A NIC report developed to provide timely insights from owners and C-suite operators on the pulse of seniors housing and skilled nursing sectors.

This is the first in a series of findings from NIC’s weekly Executive Survey of operators in seniors housing and skilled nursing. This week’s sample includes responses collected March 24-31, 2020 from owners and C-suite executives of 180 seniors housing and skilled nursing operators from across the nation.

Key Findings

1. Roughly half to two-thirds of organizations reporting on their care segment units—across their respective portfolios of properties—saw no change in occupancy rates from one month prior to the time they responded. The exception was nursing care where about half saw declines.
2. Most organizations also reported no change in the pace of move-outs; 40%-50% reported decelerations in the pace of move-ins.
3. The majority of organizations indicate that their properties are back-filling staffing shortages by increasing overtime hours, and they are supporting property staff by providing flexible work hours.
4. About 40% of organizations expect no change in their development pipeline going forward.

 Survey Demographics

• Slightly more respondents in the sample exclusively operate for-profit properties (49%) than exclusively operate nonprofit properties (45%), and 7% operate both for-profit and nonprofit properties.
• Owner/operators with 1 to 10 properties comprise 63% of the sample. Operators with 11 to 25 properties make up 23% while operators with 26 properties or more make up 14% of the sample.
• Many respondents in the sample report operating combinations of property types. Across their entire portfolios of properties, 73% of the organizations operate seniors housing properties (IL, AL, MC), 42% operate CCRCs (Life Plan Communities), and 25% operate nursing care properties.

Summary of Results

Change in Occupancy by Care Segment

Respondents were asked: “Considering the entire portfolio of properties, overall, my organization’s occupancy rates by care segment are… (Most Recent Occupancy, Occupancy One Month Ago, Percent 0-100)”

• Roughly half to three-quarters of organizations reporting on their care segment units—across their respective portfolios of properties—saw no change or an increase in occupancy rates from the time they responded to one month prior, the beginning of the COVID-19 pandemic. Conversely, anywhere from one-quarter to one-half of organizations reported decreases in occupancy by care segment.

Pace of Move-Ins and Move-Outs

Respondents were asked: “Considering my organization’s entire portfolio of properties, overall, the pace of move-ins and move-outs by care segment in the past 30-days has…”

• Most respondents report that the pace of move-in rates decelerated over the past 30-days. The largest percentage of slowing move-ins was reported for assisted living and independent living (55% and 53%).
• The majority of respondents noted no change in move-outs.
• Nursing care beds had a higher pace of accelerated move-ins and move-outs compared to other care segments.

Mitigation Strategies for Labor Shortages

Respondents were asked: “My organization is back-filling property staffing shortages by utilizing… (Choose all that apply)”

• In response to back-filling staffing shortages, respondents indicated the following:
  • 84% are increasing overtime hours
  • 45% are hiring agency or temp staff
  • 32% are hiring professionals from other industries
  • 10% are using volunteers

Supporting Property Staff

Respondents were asked: “My organization is supporting property staff who may be experiencing challenges by providing… (Choose all that apply)”

• To support property staff who may be experiencing challenges, answers with the highest number of responses included the following:
  • 76% are providing flexible work hours
  • 63% are providing remote work
  • 47% are offering additional paid sick leave
  • 33% are providing to-go meals for families
  • 22% are reimbursing childcare
  • 11% are providing on-site childcare
• Answers with lower response rates included increased wages and retention bonuses, hazard pay and additional shift fulfillment, staff meals, more flexible use of PTO, and providing basic home essential supplies.

Development Pipeline Considerations

Respondents were asked: “My organization’s projected development pipeline going forward is expected to… (Choose all that apply)”

• When asked to describe expectations about their organization’s development pipeline going forward:
  • 41% expected no change
  • 25% expected it to decrease
  • 18% expected it to increase
• Uncertainty is the main reason for expected decrease in the development pipeline (88%). Nearly one out of five (18%) cite supply chain disruptions, and 3% cite lack of construction labor. Other reasons include COVID-19, capital markets/debt availability, conserving cash, economic stress during the pandemic, and concerns about consumer buying strength.
• For those who expected their organization’s development pipeline to increase, some cite lower interest rates as a reason (25%). Others anticipate greater future demand or already have development planning underway.

If you’d like to participate in the current Executive Survey, please click here for the online questionnaire.

NIC released its fourth quarter 2019 Skilled Nursing Data Report, which includes key monthly data points from January 2012 through December 2019.

