April 1, 2020
Care Center Occupancy Data Shows Decline in 2019
On April 1, 2020 by Jeff Bostic
After showing some improvement in 2017, occupancy results for care centers that participated in the Long-Term Care Imperative annual occupancy survey have declined slightly throughout 2018 and 2019. Occupancy for 2019 was the lowest we’ve ever found, 87.1%, and it declined each quarter throughout the year.
Not all regions are experiencing the same occupancy situation. The Twin Cities metro region was above the statewide average occupancy percentage in every quarter of 2018 and 2019, and their occupancy percentage was highest in the state in 2019 at 88.8%. At the other end of the scale, several rural regions of the state had very low care center occupancy throughout the year -- especially southeast Minnesota, which had the lowest occupancy for the year and was under 85% in each of the last three quarters.
Low occupancy is a challenge for care centers for a few reasons, including:
- the state’s surcharge program that charges on a per active bed basis and compensates providers through the daily MA rate; as occupancy declines, losses on the bed surcharge grow.
- the MA payment system pays a daily rate based on historical costs, so if the number of resident days drops, costs used to calculate the rates are not fully reimbursed during the subsequent rate year.
The historically low occupancy figures may be exacerbated by COVID-19, which raises questions about what clients care centers can serve as well as whether people will attempt to avoid placing loved ones in those settings while the disease is spreading. Providers who were already struggling with low occupancy are likely to face even more financial pressure if occupancy drops further due to the current situation.