Closed sign, shuttering

Editors’ Note: This story has been updated.

More than 300 nursing homes have closed during the COVID-19 pandemic and another 400 could go out of business this year, according to a new analysis. 

The findings were released Thursday by the America Health Care Association. The analysis documented more than 1,000 nursing home closures since 2015 — with 776 happening before the pandemic and 327 during the crisis.

The facilities that closed tended to be smaller, with fewer than 100 beds, and in urban settings where residents rely on Medicaid, investigators found. The analysis of historical closures and projection of 400-plus imminent nursing home closures was conducted by AHCA looking at QCOR data.

“With hundreds of nursing home closures looming now and thousands more anticipated if government funding is cut, state and federal policymakers need to step up to support our social safety net,” Mark Parkinson, AHCA’s president and CEO, said in a statement Thursday.

The findings follow the Centers for Medicare & Medicaid Services’ announcement that it plans to decrease pay for skilled nursing facilities by $320 million in fiscal 2023. 

The association also included data from a March CliftonLarsonAllen analysis that focuses anticipated margin and occupancy levels, as well as facilities at financial risk if Medicare has a 5% parity adjustment and Medicaid public health emergency funding goes away. CLA estimates between 33% and 38% of nursing homes would be at financial risk if Medicare is cut by 5%, as recommended by MedPAC, and Medicaid PHE funding ends in 2022.  

The impact of the COVID-19 pandemic is being felt differently across the country, according to Marc Zimmet, CEO of Zimmet Healthcare Services Group. He explained that SNFs have been closing for years in certain states but the difference now is the closures are also hitting traditionally “stable” states.

Zimmet cited New Jersey, where the nursing home bed count has remained consistent for years. But he said there are now “legitimately 25% of SNFs” that will close within 24 to 36 months without relief, according to his research and work with the Health Care Association of New Jersey.

He agreed that there are at least 400 potential closures “if no action is taken” in regard to reimbursement.  

“The Medicare cut is important for broader reasons, but the reality is rates will go down only about $6 PPD on average,” Zimmet told McKnight’s Long-Term Care News on Thursday. “That said, it has ripple effects on Medicare Advantage payments — plans will attempt to use the recalibration to reduce their rates or refuse increases — even though MA plans are getting an 8.5% increase.”