Skilled nursing facility payor mix review

When patients need rehabilitation or post-acute care following a hospital stay for illness, injury, or surgery, skilled nursing facilities (SNFs) provide long- and short-term care that covers a variety of conditions.

This Healthcare Insight continues a series of reviews on SNF metrics, including financial trends and quality ratings. Using data from the Definitive Healthcare LongTermCareView product, we break down the payor mix of more than 13,900 SNFs in the U.S. to understand their patient population and financial health. Data is sourced from the Medicare Cost Report (MCR) and results in this analysis are according to the last 12-month interval  tracked in our database.

What is SNF payor mix?

Payor mix data breaks down revenues, charges, discharges, and patient days that come from different medical insurance payors. In LongTermCareView, the proprietary calculation is based on a facility’s charge and revenue measures from the Medicare Cost Report.

For example, a patient over the age of 65 spends six days at a SNF following a hospital discharge. While they have Medicare and Medicaid insurance coverage, each payor may only reimburse for part of the SNF days. Their six-day SNF stay might be covered 25% by Medicare and 75% by Medicaid. Similar information for all patients can be aggregated to estimate a SNF’s approximate payor mix by patient days.

What is the average SNF payor mix?

SNF payor mix by total patient days breaks down as follows:

• Medicaid 54.5%
• Medicare 12.5%
• Private/self-pay/other 33.0%

Compared to average hospital payor mixes, SNFs have a higher percentage of patient days covered by Medicaid, which is less than 10% for hospitals. SNFs care for many older patients, some of which may have Medicare and Medicaid healthcare coverage. Nearly 20% of Medicare beneficiaries use Medicaid for health and long-term care services.

How does SNF payor mix vary by region?

When reviewing SNF payor mix at a regional level, facilities in the Midwest have the lowest percentage of Medicaid days and the highest private/self-pay mix. SNFs in the western U.S. have the highest Medicare days. Similar to hospital payor mix, some of the differences are due to the population makeup of the states in the region. For example, a couple of western U.S states such as California and Alaska each have Medicaid enrollment percentages above the national average.