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CliftonLarsonAllen’s 2025 data show national skilled nursing occupancy reached 84.8%, while annual growth slowed to 1.9 percentage points. Its report links higher star ratings with stronger occupancy and operating margins, as shorter Medicare Advantage stays and lower daily charges increase the need for efficient admissions and resident turnover.
U.S. skilled nursing occupancy reached a median 84.8% in 2025, but its annual gain slowed to 1.9 percentage points, according to CliftonLarsonAllen’s 41st Annual SNF Cost Comparison and Industry Trends Report. The report, which includes managed care data for the first time, argues that providers may need to focus on the fit and pace of admissions, care quality and operating efficiency—not simply filling beds—as managed care changes patient stays and reimbursement.
The slowdown follows faster gains in earlier years: occupancy rose 6.3 percentage points in 2024 and 10.3 points in 2023. Over five years it increased by nearly 12 percentage points, CLA reported. Even with the national median at 84.8%, about 32% of facilities remained below 75% occupancy, while nearly half were at 85% or higher.
In CLA’s 2025 data, managed care accounted for 42.3% of skilled nursing admissions: 32.4% came from Medicare Advantage and 9.4% from Medicaid managed care. The report says the median stay for Medicare Advantage residents was 25 days, 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 those differences put pressure on facilities to coordinate admissions, authorizations, care transitions and billing efficiently. Its analysis estimates that a Medicare Advantage bed must turn over about 64% more often to generate the same number of occupied days. That is an operational comparison in the report, not a guarantee of equal revenue or profit.
Quality and the Provider Business Model
The report presents quality as a possible reinforcing advantage: facilities with higher five-star ratings also tended to have higher occupancy, lower nurse turnover, less contract labor use and stronger operating margins. Median occupancy ranged from 77.2% at one-star facilities to 87.6% at five-star facilities. Median operating margins ranged from 1.8% to 4.7% across those rating groups.
CLA describes this relationship as an “economic flywheel,” suggesting that quality may support referral access and workforce stability, which may in turn help operations. The figures show an association, however; they do not establish that higher ratings alone caused better occupancy or margins. The pattern could matter to operators and referral partners as they respond to shorter stays and varied payer requirements.
Workforce measures also differed by rating. Contract labor use fell across the industry from a high of 10.3% in 2022 to 5.2% in 2025. Among five-star facilities, median contract labor use was 4%, about half the rate reported for one-star facilities. The report does not establish whether quality improvements led to lower reliance on temporary staff or whether other factors contributed.
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Managed Care Changes Stay Patterns
Medicare Advantage and Medicaid managed care are increasingly relevant to nursing home finances. CLA says more than 35 million Medicare-eligible Americans—over 51%—are enrolled in Medicare Advantage, while many states also use managed care in Medicaid. The new payer data in this year’s report gives providers a clearer view of how those admissions fit into facility operations.
The report’s central distinction is between occupancy and the work required to sustain it. Shorter stays can mean more frequent admissions and discharges, along with additional authorization and revenue-cycle tasks. CLA concludes that providers need to manage throughput and resident needs alongside payer requirements, staffing capacity and quality outcomes, rather than treating census alone as a sufficient measure of performance.
CLA also flags possible Medicaid funding pressure linked to the One Big Beautiful Bill Act, including potential effects on provider taxes, state-directed payments and eligibility redeterminations. The supplied report material does not quantify those effects. It says states that update reimbursement rates to reflect costs, resident acuity, staffing and quality measures may be better positioned to handle funding pressures.
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What the Report Cannot Establish
The figures describe relationships across facility rating groups, but do not show that a higher star rating itself caused higher occupancy, lower turnover or stronger margins. The report material provided does not specify how factors such as location, facility size, resident acuity, ownership or local payer arrangements affect those comparisons.
The effects of OBBBA-related Medicaid changes are also unsettled in the material. It identifies potential pressure points but offers no quantified forecast of reimbursement changes, facility impacts or timing. Nor does the report establish whether the slower 2025 occupancy gain will continue. Its data describe that year, not a confirmed future trend.
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Measures to Watch in Future Data
Future industry data will show whether occupancy gains continue to moderate and whether the reported links between star ratings, staffing and margins persist. Providers will also need to track how Medicare Advantage admission volume, length of stay, daily charges and authorization demands affect their own operations; national medians may not reflect individual facilities.
For Medicaid, the next developments depend on how federal policy changes are implemented and how states set reimbursement and manage funding. The report points to rates, staffing, acuity and quality measures as areas to monitor, but does not give a timetable or predict specific state decisions.
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Key Questions
What did CLA report about nursing home occupancy?
CLA reported a national median occupancy of 84.8% in 2025. The gain slowed to 1.9 percentage points for the year, from 6.3 points in 2024 and 10.3 points in 2023.
How much of skilled nursing admissions came from managed care?
In CLA’s 2025 data, managed care represented 42.3% of admissions, including 32.4% from Medicare Advantage and 9.4% from Medicaid managed care.
Why does Medicare Advantage affect facility operations?
CLA reported a median stay of 25 days for Medicare Advantage residents, compared with 41 days for traditional Medicare fee-for-service. The report says shorter stays and lower median gross daily charges can require more frequent turnover and efficient processing.
Did CLA prove that higher quality ratings cause better margins?
No. The report found that higher-rated facilities tended to have stronger operating measures, including higher median margins, but the reported association does not establish that ratings caused those differences.
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