Explore key findings from CLA’s latest SNF report, including managed care, quality, labor, and occupancy trends.
As the longest-running report of its kind, CLA’s analysis draws on approximately 11,800 CMS cost reports for fiscal year 2025, representing more than two-thirds of Medicare-certified nursing facilities.
This year’s edition introduces managed care data for the first time while examining the structural forces reshaping skilled nursing, including an aging population, constrained labor, managed care and value-based models, and tightening bed capacity.
“Skilled nursing providers have spent the last several years navigating staffing shortages, reimbursement pressures, and a changing patient mix,” said Stephen Taylor, principal and senior living and care segment leader at CLA. “What this report shows is that quality has become a competitive advantage. Higher-performing providers are seeing benefits across occupancy, labor stability, and admissions. As demand grows and payment models evolve, quality is increasingly becoming a key driver of both resident outcomes and financial sustainability.”
Key highlights from the report:
- Occupancy recovery continues: Median SNF occupancy reached 84.8% in 2025, with nearly half of providers at 85%+ occupancy, though growth is beginning to slow.
- Margins improved: Median operating margins increased to 3.1%, while contract labor use declined to 5.2%, continuing post-pandemic normalization.
- Managed care dominates admissions: Managed care represents 42% of admissions. Because Medicare Advantage stays are shorter than traditional Medicare, SNFs need about 1.6 MA admissions to match the census impact of one Medicare admission.
- Quality drives performance: 5-star facilities outperform lower-rated peers with higher occupancy, stronger margins, and lower contract labor use.
- A 4-star tipping point: Most margin gains occur above the 3-star level, suggesting a significant financial advantage for providers achieving 4+ stars.
- Demand will exceed supply: The 85+ population is expected to grow 18% over five years, while SNF bed availability relative to that population declines across states.
- Policy changes ahead: Upcoming Medicaid and Medicare payment reforms, including value-based care models, are expected to significantly impact SNF economics.
The full report, which also includes operating, labor, liquidity, and cost benchmarks, is available at CLAconnect.com. For press inquiries or to request an interview with the report’s authors, please contact clamediarelations@fahlgren.com.
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CLA exists to create opportunities for our clients, our people, and our communities through industry-focused wealth advisory, digital, audit, tax, consulting, and outsourcing services. With nearly 9,000 people, more than 120 U.S. locations, and a global vision, we promise to know you and help you. CLA (CliftonLarsonAllen LLP) is an independent network member of CLA Global. See CLAglobal.com/disclaimer. Securities and investment advisory services are offered through CliftonLarsonAllen Wealth Advisors, LLC, an SEC-registered investment advisor, member FINRA/SIPC.