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 New Report Says 3Q Occupancy Rates Slip for Skilled Nursing

​Skilled nursing facility occupancy declined to 81.6 percent in the third quarter of 2017, a slight decrease from the previous quarter and a sharper fall-off from year-ago levels, according to fresh data released on Dec. 14 by the National Investment Center for Seniors Housing & Care (NIC) in its NIC Skilled Nursing Data Report.

Reading into the numbers, Bill Kaufman, senior principal at NIC, said on a historical basis there has always been some variability in the occupancy trend in the third quarter in any given year, making it difficult to gauge the impact of seasonal factors. “Occupancy did set a new low within this time series in the third quarter as pressure continues on the Medicare mix. However, it did decline at a slower pace from the prior quarter,” he said.

The third-quarter occupancy rate was down 29 basis points from the second quarter of this year and down 167 basis points from the same quarter of 2016.
NIC said third-quarter Medicare patient-day mix declined 58 basis points from the second quarter and 84 basis points from year-earlier levels, registering a new low of 12.2 percent in the third quarter of 2017.
“The average Medicare patient-day mix for the 12-month period ending in September 2017 was 13 percent, compared to 14 percent from September 2015 to September 2016, and 15 percent in the 12-month period from September 2014 to September 2015,” the report said.
At the same time, Medicare patient-day mix fell, Medicaid-patient-day mix continued to comprise a larger share of occupancy, plateauing to its highest point within the past five years at 66.8 percent, according to Beth Burnham Mace, chief economist for NIC.
“Not only is it important to see how the patient mix is changing over time, but we really need to see how the revenue mix is changing in conjunction with patient-days, which is why NIC will be expanding this data set to include revenue mix next year,” she said.
Managed Medicare revenue per patient-day declined from the prior quarter to $431. This number represents a total decline of 13.2 percent from five years ago, or a negative 2.8 percent compounded annual growth rate over the same time frame. Quarter-over-quarter, the rate slipped 1.8 percent, which NIC called a “significant deterioration” from the prior quarterly decline of only 0.2 percent. The rate fell 2.1 percent from the year-earlier level of $440 revenue per patient-day.
Meanwhile, managed Medicare patient-day mix declined to 6.2 percent from its recent five-year high of 6.7 percent in February 2017.  “The average managed Medicare patient mix in the latest 12-month period ending September 2017 was 6.3 percent, compared to 5.9 percent for the previous 12-month period ending September 2016,” the report said. “Managed Medicare patient-day mix appears to be steadily growing, up from 5.1 percent at the beginning of the five-year time series.”
Private-pay business continued to ebb, with the private patient-day mix of 9.1 percent at the same low it matched this past April. NIC said this mix has not exceeded 10 percent since January 2016. But, at the same time, the private revenue per patient-day increased to its highest amount at $266. “Each of the past 10 months has witnessed the highest private revenue per patient-day amounts in five years. The year-over-year increase reached its five-year peak in the third quarter at 2.9 percent,” the report said.
The complete NIC third-quarter skilled nursing occupancy report is available at http://info.nic.org/skilled_data_report_pr.
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