Skilled Nursing Occupancy Increased in March for Second Straight Month, But Remains Low

Occupancy

Skilled nursing property occupancy increased for a second month in a row, increasing 49 basis points from February to end March at 71.6%. It is up 89 basis points from the low set in January. The expectation was occupancy would increase given the decline in COVID-19 cases across the country, but the question remains of how fast it will recover. Although occupancy seems to have stabilized, it remains very low compared to pre-pandemic levels. It is 13.2 percentage points below the February 2020 occupancy when it was 84.8%. There is still cautious optimism, but the next few months of data will be critical in order to verify if the recovery in occupancy continues.

Medicare

Medicare patient day mix dropped 127 basis points from February to end March at 12.2%. It has decreased three months in a row and is now down 309 basis points from the recent high set in December 2020. In addition, Medicare revenue mix declined as well, falling 201 basis points from February, and ending March at 21.4%. This suggests the utilization of the 3-Day Rule Waiver is declining which makes sense as COVID-19 cases declined significantly since January. The 3-Day Rule Waiver was implemented by Centers for Medicare and Medicaid Services (CMS) to eliminate the need to transfer positive COVID-19 patients back to the hospital to qualify for a Medicare paid skilled nursing stay.

Managed Medicare

Managed Medicare patient day mix was relatively flat from the prior month, ending March at 7.8%. However, it is up 245 basis points from the pandemic low set in May of 2020 when many states restricted elective surgeries and some skilled nursing operators were unable to admit patients. In addition, managed Medicare revenue mix ended March at 11.0% and is up 183 basis points from the end of 2020 and up 266 basis points from its low also set in May of 2020. The slight increase in occupancy and managed Medicare patient day mix of late is welcomed news but the question remains of if, and when, patient admissions will get back to pre-pandemic levels.

Medicaid

Medicaid revenue mix continued to increase as it ended the month of March at 49.3%. It continues to inch back to a more historical normal level. The pre-pandemic level in February 2020 was 55.0%. It is up 228 basis points from the pandemic low of 47.0% set in December 2020. In addition to lower overall admissions, the waiver of the 3-Day Rule also likely played a role during the pandemic in regard to lower Medicaid revenue mix as COVID-19 positive patients converted to Medicare from Medicaid.

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

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