U.S., the rate of new COVID-19 cases among skilled nursing residents prior to vaccination rollout moved nearly in tandem with the rate of new cases within their respective regions. In recent weeks, following the vaccine rollout, new cases within SNFs have been sharply lower than the weekly cases in their respective region at any previous point.

Furthermore, SNFs weekly confirmed cases in the Middle Atlantic (New York, New Jersey, and Pennsylvania) are down 94% since the week ending December 20 and continued to diverge from the overall weekly cases within the sub region (down 47%).

State Differences

Drilling deeper into state infection rates, New Jersey weekly cases have accelerated since February 21, while weekly cases within skilled nursing facilities in New Jersey continued to decelerate and remained low. In fact, case counts within SNFs in New Jersey are down 91% from December 20 through March 14 while weekly cases among the general population there are down only 30%. Other states that saw an increase in the last few weeks include Maryland, Maine, and Texas – none of these states reported an increase in cases within their skilled nursing facilities as of March 14.

Vaccinations

As of March 14, over 40 million people in the U.S. have been fully vaccinated. Of this group, 7.6 million are in long-term care communities. The status of clinics shows that over 90% of skilled nursing facilities participating in the Walgreens and CVS vaccination programs have completed their clinics (data as of March 11). The U.S. is currently administering 2.8 million doses per day (as of March 31), and it is likely that the average vaccination rate will reach 3 million in the coming days. However, it is also important to consider vaccine hesitancy and put more efforts to promote vaccine literacy to more fully immunize those who are hesitant.

In summary, weekly COVID-19 cases within skilled nursing facilities continue to decline or flatten with relatively small increases across few states. Data suggest that vaccines are indeed effective, but it is important to keep track of the incidence of COVID-19 in skilled nursing facilities vs. U.S. since most of skilled nursing patients have been vaccinated.

To gain in-depth insights and track the week-over-week change rate for new resident cases and fatalities of COVID-19 within skilled nursing facilities at the state and county levels, visit NIC.org. You can also access the Skilled Nursing COVID-19 Tracker along with a rich trove of analysis and insight on the NIC COVID-19 Resource Center.

NIC is committed to provide timely data, analyses and insights that increase transparency and understanding of the sector, especially in this difficult time of COVID-19. We strongly support all actions and efforts that prioritize distribution of COVID-19 vaccines, testing, and availability of PPE to protect frontline workers and residents.

A lot of attention has been paid to the occupancy challenges that seniors housing operators have faced since the COVID-19 pandemic began in early 2020. This blog focuses on the impact of the pandemic on occupancy by operator size. We conclude that single-property operators generally saw smaller occupancy declines during 2020 than very large operators. New supply, as well as pandemic-related changes in the rates of move-ins and move-outs, contributed to this disparity.

Methodology. NIC Analytics utilized NIC MAP® Data, powered by NIC MAP Vision, for this analysis. We examined occupancy patterns among single-property operators, small-sized operators (2–4 properties), medium-sized operators (5–9 properties), large operators (10–24 properties), and very large operators (25 and more properties).

This analysis uses majority property type. Majority property type is the industry’s traditional categorization where each property is classified by its plurality care segment (referenced as majority) and where memory care is considered a subset of assisted living. Seniors housing is defined as the aggregate of majority independent living and majority assisted living. Properties are categorized by their operator’s size in each quarter. Some properties in this analysis have had a change of operator during 2020, so each operator size group per metropolitan market may not be entirely “same store.”

NIC MAP Primary Markets. While deaths, move-outs, and a slowdown in move-ins contributed to decreases in occupancy, new inventory continued to come online during the pandemic, which put further pressure on occupancy rates. For the NIC MAP Primary Markets, net absorption for 2Q20, 3Q20, and 4Q20 was negative for each quarter, with a staggering -33,500 units having been vacated on a net basis and again available. However, net inventory grew by 13,000 units for the same period. The combination of new inventory growth and negative net absorption put enormous pressure on seniors housing occupancy rates, which fell from 87.5% during 1Q20 to 80.7% during 4Q20 for the NIC MAP Primary Markets. The 6.8 percentage point drop in the occupancy rate may not have been as steep, however, had the number of new and unleased units not increased as much.

Findings. Over the course of the pandemic in 2020, single property operators saw the smallest declines in occupancy of the five operator size groups examined for the NIC MAP Primary Markets. Conversely, very large operators saw the greatest declines in occupancy from 1Q20 to 4Q20. Occupancy dropped 5.8 percentage points for single-property operators and 8.2 percentage points for the very large operators within the Primary Markets.

Between 1Q20 and 4Q20, single-property operators experienced negative inventory growth, while very large operators had the largest inventory growth of the five operator categories for the NIC MAP Primary Markets. The inventory decline for single-property operators could be due to a few factors, including that some properties may have been purchased from single-property owner/operators to become owned and operated by larger chains, or there may have been property closures or closures of units or wings at properties that remained open. The additional units coming online during this period put added pressure on occupancy for very large operators in a way that the single property operators did not experience.

Conclusion. This analysis has shown that generally, the very large operators experienced the greatest drops in occupancy during the pandemic of the five selected operator groups. Some of the explanation for this is the inventory growth that occurred for the largest operators.

