Medicaid revenue per patient day (RPPD) for skilled nursing facilities is at an all-time high.
That’s according to the latest data from NIC MAP Vision, which released its new skilled nursing monthly report on March 30.
Despite this new benchmark being reached, Medicaid rates still often are not high enough to cover the cost of care for Medicaid residents — a troubling factor that will continue to exert pressure on operators, NIC Senior Principal Bill Kauffman noted in a blog post on the latest data.
Medicaid RPPD increased by 2.79% year-over-year in January 2023 to reach peak levels at $269, the market research firm noted. Compared to a month ago, Medicaid RPPD increased by 0.49%.
Monthly Medicaid revenue mix for nursing homes, however, remained unchanged in January, although from a year ago it increased by 0.91% to end at 48.8%.
“[C]overing the cost of care for Medicaid patients is still a major concern as reimbursement does not cover the cost of care in many states. In addition, nursing home wage growth is elevated along with overall inflation and staffing shortages are a significant challenge in many areas of the country,” the NIC report stated.
As operators grapple with staffing, wage growth and inflation challenges, the long-term demand for skilled nursing services is expected to grow over time, the analysts said.
And, Medicaid reimbursement has increased more than usual – rising 6.3% overall since February 2020 – with many states embracing measures to increase reimbursement related to the number of Covid-19 cases throughout the pandemic, the NIC analysis noted.
Skilled nursing occupancy levels rose slightly to 81% to end January, a jump of 0.49% from December, and an increase of 2.74% from a year ago. Compared to the low reached in January 2021, the current level is up by 6.43%.
“The staffing crisis in the sector is still a significant burden on skilled nursing operators, especially as the acuity level of patients has increased along with the demand for nurses,” the analysts noted.
Meanwhile, Medicare RPPD decreased slightly by $2 from December, ending at $592 in January.
Also, managed Medicare revenue mix increased 0.85% from December to end January at 11.2%. These levels are up 2.54% from the pandemic low in May 2020 of 8.7% at a time when elective surgeries were suspended and referrals to SNFs were down, the NIC report noted.
And while managed Medicare RPPD increased slightly in January 2023 to $468 from $467 a month earlier, it fell 1.3% from the level of $474 a year ago.
“The persistent decline in managed Medicare revenue per patient day continues to result in an expanded reimbursement differential between Medicare fee-for-service and managed Medicare,” the report noted.
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