Nursing Home Operators Should Consider Less Beds

The COVID-19 pandemic has impacted nursing homes in unprecedented ways. In the third quarter of 2020, nursing homes were at approximately 74% capacity across the nation. Having more beds equates to higher reimbursement. However, due to COVID-19 having more beds has meant a greater risk of infection. Marc Zimmet of Zimmet Healthcare Services Group has recommended that nursing home operators reconsider the capacity for beds. It could help organizations navigate losses incurred due to the pandemic. Even prior to the pandemic, skilled nursing facilities were on the decline. With COVID-19, consumers continued to lean away from nursing homes and towards more comfortable and less expensive alternatives such as home health care.

The rapid spread of the coronavirus required nursing homes to separate residents from double-occupancy rooms to single-occupancy rooms. Even new residents moving into nursing homes are requesting private rooms. As the occupancy numbers have declined over the past year, the expenses have not. Certain states that use a cost-based reporting model to set their Medicaid rates also include an occupancy-floor component. This avoids rewarding inefficient providers and therefore penalizes them for having a skewed ratio of occupied to certified beds. Due to the reimbursement policies, states prefer nursing homes closer to full occupancy rates. Zimmet recommends nursing home operators reconsider having less beds for this reason. Nursing homes can also consider surrendering beds temporarily and then restore them when the demand increases.

With the ongoing pandemic and a prolonged recovery, Zimmet advises to nursing homes to consider the option of having less beds.

Read more