Additional explanations for the larger drop in occupancy observed for very large operators include that some larger operators may focus more broadly on REVPOR or revenue per occupied unit and, therefore, managing more to asking and actual rates than occupancy levels. It may also be that properties that were operated by single-property operators in 2020 had more flexibility to allow move-ins based on local coronavirus positivity rates, whereas properties operated by larger chains may have had more uniform, organization-wide policies and procedures in place either controlling or restricting move-ins regardless of the level of coronavirus positivity rate by region or locale.

NIC MAP Vision Clients with a NIC MAP Data subscription can access the full version of this analysis in the latest Insights Newsletter by logging into their Client Portal.

About NIC MAP Vision:

NIC MAP Vision is a leading provider of comprehensive market data for the seniors housing and care sector. NIC MAP Vision brings together two strong, well-respected, and complementary teams and platforms – the market-leading NIC MAP® Data Service (NIC MAP) and VisionLTC’s best-in-class market research analysis platform. For more information, visit www.nicmapvision.com.

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The pandemic has thrust healthcare for seniors into the spotlight. The latest NIC Leadership Huddle event, titled, “Value-Based Care: What’s in It for Me?” explored how operators and their partners are navigating what is likely to become a new normal: bringing healthcare to seniors where they live. The webinar and discussion explored the argument that–with or without COVID-19–every seniors housing organization must understand how providing access to healthcare services is now a part of their value proposition for both residents and investors.

Two operators and a broker shared their approach to providing healthcare and participating in value-based care models. Each vignette was followed by live commentary from Jim Lydiard, vice president, Strive Health, and Amy Kaszak, president of Special Needs Plans, AllyAlign.

Kaszak, pointing to exploding healthcare costs and the expansion of value-based models, said, “As hospitals, therapy, primary care, home health, and skilled providers adapt to new payment models and incentives, senior housing communities–even those who do not bill for Medicare services–will have opportunities to engage in value-based relationships.”

Jonathan R. Cook, president and CEO, LifeSpire of Virginia, an operator of four CCRCs (or life plan communities), with 1,450 residents across the Commonwealth, walked through several key advantages of a recent partnership with AllyAlign. He pointed out that every hospital readmission takes up about five hours of a staff nurse’s time, filling out paperwork as residents are admitted and then returned. The new partnership has significantly decreased readmissions. Cook said, “Being able to take that five hours, over 30% of readmissions, and put those nurses and those team members back on the floor to provide more direct care – huge win for our clinical teams.”

Another advantage for Cook has been the implementation of advanced telehealth tech. Residents, particularly during the COVID-19 pandemic, fear making trips to the doctor, and this innovation allows them to receive the same level of care, while staying safe at home. Cook said, “By having one provider unite the care coordination on our campuses, it’s going to create better outcomes, better care management, and better care transitions for our residents. We believe that’s going to reduce costs, it’s going to reduce heartache, it’s going to reduce the anxiety that those residents and families have as they age and need more care programs and services.”

Kaszak, who is very familiar with the LifeSpire model, summarized, “The primary care team, in partnership with the community team, delivers the value, and the Medicare Advantage plan pays for the value and value-added services. Value-based payments go both to the primary care team and to the community.”

Tim Nelson, executive director, Mountain View Retirement, a senior living community in Tucson, Arizona, has seen significant benefits in a partnership with CareMore Health. “We’ve been able to retain our residents longer, give them a happier, healthier life while they’ve been with us, and we’ve also been able to build even stronger community partnerships, with our skilled nursing facilities, and even with the hospitals and different local physicians’ groups.” His community has seen a decrease in hospital readmissions, dropping from 16 percent down to 6.2 percent.

Nelson said, “We’ve been able to do direct admits from our assisted living and memory care, and sometimes even our independent living, straight to the skilled nursing facility and back to us.” CareMore staff are also always available to help facility staff, even when they’re not onsite. “We can call our providers and their support staff 24 hours a day, seven days a week,” said Nelson. Being able to showcase those abilities has been “a huge asset” when touring prospective new residents and their families.

Shane Connor, vice president-Senior Housing Group, Bull Realty offered an investor’s perspective on the integration of value-based care in senior housing. He sees multiple benefits. On recruitment and occupancy rates, he said, “The prospective resident, and certainly their family are ever-more aware of healthcare now than they have been, with COVID.” He said that being able to show integration of value-based care – or third-party partnerships – is now a competitive differentiator.

Healthcare integration also promises to significantly improve length of stay, which will boost occupancy rates. Connor also sees an advantage on staffing, as onsite or visiting clinical staff reduce burdens on facility staff, particularly with higher acuity residents. That can reduce costs. On valuations, Connor explained, “If you’re evaluating a group that implements value-based care, or is embracing value-based care, you’re going to be more confident that they’re going to keep people healthy and be able to keep those beds full. From a valuation standpoint, if I’ve maybe held this facility for five or six years, and we can show the impact that the value-based integration had, on the occupancy, on the bottom-line financials, then when I go to take that out to market for another prospective buyer, you may be able to command a higher dollar, a higher valuation.”

You can register to attend upcoming NIC Leadership Huddles, including both the live webinars as well as the optional, first come, first served participation in peer-to-peer discussions, within the Events tab on www.nic.org. Registrants are provided with a recording of the event, compliments of NIC, and our generous sponsors and partners.