Increased state Medicaid reimbursement is necessary if providers ever hope to improve their financial and operational outlooks, a new analysis by advisory firm Marcum LLP suggests. 

“It is no secret that the face of long-term care will probably never be the same,” wrote Matthew Bavolack, Marcum’s principal and its healthcare services leader. 

“If there is a silver lining to this pandemic, it comes in the form of one word: awareness. Awareness that, for far too long, the largest payor source in the long-term care industry — state reimbursement — has not kept pace with funding for the care needs of our frail and elderly residents.” 

The New York-based firm on Thursday released its third annual nursing home benchmarking study. The 108-page document aims to be a strategic planning guide for providers looking to improve operational and financial performance based on previous nursing home data. It used pre-pandemic data from cost report filings from 2015 through 2019. 

Data revealed that average length of stay overall decreased nationally from 111.30 days in 2018 to 109.98 days in 2019. The national Medicare average length of stay dropped slightly from 32.82 days to 32.42 days during that same time period. 

For Medicaid, the metric decreased 313.04 days to 296.76 in the same period. 

More importantly, an overall national occupancy decline of 0.14% was coupled with a 0.41% decrease in the percentage of Medicare days to total days, and a 2.06% increase in the percentage of Medicaid days to total days between 2018 and 2019. 

“Not only does lower occupancy reduce revenue, but the shift in days from Medicare to Medicaid also represents additional revenue loss, as Medicaid typically reimburses at a lower rate than Medicare,” the report notes. 

Occupancy decreased on average by 2.2% nationally throughout the five-year span. The report notes that, “based upon the 2019 occupancy rate and the 1.7 million available skilled beds, the 2.2% decline represents more than 37,400 additional empty beds.”

Bavolack said states have enacted multiple initiatives to “bolster the industry through increased Medicaid reimbursement.” 

“While we all can agree that we will probably never get from reimbursement what we truly need, it’s nice to see regulators recognize that the industry as a whole is integral to the continuum of care and needs to be properly supported,” he speculated. “Many questions remain as to what that support will look like.” 

The full report can be found here.