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Occupancy at skilled nursing facilities reached a national median of 84.8% in 2025, but its annual gain slowed, according to CLA’s industry report. The report links higher five-star quality ratings with higher occupancy, lower nurse turnover and stronger operating margins, while showing how shorter, lower-reimbursing Medicare Advantage stays increase pressure on admissions and operations.
Skilled nursing occupancy growth slowed in 2025, while facilities with higher quality ratings tended to report higher occupancy and operating margins, according to CliftonLarsonAllen’s (CLA) 41st Annual SNF Cost Comparison and Industry Trends Report. The report also adds managed care data for the first time, highlighting the operational pressures created by shorter Medicare Advantage stays and lower daily charges.
The national median occupancy rate reached 84.8% in 2025, and nearly half of skilled nursing facilities were at 85% occupancy or above. But the increase was 1.9 percentage points for the year, compared with gains of 6.3 points in 2024 and 10.3 points in 2023. Over five years, occupancy rose almost 12 percentage points. About 32% of facilities remained below 75% occupancy, CLA reported.
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. CLA reported a median stay of 25 days for Medicare Advantage residents, compared with 41 days for traditional Medicare fee-for-service. Medicare Advantage median gross daily charges were about 79% of the traditional Medicare figure.
The report says these differences mean providers need to manage turnover, authorizations, care transitions and revenue-cycle work alongside occupancy. It estimates a Medicare Advantage bed must turn over about 64% more frequently to generate the same number of occupied days. That is an operational comparison in the report, not a measure of profit or a guarantee about any individual facility.
Quality and the Facility Business Model
CLA’s findings put the focus on the composition and management of occupancy, not just the number of filled beds. When stays are shorter and daily charges lower, facilities may need to process more admissions and discharges to maintain occupied days. That can add pressure to staffing, clinical coordination, payer authorizations and billing.
Quality ratings also track with several business measures in the report. Median occupancy ranged from 77.2% at one-star facilities to 87.6% at five-star facilities. Operating margins ranged from 1.8% to 4.7% across those rating groups. These are associations in the report; they do not establish that a higher rating alone caused stronger results. Still, they suggest quality and operational capacity may affect a facility’s ability to attract residents and sustain its workforce.
For residents and families, the findings underscore that a facility’s ability to manage staffing and care needs matters alongside its occupancy. For operators, the data point to a business model increasingly shaped by payer mix, efficient patient flow and quality performance. The report does not show that every facility can raise occupancy or margins simply by improving its rating.
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Managed Care Changes Admission Patterns
Medicare Advantage has become a major part of the skilled nursing payer landscape. The report says more than 35 million Medicare-eligible Americans, or more than 51%, are enrolled in Medicare Advantage. Many states also use managed care in Medicaid programs. CLA’s inclusion of managed care data offers a new view of how these plans feature in nursing home admissions and operating requirements.
The report describes a five-year occupancy rebound, but annual gains have eased since the larger increases in 2023 and 2024. At the same time, payer differences are relevant because shorter stays can mean more frequent resident turnover. CLA’s figures show that Medicare Advantage admissions and traditional Medicare admissions do not have the same median length of stay or daily gross charges.
Quality measures varied alongside staffing indicators. Contract labor use across facilities fell from a reported high of 10.3% in 2022 to 5.2% in 2025. Among five-star facilities, median contract labor use was 4%, about half the level at one-star facilities. CLA also reported that higher-rated facilities generally had lower nurse turnover, but its supplied findings do not establish why those differences occur.
“Financial sustainability increasingly depends not only on filling beds, but on efficiently moving residents through them.”
— CLA report researchers
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Limits of the Report’s Findings
The reported links between five-star ratings, occupancy and margins are associations, not proof that quality ratings cause better financial performance. The material provided does not detail how facilities were selected for the comparisons or account for every difference in location, resident needs, ownership, payer contracts and local labor markets. The findings should not be read as predictions for a specific nursing home.
The report also flags possible Medicaid funding pressure tied to provisions of the One Big Beautiful Bill Act, including potential effects on provider taxes, state-directed payments and eligibility redeterminations. The supplied information does not quantify those effects or specify how they will play out in each state. It remains unclear which facilities or state programs would face the greatest impact.
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Medicaid Policy and Provider Response
Providers will continue to contend with managed care requirements and payer-specific lengths of stay, while the financial implications of possible Medicaid policy changes develop. CLA says states that update reimbursement rates to reflect costs, resident acuity, staffing and quality measures may be better positioned to manage funding pressure. The report material does not provide a schedule for state decisions or quantify the potential changes.
For operators, the near-term questions include whether they can match admissions to staffing and clinical capacity, handle authorizations promptly and maintain quality while managing faster turnover. Future data will be needed to show whether slower occupancy growth persists and whether the reported quality and financial patterns hold across facilities and markets.
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Key Questions
What was the national median nursing home occupancy rate in 2025?
CLA reported a national median occupancy rate of 84.8% for skilled nursing facilities in 2025. The annual increase was 1.9 percentage points, down from 6.3 points in 2024.
How did Medicare Advantage stays compare with traditional Medicare stays?
The report put the median Medicare Advantage stay at 25 days, compared with 41 days for Medicare fee-for-service. It also reported Medicare Advantage median gross daily charges at about 79% of the traditional Medicare figure.
Did higher quality ratings mean higher operating margins?
CLA reported that median operating margins ranged from 1.8% at one-star facilities to 4.7% at five-star facilities. The report describes an association; it does not establish that higher ratings caused the margin difference.
What Medicaid changes does the report flag?
The report points to potential effects of the One Big Beautiful Bill Act on provider taxes, state-directed payments and Medicaid eligibility redeterminations. The supplied material does not quantify the effects or identify which states and facilities would be most affected.
Source: rss
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