Nursing Home Occupancy Is Near a Five-Year High — but a New Report Says Filling Beds Alone Won’t Pay the Bills

Minneapolis, Minnesota — America’s nursing homes have clawed back nearly all the occupancy they lost during the pandemic. A new industry report argues the recovery is about to get much harder — and that filling beds alone won’t keep facilities in the black.

CliftonLarsonAllen’s 41st annual SNF cost report, released Friday, draws on federal data from roughly 11,800 skilled nursing facilities — more than two-thirds of all Medicare-certified homes. National median occupancy hit 84.8% in 2025, and nearly half of all facilities now run at 85% or higher.

But the pace is slowing fast. Homes gained 10.3 points in 2023 and 6.3 more in 2024; last year they added just 1.9. About a third still sit below 75% occupancy.

The Medicare Advantage math problem

The bigger challenge is who’s filling the beds. For the first time, the report breaks out managed care data, and the numbers explain why operators feel squeezed. Managed care now accounts for 42.3% of skilled nursing admissions — 32.4% Medicare Advantage, 9.4% Medicaid managed care. More than 35 million Americans are enrolled in MA plans.

Those patients stay shorter and pay less. The median Medicare Advantage stay runs 25 days, versus 41 under traditional Medicare, and MA daily charges run about 79% of the traditional rate. A Medicare Advantage bed has to turn over roughly 64% more often to produce the same occupied days.

“Financial sustainability increasingly depends not only on filling beds, but on efficiently moving residents through them,” the authors wrote. That means more admissions, transitions and authorizations — with less revenue attached to each move.

Quality pays — literally

The sharpest finding is the spread between good facilities and struggling ones. Five-star homes post median occupancy of 87.6% versus 77.2% at one-star facilities, and margins run 4.7% at the top versus 1.8% at the bottom. Nearly all of that gap opens between three and five stars — a threshold where referrals and payer networks start to compound. Quality, the authors conclude, works as an “economic flywheel.”

Staffing tells the same story. Contract labor has fallen from 10.3% of hours in 2022 to 5.2%, and five-star facilities use it at half the rate of one-star homes.

Headwinds ahead

Demographics are coming, ready or not. The 85-plus population will grow by 1.22 million people — 18% — within five years, and every baby boomer reaches Medicare eligibility by 2030. The report also warns that One Big Beautiful Bill Act changes — provider taxes, state-directed payments, eligibility redeterminations — could squeeze state budgets, and some states are already trimming payments at underperforming homes.

CLA’s takeaway: stop chasing census for its own sake. The operators that thrive will right-size occupancy, move patients efficiently and let quality ratings do the marketing.