Here are some key takeaways from the report:

1. The occupancy rate for skilled nursing continued to stabilize as the year closed out in 2019. Occupancy was essentially flat from the third to the fourth quarter, decreasing by only 4 basis points and ending the fourth quarter at 83.8%. This was an increase of 24 basis points from December 2018, when occupancy was 83.6%. Notably, the occupancy rate is up 48 basis points from the time-series low set in June 2018. The fourth quarter occupancy trend varied by geographic area, with urban areas experiencing a slight decrease of 3 basis points, while rural areas decreased 26 basis points and urban cluster areas increased 4 basis points from the third to fourth quarters of 2019. The occupancy rate ended 2019 at 82.2% in rural areas and 85.0% in urban areas, representing a difference of 283 basis points. That difference was larger one year ago in the fourth quarter 2018, when it was 297 basis points. 
   
2. Skilled mix increased 41 basis points to 25.0% in the fourth quarter of 2019 from the prior quarter. This increase from the third to the fourth quarter is not unexpected as historical data has shown skilled mix to hold relatively steady this time of year, even though there has been continued pressure on skilled mix since 2015. Skilled mix declined, albeit slightly, from December 2018 (25.1%), but the fact that there was only a decrease of 5 basis points is somewhat of a positive given the prior yearly comparison showed a decline of 48 basis points. The 40-basis point increase to 6.6% in managed Medicare patient day mix from the prior year suggests managed Medicare is preventing a larger year-over-year decline in skilled mix, since Medicare patient day mix continued its overall downward trend by decreasing 82 basis points from the prior year to 11.3%. The skilled mix trend varied by geography as it decreased in rural areas from the prior quarter and the prior year. Urban areas, however, were flat from the prior year but up compared to the third quarter of 2019.
3. Medicare revenue per patient day (RPPD) increased in the fourth quarter of 2019 by 4.6%, ending the year at $544. This was expected for many operators given the new Patient Driven Payment Model (PDPM) that began October 1, 2019 because the new payment reimbursement model is structured for the total care of patients, therefore potential for more reimbursement, instead of a therapy-driven payment model. It is important to keep in mind that this increase was seen in the first quarter that PDPM became effective and it remains to be seen if this is a one-time adjustment or the beginning of a trend. We will have to wait to see how the operating expense part of the equation evolves before making general conclusions. Medicare RPPD also increased from the prior year, with the 3% increase mostly driven by the fourth quarter 2019 new payment model. The increase was consistent across geographies, as both rural and urban areas saw quarterly and yearly increases in RPPD. Meanwhile, managed Medicare RPPD showed some stabilization from the third to the fourth quarter of 2019 and increased 0.9% to end the year at $441.
   
4. Medicare revenue mix increased 74 basis points from the third quarter of 2019 to end the year at 21.5%. It also increased from the prior year, suggesting the increase in Medicare RPPD from PDPM played a role as Medicare patient day mix decreased from the prior year. However, Medicare revenue mix is down 504 basis points from January 2012, with competition from other care settings, growth in managed care, and length of stay pressure challenging the Medicare fee-for-service business. Meanwhile, Medicaid ended 2019 with over 50% of revenue mix as managed Medicare revenue mix decreased 95 basis points to end the year at 9.9%

   To get more trends from the latest data you can download the NIC Skilled Nursing Data 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 nic.org/skillednursing. NIC maintains strict confidentiality of all data it receives.

The Department of Labor reported that 6,648,000 Americans filed for unemployment insurance benefits in the week ending March 28, 2020 as the COVID-19 pandemic continues to shut down many businesses and much of the economy.  This was an increase of 3,341,000 from the previous week’s upwardly revised level of 3,307,000.  While last week’s report shattered records, this week’s report was even more shocking due to the magnitude of the increase.  The speed and scale of the job losses is unprecedented.  In the past two weeks, 6.5% of employed people or nearly 10 million people have filed claims according to Bloomberg analysis.  It was the highest level of initial claims in the history of the series.  At its worse during the Great Recession, there were 665,000 first-time claims filed in the week ended March 28, 2009.  That was second only to the week ended October 2, 1982, when 695,000 first-time claims were filed. 

Continuing claims for regular benefits, which are reported with an extra week’s lag, rose 1,245,000 to 3,029,000. 

The largest increases in initial claims for the week ending March 21 were in Pennsylvania, Ohio, Massachusetts, Texas and California. Many states reported increased layoffs in service-related industries broadly and in the accommodation and food services industries specifically, as well as in health care and social assistance, and the travel and transportation industries.

The increase in unemployment claims is a preview of the March unemployment rate to be announced by the BLS tomorrow, on April 3^rd.  Most analysts expect it to rise from its February 2020 50-year low of 3.5%, but the larger impact will likely show up in the figures in the April employment situation report due to the timing of the surveys. The majority of the reported layoffs occurred after the Labor Department’s reference week in the March report.   In response to the expected sharp slowdown in the economy, the President signed into law a $2 trillion economic stimulus rescue package that broadly expands unemployment benefits. 

The Centers for Medicare and Medicaid Services (CMS) have taken numerous actions in response to the coronavirus pandemic. Importantly, some are actions to assist with continued access to care and many to ensure the safety of residents and staff. Initial responses included restricting visitors to skilled nursing facilities and changing the rules for covered facility stays. Patients who remain in the hospital fewer than three days may now receive Medicare-reimbursed skilled nursing care. The following are the summaries and links to CMS for further details. 

