The American Health Care Association (AHCA) today released a new report outlining the financial impact of the COVID-19 pandemic on the nation’s nursing homes. The report, produced by CLA (CliftonLarsonAllen LLP), highlights that the cost of care and other operations in nursing homes is far exceeding their reimbursement rates, resulting in a projected 4.8 percent negative margin for year end 2022, with a median occupancy of 77.3% This projection is based on maintaining the current Patient-Driven Payment Model through Medicare and state public health emergency (PHE) funding levels. The CLA report emphasizes that any reduction in reimbursement could deepen financial issues for the long term care sector. The industry is also facing a historic workforce crisis and significant declines in occupancy as a result of the pandemic. The unprecedented challenges have resulted in reduced access to care for seniors and individuals with disabilities across the country.
In CLA’s report it notes that its analysis of Medicare margins align with the MEDPAC’s analysis, which shows a 16% Medicare margin for 2020. However, the CLA report notes that MedPAC and other analytic groups appear to view the SNF sector through the lens of a single, national payment system. This results in a misleading outlook about the health of the sector. Based on an evaluation of industry data, CLA believes national figures mask serious issues with the health of the SNF sector.