SNN Payer Survey: 56% of Nursing Home Providers Cite Medicare Advantage as Top Pressure

Why It Matters

The findings highlight a looming liquidity crisis for skilled‑nursing facilities, forcing them to curtail access and care quality unless reimbursement reforms or rate hikes materialize.

Key Takeaways

• 56% of nursing homes name Medicare Advantage as biggest financial pressure
• 75% limit admissions or cut services due to low reimbursement
• 75% say higher base rates across all payers would improve sustainability
• Prior authorization delays affect 44% of providers, driving administrative burden
• CMS proposes 2.4% Medicare rate increase, to be finalized in July

Pulse Analysis

Medicare Advantage’s expanding footprint is reshaping the economics of skilled‑nursing facilities (SNFs). The SNN survey shows more than half of operators flag MA plans as the top source of financial strain, driven by lower per‑stay payments and cumbersome prior‑authorization processes. While Medicaid still pressures 31% of respondents, the intensity of MA‑related challenges—especially reimbursement inadequacy and administrative overhead—has prompted many operators to rethink their admission strategies.

In reaction, 75% of surveyed providers are either turning away new MA patients or scaling back services such as therapy to preserve margins. A quarter have bolstered billing teams or outsourced reimbursement functions, aiming to streamline claim workflows and reduce denial rates. The administrative burden, cited by 44% of facilities, translates into higher labor costs and delayed cash flow, eroding the financial viability of many SNFs that already operate on thin margins.

Policy levers remain the most potent remedy. CMS’s proposed 2.4% uplift to Medicare rates, though modest, signals a willingness to address underpayment, yet providers overwhelmingly call for higher base rates across all payer types. Coupled with calls for reduced prior‑authorization requirements and clearer value‑based incentive structures, these reforms could stabilize the sector. However, looming Medicaid budget cuts—estimated at $1 trillion over ten years—underscore the urgency for comprehensive payment reforms to prevent a wave of service reductions and admission caps that would affect vulnerable seniors nationwide.