Report reveals critical cost trends and operational insights shaping the future of skilled nursing facilities nationwide.
Today, CLA (CliftonLarsonAllen LLP) announced the release of its 40th annual Skilled Nursing Facility (SNF) Cost Comparison and Industry Trends Report. This landmark edition provides a deep look into the challenges, opportunities, cost trends, and policy shifts facing the SNF industry.
As the longest-running report of its kind, CLA’s analysis provides essential benchmark data and strategic insights for providers navigating today’s complex healthcare environment for skilled nursing care. This year’s report, themed “Transformation for Excellence – 2025 Edition,” highlights how SNFs are adapting to seismic changes in reimbursement, regulation, and operational demands.
CLA managing principal of industry, health care and life sciences, Michael Siegel, shares “Our 40th edition SNF report is a reminder that transformation never ends, and the future will belong to those who can deliberately adapt and execute. At CLA, we always have and always will come alongside organizations to help advance their mission, create clarity, solve for complexity, and create opportunities to strengthen their future.”
“This year’s report underscores a key truth: quality in skilled nursing care is no longer just a differentiator; rather, it’s the benchmark of success,” said Stephen Taylor, a principal in the health care and life sciences group at CLA. “Facilities that invest in quality, embrace digital transformation, and understand the nuances of reimbursement will be better positioned to thrive in the next decade.”
Key highlights from the report:
- SNF occupancy stabilized at 83.3% nationally in 2024, with operating margins up to 1.8%.
- 5-star facilities outperformed peers, reaching 2.6% margins and 86% occupancy.
- One Big Beautiful Bill Act (OBBBA) legislation brings $900B in Medicaid cuts and a 10-year pause on staffing mandates, reshaping SNF finances.
- Medicaid remains dominant: Still more than 60% of payer mix nationally.
- Quality = economic access: 5-star facilities outperform 1-star peers by over 200 bps in margin and nearly 7 points in occupancy. Quality now drives referral volume, payer contracting, and labor stability — the new currency of SNF economics.
- Digital transformation arrives: AI, analytics, and integrated digital platforms are creating the same kind of disruption the internet did in the 1990s. The next decade’s winners will be those who digitally transform the business of the business.
- A decade of transformation ahead: As the oldest Baby Boomers turn 80, demographic demand meets workforce and funding challenges. Success will require sophisticated reimbursement strategy, quality excellence, and digital maturity — the pillars of Transformation for Excellence.
- Regional cost differences emphasize the need for localized financial strategies.
- Facilities are aligning operations with value-based reimbursement models to improve outcomes and control costs.
“One potential uncertainty moving forward, and something CLA will be closely monitoring, is the impact of Medicaid funding reductions included in OBBBA,” Taylor explained. “While quality and efficiency will remain the hallmark of top-performing operators, reduced Medicaid payments could accelerate consolidation and ownership transitions among lower-performing or high-Medicaid facilities. Historically, reimbursement compression has driven structural change in this industry, and we expect this cycle to be no different.”
CLA will be sponsoring and attending the AHCA/NCAL Convention & Expo this month, where firm leaders will be available to discuss the report and its implications with industry stakeholders and media. For press inquiries or to request an embargoed preview, 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 130 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. Investment advisory services are offered through CliftonLarsonAllen Wealth Advisors, LLC, an SEC-registered investment advisor.