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 Managed Care Among Reasons Cited for SNF Occupancy Slip

Data from the National Investment Center for Seniors Housing & Care (NIC) and its second-quarter 2017 NIC Skilled Nursing Data Report showed occupancy rates decreased to 81.7 percent at the end of the quarter, down 100 basis points from the prior quarter and 147 basis points below year-over-year numbers.

NIC said the growth in managed care in the long term care space, sending patients home without a stop at a skilled nursing facility (SNF), and more complex surgeries performed in an outpatient setting all are contributing to occupancy challenges for SNFs. The issue is most acute for Medicare patient days, according to Bill Kauffman, senior principal at NIC.

“However, recent news from the Centers for Medicare and Medicaid Services (CMS) of the proposal to delay some mandatory bundled payment initiatives could be welcomed news at a time of continued pressure on patient days,” he said.

Industry sources said an overall trend in the seniors housing sector has seen inventory growth dampening occupancy rates in seniors housing centers in some localities. Certain markets have experienced this more than others, including Dallas, Atlanta, Miami, and Chicago among others.

Also contributing to the SNF occupancy decline in the second quarter was the fact that Medicare patient day mix reached its lowest level in the five years NIC has measured such data. The mix rate fell 119 basis points from 13.9 percent in March to 12.7 percent in June.

“Since February of 2015, with the start of pressure on Medicare mix, it is down a significant 378 basis points from 16.5 percent. Year-over-year, it declined 88 basis points from 13.6 percent,” the report said.

Meanwhile, NIC said the Medicaid mix continued to be close to a five-year peak in the second quarter, at 65.9 percent.

“The importance of Medicaid patient days to the current skilled nursing business model is evident by its growing percentage of overall patient day mix,” said Beth Burnham Mace, chief economist for NIC. “Given the fact the aging population is projected to grow significantly in the coming decade, and the likely need for long term care services, this trend warrants attention.”

Medicaid revenue per patient day (RPPD) rate continues to escalate, reaching its highest point over the past five years in the second quarter at $201. For the past 12 months, the rate has hovered between $199 and $201, with the two highest RPPD rates both recorded in the second quarter of 2017.

The decline in managed Medicare revenue per patient day decelerated in the second quarter, but NIC said the daily rate reached its lowest rate since July 2012.  Managed Medicare ended the second quarter at $437 per patient day. The quarter-over-quarter decline was less than $1, or a negative 0.2 percent drop.

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