Businessman checking stock market data
(Credit: Witthaya Prasongsin / Getty Images)
Businessman checking stock market data
(Credit: Witthaya Prasongsin / Getty Images)

After four months of increases, skilled nursing occupancy declined slightly in June, according to the latest Skilled Nursing Monthly Report from the National Investment Center for Seniors Housing & Care.

Occupancy decreased nine basis points from the previous month to 77.3%. The good news, according to NIC, is that occupancy has risen 522 basis points (5.2%) since the low point of 72.1% reached in January 2021. Even so, occupancy is down 9 percentage points from the pre-pandemic February 2020 level of 86.2%.

“As staffing and inflation pressures persist, operations for many operators will be under pressure but the long-term demand for skilled nursing services is expected to grow over time,” NIC Senior Principal Bill Kauffman wrote in a blog post

Managed Medicare revenue per patient day increased in June but is down 1.4% from the same time last year.

“The continued decline in managed Medicare revenue per patient day poses a challenge to skilled nursing operators as the reimbursement differential between Medicare fee-for-service and managed Medicare has accelerated during the pandemic,” Kauffman wrote.

Medicare fee-for-service RPPD ended June at $581, and managed Medicare ended at $458. This represents a $123 differential. According to Kauffman, the differential was $98 in the month before the pandemic hit in 2020.

“As managed Medicare continues to grow, operators and investors should pay attention to this trend and adjust accordingly,” Kauffman wrote.

Medicare revenue mix and RPPD increased for the second month in a row. Kauffman opined that this was a result of an increase in COVID-19 cases since April, creating additional need for facilities to use the three-day rule waiver and per day reimbursement for COVD-19-positive patients.

Medicare revenue mix ended June at 21.9%; Medicare revenue mix peaked at 24.8% in February 2022. Medicare RPPD is down 2% from its pandemic peak of $593 in June 2020. Managed Medicare revenue mix was down 17 basis points to 10.5% in June. This is significantly above the pandemic low of 8.1% set in May 2020.

Medicaid patient day mix had increased for two months in a row, but it decreased 72 basis points ending June at 65.4%. This is still 250 basis points higher than the pandemic low of 62.9% set in February 2022. Medicaid revenue mix declined 134 basis points from the prior month, ending June at 49.6%.