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 Skilled Nursing Occupancy Takes Major Hit from COVID-19 Restrictions

In a new report on occupancy levels in skilled nursing facilities (SNFs), the National Investment Center for Seniors Housing & Care (NIC) said restrictions on elective surgeries and state-by-state efforts to curb the spread of COVID-19 resulted in a 78.9 percent occupancy level in April, compared to 84.7 percent just two months earlier and 84.4 percent one year ago.

“Skilled nursing facility occupancy typically slows in April after an uptick during the flu season, but we haven’t seen anything like this in recent memory,” said Bill Kauffman, senior principal at NIC. “The long-term effect of COVID-19 on skilled nursing occupancy remains to be seen as the industry adjusts to a new normal.”

In another highlight of the report, NIC said SNFs’ revenue per patient day from Medicaid, which has been greatly challenged by state budget cuts in recent years, rose significantly from March to April, as many states increased reimbursement to help facilities address an increase in patients with COVID-19.

Medicaid revenue per patient day increased by $10.53 compared to a year ago, which is a 4.9 percent increase. NIC experts said increased Medicaid payments still may not be enough to cover the cost of care for residents in certain states.

“We’re keeping a close eye on how states are responding to rising unemployment and the increase in residents enrolling in Medicaid,” said Beth Mace, NIC’s chief economist. “Already strapped state Medicaid budgets are going to have to do more with less, and the growth in reimbursement to fight COVID-19 won’t last forever. States must consider how to best serve skilled nursing patients in one of the most challenging times in history.”

NIC said Medicare Advantage (MA) plan referrals from hospitals to SNFs were likely down between March and April because of the federal government’s moratorium on elective procedures. Revenue mix from MA is also down 2 percent, from 9.8 to 7.8 percent between March and April.

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