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CliftonLarsonAllen’s 41st annual skilled nursing report says national median occupancy reached 84.8% in 2025, but its growth slowed compared with the prior two years. The report links higher five-star quality ratings with higher occupancy, lower nurse turnover and stronger operating margins, while warning that shorter managed-care stays raise the importance of efficient admissions and patient flow.
National nursing home occupancy continued to rise in 2025, reaching a median 84.8%, but the pace of growth slowed sharply, according to CliftonLarsonAllen’s 41st Annual SNF Cost Comparison and Industry Trends Report. The report, which includes managed-care data for the first time, says providers may need to focus less on filling every bed and more on quality, referral relationships and efficient operations as shorter managed-care stays reshape admissions.
Occupancy increased by 1.9 percentage points in 2025, compared with gains of 6.3 points in 2024 and 10.3 points in 2023. Over five years, occupancy rose by almost 12 percentage points. Nearly half of facilities reached occupancy of at least 85%, while about 32% remained below 75%, the report said. The figures show a continued recovery in occupancy, but uneven conditions across facilities and slower recent growth.
Managed care accounted for 42.3% of skilled nursing admissions in the report’s 2025 data: 32.4% came from Medicare Advantage and 9.4% from Medicaid managed care. Medicare Advantage residents had a median stay of 25 days, compared with 41 days for traditional Medicare fee-for-service. Median gross daily charges for Medicare Advantage were about 79% of traditional Medicare charges, according to CLA.
The report says these differences put a premium on patient throughput: a Medicare Advantage bed must turn over about 64% more frequently to generate the same number of occupied days. CLA researchers wrote that shorter stays increase the workload involved in admissions, care transitions, authorizations and revenue-cycle activity. Their conclusion is that providers’ financial sustainability depends not only on occupancy but on moving residents through care efficiently while meeting clinical needs and payer requirements.
Quality Links to Stronger Facility Results
CLA’s analysis connects quality ratings with several operating and financial measures. Median occupancy ranged from 77.2% at one-star facilities to 87.6% at five-star facilities. Across the same ratings range, median operating margins rose from 1.8% to 4.7%. These are associations in the report; they do not establish that higher ratings alone caused stronger occupancy or margins.
The workforce findings point in a similar direction. Five-star facilities had median contract labor use of 4%, about half the rate reported for one-star facilities. Across the industry, contract labor use declined to 5.2% in 2025 from a high of 10.3% in 2022. For operators, the findings suggest quality may be tied to the ability to attract referrals, sustain staffing and manage costs at a time when occupancy gains are less rapid.
The report describes quality as a possible “economic flywheel”: better outcomes and ratings may support referrals and payer access, while steadier staffing and operations may help facilities maintain quality. CLA also points to a possible threshold at four stars, but the material provided does not quantify a universal effect or establish that every facility would see the same results.
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Managed Care Changes the Occupancy Equation
Skilled nursing facilities serve residents covered by traditional Medicare, Medicare Advantage and Medicaid programs, each with different payment arrangements and care patterns. CLA says more than 51% of Medicare-eligible Americans, or more than 35 million people, are enrolled in Medicare Advantage. Many states also use managed care in Medicaid. The report’s new payer-specific data offers operators a clearer view of how those arrangements relate to admissions and facility economics.
Occupancy has improved over five years, but the slowing increase in 2025 makes a simple strategy of adding residents less sufficient, CLA’s findings suggest. Shorter Medicare Advantage stays mean more frequent turnover and administrative work. That can make referral coordination, timely authorizations and revenue-cycle processes central to maintaining census and financial performance, alongside appropriate staffing and care quality.
The report also flags possible Medicaid funding pressure from provisions in the One Big Beautiful Bill Act, including potential effects on provider taxes, state-directed payments and eligibility redeterminations. CLA says states that regularly update reimbursement rates to reflect costs, resident acuity, staffing and quality measures may be better positioned to withstand pressure. The source material does not quantify the effects on particular states or facilities.
“Financial sustainability increasingly depends not only on filling beds, but on efficiently moving residents through them.”
— CLA researchers, as quoted in the report
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Causation and Funding Effects Remain Unclear
The report’s comparisons show relationships between quality ratings and financial or staffing outcomes, but the information provided does not establish cause and effect. It is unclear how much of the gap reflects quality itself versus other factors, such as location, facility size, payer mix, resident needs or management decisions. The report’s suggested four-star threshold is a potential pattern, not a guaranteed financial turning point for every provider.
The eventual effects of OBBBA-related Medicaid changes also remain uncertain. CLA identifies potential pressure involving provider taxes, state-directed payments and eligibility reviews, but the material does not specify final state-level policy outcomes, timing or the resulting dollar impact on nursing homes. Nor does the occupancy data establish whether slower growth will persist beyond 2025.
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Providers Face Payer and Policy Tests
Providers will continue to contend with payer-specific lengths of stay, payment levels and authorization requirements while trying to maintain staffing and quality. The report’s findings make patient flow and operational execution key areas to watch alongside occupancy: future data can show whether facilities with stronger ratings continue to report better staffing stability and operating results.
State reimbursement decisions and implementation of federal Medicaid provisions will also shape the outlook, although details and impacts are not yet settled. Further reporting should track how states revise payment policies, how managed-care admissions develop and whether the reported association between quality ratings and facility performance holds in subsequent annual data.
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Key Questions
What is the main finding of CLA’s report?
Occupancy rose more slowly in 2025, while CLA’s comparisons linked higher quality ratings with greater occupancy, lower nurse turnover and stronger operating margins. The report also highlights the added operational demands of shorter managed-care stays.
How high was nursing home occupancy in 2025?
The national median was 84.8%. It increased 1.9 percentage points during 2025, compared with increases of 6.3 points in 2024 and 10.3 points in 2023.
How did Medicare Advantage stays differ from traditional Medicare stays?
The reported median stay was 25 days for Medicare Advantage and 41 days for Medicare fee-for-service. CLA also reported lower median gross daily charges for Medicare Advantage, at about 79% of traditional Medicare charges.
Does the report prove that higher quality ratings cause better financial results?
No. The report describes associations between star ratings and measures such as occupancy and operating margins. The supplied findings do not establish that higher ratings alone caused those outcomes.
What Medicaid-related risks does the report identify?
CLA flags possible effects from OBBBA provisions involving provider taxes, state-directed payments and Medicaid eligibility redeterminations. The specific timing and financial effects for states and facilities remain unclear in the material provided.
Source: rss
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