Skilled Nursing Occupancy Declines: NIC|MAP

Occupancy hit new lows, slipping 13.8 percent below pre-COVID levels, according to the latest report.
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Skilled nursing property occupancy decreased in the first month of this year to a new low of 71.2 percent. That level stood 13.8 percentage points below pre-COVID levels of 85 percent in February 2020. The fresh lows were also 46 basis points below the 71.7 registered in December. However, vaccination clinics in most skilled nursing properties, as well as recent relaxation of some CMS visitation protocols, may deliver stability in occupancy in the coming weeks. These are among key findings of the Skilled Nursing Monthly Report from the National Investment Center for Seniors Housing & Care (NIC) and MAP Data Service, drawing on data through January 2021.

Several pandemic-fueled challenges accounted for the reduction. They included the properties’ vulnerable populations, a substantial drop in hospital referrals, and local and state-level regulatory restrictions. Both urban and rural occupancy levels declined.

Medicare revenue per patient day (RPPD) fell from December to January, when it stood at $552 at month’s end. However, it has risen since March 2020, when RPPD stood at $549. The federal government has provided support for Medicare fee-for-service reimbursement, such as higher rates to help care for patients requiring isolation due to COVID-19 positive status. That support has become less relevant due to the vaccine rollout delivering sharply declining case counts at skilled nursing properties.

Medicare RPPD is up 0.34 percent vis-à-vis one year ago. Medicare revenue mix continued to grow to its highest level since March 2018, increasing 61 basis points from December to January and ending at 24.1 percent. Medicare revenue mix has increased 247 basis points since March 2020. That compares favorably to managed Medicare’s drop of 16 basis points and private’s decline of 255 basis points over the same period.

Managed Medicare RRPD dropped to a new low of $458 in January, down 2.1 percent since January 2020. It was fallen 16 percent since January 2012.  Managed Medicare patient day mix grew from December, rising 81 basis points to 7.7 percent in January, off a pandemic low of 5.4 percent in May. It was higher by 82 basis points compared with year-earlier levels. Increases both since last May and in January of this year suggests managed Medicare is accounting for a growing role in overall operations. However, this is against the backdrop of a substantial occupancy decline. Managed Medicare admissions likely are substantially below pre-pandemic levels.

Medicaid revenue per patient day inched slightly higher to end January at $238. That represents a 3.5 percent increase since the start of the pandemic in March 2020. It is also higher by 4.2 percent versus year-ago numbers, reflecting many states’ efforts to hike reimbursement related to numbers of COVID-19 cases. Covering the cost of Medicaid care remains a prime concern, due to the fact that in many states, reimbursement does not cover basic cost of patient care and services.

Last week, CBRE added to its Senior Housing Capital Markets team an EVP with experience in the skilled nursing sector.