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 NIC Report Says Skilled Nursing Occupancy Levels Retreat in 1Q 2018

Occupancy rates for skilled nursing facilities (SNFs) at the end of the first quarter of 2018 decreased to 81.6 percent, with occupancy declining on a year-over-year basis for urban and rural areas, while increasing for urban cluster properties from the prior quarter, according to the National Investment Center for Seniors Housing & Care’s (NIC’s) Skilled Nursing Data Report.

NIC said skilled nursing property occupancy in the first quarter of this year is 30 basis points lower from the prior quarter (the fourth quarter of 2017) and down 210 basis points year-over-year.
“The increase in business from Medicare and managed Medicare during the first quarter suggests that seasonality and the winter flu season may be influencing the data, which we expect to see,” said Bill Kauffman, senior principal at NIC. “What’s surprising is that this failed to drive an overall increase in occupancy.”

The report said the portion of patient days paid for by traditional and managed Medicare grew nationally to 13 percent and 6.6 percent, respectively, while revenue from managed Medicare reached a time-series high nationally in February 2018. This trend was seen even among rural properties, where revenue from managed Medicare is less than half the revenue mix reported in urban areas.  

“Rural areas have been less affected by managed Medicare than others, but the trend warrants attention in the years to come, in all geographic areas,” says Beth Burnham Mace, chief economist for NIC.
Further, the report said revenue from Medicare increased in the first quarter, nearly at the highs recorded one year ago in urban cluster and rural settings. “While the Medicare revenue mix for urban area properties was up quarter-over-quarter, at 23.7 percent, it was far below previous first-quarter highs of approximately 28 percent, last seen in 2015,” NIC said. 

Nationally and consistently across geographic areas, private revenue per patient day (RPPD) continues to increase, with the fastest growth occurring in rural and urban cluster areas. 

“Nationally, private RPPD reached a six-year high of $262 in February 2018 before ending the quarter at $260. Revenue mix for private revenue reached a six-year low at 7.7 percent, as the share of private revenue continues to drop,” the report said.

Nursing Data Report is available at 
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