Occupancy rates may have stabilized, but skilled nursing providers’ dependence on low-paying Medicaid funding grew during the third quarter, according to figures released Wednesday by the National Investment Center for Seniors Housing & Care.

More than two-thirds (67.6%) of skilled nursing facility resident days were reimbursed by Medicaid — a rise of 0.6% — over the second quarter. It represents a high mark since NIC began reporting such data seven years ago.

The group’s 2019 Skilled Nursing Data Report was released Wednesday and revealed that both rural and urban care centers are experiencing Medicaid’s growing influence. There were 28 operators contributing data for the period ending September  30. They represented 48 states and just under 10% of nursing homes (1,516) in the U.S.

Labor pressures once again showed themselves as a thorn in operators’ side, NIC said. Although Medicaid revenue per patient day hit a time-series high of $214 in September (2.4% year-over-year growth), it “still trails nursing home wage growth by a wide margin,” report authors noted.

Findings could be a predictor of “profound” change in the future, NIC chief economist Beth Mace said.

“Medicaid is continuing to apply pressure to state budgets, because reimbursement rates are not keeping up with rising labor and other operating costs,” Mace said. “This is not just a rural state issue. Continued growth in Medicaid may also be contributing to financial and budgetary pressures for bigger states like New York and Massachusetts.”

Medicaid revenue mix climbed to 51.5% in the third quarter, an all-time high since NIC started tracking these stats in 2012. That figure is up 55 basis points over the previous quarter and 25 basis points year-over-year. 

“Medicaid has been the bulk of nursing home census for some time now, but the daily reimbursement rates are often not even enough to cover operator cost,” acknowledged Jennifer Leatherbarrow, manager of Clinical Consulting Services for Richter LTPAC Performance Advisors.

“This will make it increasingly difficult for facilities to even break even If the Medicare A census continues to dwindle,” she added. “This could lead to more facility closures and, ultimately,displaced residents.”

Fee-for-service Medicare, which pays providers at the highest rate, hit an all-time low of 10.9% of patient days in the third quarter, as average length of stay continued to creep lower, according to NIC.

Meanwhile, SNF occupancy remained relatively stable at 83.6% percent, a 0.1% slide from the second quarter and a 0.2% increase from a year ago. Occupancy rose for rural providers while their urban counterparts saw stable numbers.

NIC senior principal Bill Kauffman said it was too early to know if the trend would continue into the fourth quarter.