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CliftonLarsonAllen’s annual skilled nursing report says national median occupancy reached 84.8% in 2025, but its increase slowed to 1.9 percentage points. The report’s data associates higher five-star quality ratings with stronger occupancy and operating margins, while shorter, lower-charge Medicare Advantage stays increase the importance of efficient patient turnover.
National nursing home occupancy growth slowed in 2025, even as higher-rated skilled nursing facilities reported stronger occupancy and operating margins, according to CliftonLarsonAllen’s 41st Annual SNF Cost Comparison and Industry Trends Report. The report, released Friday, includes managed care data for the first time and argues that operators increasingly need to balance quality, patient flow and financial performance rather than focus only on filling beds.
The report puts national median occupancy at 84.8% in 2025, with nearly half of facilities at 85% occupancy or higher. Occupancy rose by 1.9 percentage points during the year, compared with gains of 6.3 points in 2024 and 10.3 points in 2023. The five-year increase was nearly 12 percentage points, but about 32% of facilities still operated below 75% occupancy.
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 reports a median stay of 25 days for Medicare Advantage residents, compared with 41 days for traditional Medicare fee-for-service. Median gross daily charges for Medicare Advantage were about 79% of traditional Medicare charges.
CLA says facilities must handle more admissions and care transitions when stays are shorter, while managing authorizations and revenue-cycle work. Its analysis estimates that a Medicare Advantage bed needs to turn over about 64% more frequently to produce the same number of occupied days as a traditional Medicare bed. That operational burden helps explain the report’s emphasis on efficient patient movement as well as occupancy.
Quality Shapes Census and Margins
The report links higher quality ratings with stronger operating indicators, though it does not establish that ratings alone cause better financial results. Median occupancy ranged from 77.2% at one-star facilities to 87.6% at five-star facilities. Operating margins ranged from 1.8% at one-star facilities to 4.7% at five-star facilities, with CLA reporting a larger margin gain between three and five stars than between one and three.
The pattern matters to operators because occupancy is no longer rising as quickly, while payer mix can make each occupied bed produce different workloads and revenue. CLA’s analysis suggests that quality, referral relationships and efficient operations may help facilities compete for admissions and sustain margins. The report describes quality as a possible “economic flywheel”: better performance may accompany stronger demand and workforce stability, which can in turn support operations. That is the report’s interpretation of its data, not a guarantee of results for an individual facility.
Staffing measures also varied with ratings. Contract labor use among five-star facilities had a median of 4%, about half the rate at one-star facilities. Across the industry, contract labor use fell to 5.2% in 2025 from a high of 10.3% in 2022. The figures put workforce stability alongside census and margins as a factor in the business outlook.
skilled nursing facility quality rating monitor
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Managed Care Changes the Operating Mix
CLA says the new managed care data reflects the growing influence of Medicare Advantage and Medicaid managed care on skilled nursing admissions and finances. The report notes that more than 51% of Medicare-eligible Americans—over 35 million people—are enrolled in Medicare Advantage. Many states also use managed care in Medicaid programs.
Traditional occupancy measures do not capture all differences among payers. CLA’s figures show shorter median stays and lower median gross daily charges for Medicare Advantage than for traditional Medicare. The report says providers therefore need to plan for quicker turnover and more related admissions, transitions, authorization work and billing activity. Its findings are based on industry data for 2025 and do not mean every facility has the same payer mix or operating results.
The report also flags possible Medicaid funding pressure connected with provisions of the One Big Beautiful Bill Act, including potential effects on provider taxes, state-directed payments and eligibility redeterminations. CLA says states that regularly update reimbursement rates to reflect costs, resident acuity, staffing and quality measures may be better positioned to manage pressure. The supplied report summary does not quantify the effects for particular states or facilities.
“As shorter lengths of stay increase, patient throughput requirements — more admissions, transitions, authorizations, and revenue-cycle activity — take on greater importance.”
— CLA researchers, as quoted in the report
Limits of the Report’s Findings
The report describes associations, not proof of cause and effect. The supplied material does not establish whether higher ratings lead to stronger occupancy and margins, whether better-resourced facilities are more able to earn higher ratings, or how other factors contribute. It also does not specify how the reported relationships vary by region, facility size or individual payer contracts.
The scale and timing of potential Medicaid effects from the One Big Beautiful Bill Act remain unclear in the report summary. It identifies possible pressure on provider taxes, state-directed payments and eligibility, but provides no state-by-state projections or quantified impact. The figures also describe 2025, so they do not establish how occupancy, payer mix or costs have changed since that period.
Operators Face a Flow-and-Quality Test
For operators, the report points to the need to monitor occupancy, payer mix, turnover, staffing and quality measures together, rather than treating bed counts as a complete measure of financial health. Facilities will have to manage admissions and authorizations while matching staffing and clinical capacity to resident needs and payer requirements.
State reimbursement policy and the implementation of federal legislation will be important to watch as Medicaid funding arrangements develop. The report does not provide a specific forecast or timetable for those effects. Future data will be needed to show whether slower occupancy growth continues and whether the links between quality ratings and financial performance hold across facilities and changing payer conditions.
Key Questions
What did CLA report about nursing home occupancy?
CLA reported that median occupancy reached 84.8% in 2025. It rose 1.9 percentage points that year, slower than the increases reported for 2024 and 2023.
What does the report mean by quality as an “economic flywheel”?
CLA uses the phrase for an observed association: facilities with higher star ratings generally had higher occupancy, lower nurse turnover, less contract labor use and stronger operating margins. The report does not prove that quality ratings alone caused those outcomes.
How did Medicare Advantage stays compare with traditional Medicare stays?
The report gives a 25-day median stay for Medicare Advantage, compared with 41 days for Medicare fee-for-service. It also reports that Medicare Advantage median gross daily charges were about 79% of traditional Medicare charges.
What Medicaid funding concerns does the report identify?
CLA flags possible effects from the One Big Beautiful Bill Act on provider taxes, state-directed payments and Medicaid eligibility redeterminations. The supplied findings do not quantify the effects or specify which states or facilities would be most affected.
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