CMS Approves 12 Additional State Medicaid Waivers to Give States Flexibility to Address the Coronavirus Disease 2019 (COVID-19)

CMS approved an additional 10 state Medicaid waiver requests, bringing the total number of approved waivers for states to 23. The waivers offer states new flexibilities to focus their resources on combatting the outbreak and providing the best possible care to Medicaid beneficiaries in their states.

In addition, CMS also approved one additional Appendix K Amendments request to existing Home and Community Based Services (HCBS) Waivers under Section 1915 (c) of the Social Security Act (Act), bringing the total to 3 approved waivers to date. Appendix K is a tool states may use to temporarily modify approved HCBS Waivers during emergency situations.

https://www.medicaid.gov/state-resource-center/disaster-response-toolkit/federal-disaster-resources/index.html  

https://www.medicaid.gov/state-resource-center/disaster-response-toolkit/hcbs/appendix-k/index.html

New Guidance Regarding Enhanced Medicaid Funding for States – Federal Medical Assistance Percentage (FMAP)

CMS has released new guidance under the Families First Coronavirus Response Act that provides states with more federal Medicaid funding during the COVID-19 pandemic. This includes a 6.2 percentage point FMAP increase which all states are eligible for provided they meet certain requirements. This is effective beginning January 1, 2020 and extending through the last day of the quarter in which the public health emergency declared by the Secretary of Health and Human Services for COVID-19 ends.

https://www.medicaid.gov/state-resource-center/downloads/covid-19-section-6008-faqs.pdf

CMS is Prioritizing and Suspending Certain Surveys

CMS is prioritizing surveys by authorizing modification of timetables and deadlines for the performance of certain required activities, delaying revisit surveys, and generally exercising enforcement discretion for three weeks. During the three week time period, only the following surveys will be prioritized and conducted:

1. Complaint/facility-reported incident survey
2. Targeted Infection Control Survey
3. Self-assessments

https://www.cms.gov/files/document/qso-20-20-allpdf.pdf

CMS is Expanding Telehealth Benefits

CMS is expanding Medicare’s telehealth benefits under the Coronavirus Preparedness and Response Supplemental Appropriations Act. Beneficiaries will be able to receive telehealth services in any healthcare facility including a physician’s office, hospital, nursing home or rural health clinic, as well as from their homes. Considering the safety of residents and the need to continue physician care within nursing homes, telehealth will enable care to still take place in addition to mitigating COVID-19 infection.

https://www.cms.gov/newsroom/press-releases/president-trump-expands-telehealth-benefits-medicare-beneficiaries-during-covid-19-outbreak

Coronavirus Stimulus Bill Includes $200M for Nursing Home Infection-Control Efforts

Given the fact that CMS has made infection control a priority for nursing and current surveys of nursing homes, this bill will put additional support behind the current efforts of CMS to help ensure the safety of nursing home residents and staff. In addition, this is targeted to help the states’ efforts to prevent the spread of the virus.

https://www.appropriations.senate.gov/imo/media/doc/Coronavirus%20Supplemental%20Appropriations%20Summary_FINAL.pdf

The Department of Labor reported that 3,283,000 Americans filed for unemployment insurance benefits in the week ending March 21, 2020 as the COVID-19 pandemic shut down much of the economy.  The weekly report is among the first economic indicators to show the effects of the virus on the economy.   This was an increase of 3,001,000 from the previous week’s level of 282,000.  This shattered records and was the highest level of initial claims in the history of the series.  At its worse during the Great Recession, there were 665,000 first-time claims filed in the week ended March 28, 2009.  That was second only to the week ended October 2, 1982, when 695,000 first-time claims were filed.  This report compares poorly with the average 225,000 claims filed by people during each week during the past six months. 

The total number of people claiming benefits in all programs for the week ending March 7 was 2,006,363, a slight decrease from the previous week. There were 2,039,322 persons claiming benefits in all programs in the comparable week in 2019. 

The largest increases in initial claims for the week ending March 14 were in California, Washington, Nevada, Pennsylvania and Massachusetts.

The sharp increase in claims is attributable to impacts form the COVID-19 virus.  Many states reported increased layoffs in service-related industries broadly and in the accommodation and food services industries specifically, as well as in health care and social assistance, and the travel and transportation industries. States that depend heavily on tourism, were especially hard hit.

The increase in unemployment claims is a preview of the March unemployment rate to be announced by the BLS on April 3^rd.  Most analysts expect it to rise sharply from its February 2020 50-year low of 3.5%.  In response to the expected sharp slowdown in the economy, the Senate approved a $2 trillion economic stimulus rescue package that broadly expands unemployment benefits.  The deal will go to the House for a vote on Friday, March 27th.