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CliftonLarsonAllen’s annual skilled nursing report says U.S. nursing home occupancy reached a median 84.8% in 2025, but annual growth slowed. Its data associate higher five-star quality ratings with higher occupancy, lower nurse turnover and stronger operating margins, as managed care brings shorter stays and lower daily charges. The report describes quality as a potential economic “flywheel,” not proof that quality alone causes better financial results.
U.S. skilled nursing occupancy continued to rise in 2025, but its growth slowed, while managed care accounted for 42.3% of admissions, according to CliftonLarsonAllen’s 41st annual industry report. The report, which includes managed care data for the first time, says providers may need to focus on patient flow, quality and operating efficiency rather than simply filling beds.
The report puts national median occupancy at 84.8% in 2025, up 1.9 percentage points during the year. That followed gains of 6.3 points in 2024 and 10.3 points in 2023. Over five years, occupancy increased by almost 12 percentage points, but about 32% of facilities remained below 75% occupancy. Nearly half operated at 85% or higher.
Managed care made up 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, compared with 41 days for traditional Medicare fee-for-service. Median gross daily charges for Medicare Advantage were about 79% of the traditional Medicare figure.
CLA says the shorter stays and lower daily charges increase the importance of admissions, transitions, authorizations and billing processes. Its analysis estimates a Medicare Advantage bed must turn over about 64% more frequently to generate the same number of occupied days. The report says facilities would need about 1.6 Medicare Advantage admissions for each traditional Medicare admission to produce equivalent census.
Quality’s Link to Financial Performance
CLA’s figures connect quality ratings with several measures that affect facility operations and finances. Median occupancy rose from 77.2% at one-star facilities to 87.6% at five-star facilities. Median operating margins ranged from 1.8% at one-star facilities to 4.7% at five-star facilities. The report also found higher-rated facilities had lower nurse turnover and less use of contract labor.
Those patterns matter as facilities contend with shorter managed-care stays: maintaining occupancy may require faster patient throughput, while clinical demands and payer requirements still have to be met. CLA calls quality an “economic flywheel,” arguing it may support referrals, workforce stability and financial performance. The data show an association, however, and do not establish that higher ratings alone caused stronger results.
The labor figures offer another point of comparison. Contract labor use across facilities fell from a high of 10.3% in 2022 to 5.2% in 2025. Among five-star facilities, the median was 4%, about half the rate at one-star facilities, CLA reported. This suggests staffing stability is part of the relationship the report identifies, but the supplied findings do not isolate why facilities differ.
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Managed Care Changes the Admission Mix
The report’s new managed care data reflect the growing role of Medicare Advantage and Medicaid managed care in skilled nursing. More than 51% of Medicare-eligible Americans, or over 35 million people, are enrolled in Medicare Advantage, according to the source material. Many states also run Medicaid programs through managed care.
For operators, the payer mix can shape length of stay, payment and the pace of admissions. CLA’s analysis says a facility’s financial approach must account for residents moving through beds more quickly, along with the added work of authorizations and revenue-cycle processing. It frames “right-sizing” occupancy as more useful than treating maximum bed use as the sole goal.
The report also flags possible Medicaid funding pressure related to the One Big Beautiful Bill Act, including potential effects on provider taxes, state-directed payments and eligibility redeterminations. It says states that regularly update rates to reflect costs, resident acuity, staffing and quality may be better positioned, while the effects will vary with state funding structures.
“Financial sustainability increasingly depends not only on filling beds, but on efficiently moving residents through them.”
— CLA report researchers
Limits of the Report’s Findings
The supplied findings describe relationships between quality ratings and operating outcomes, but do not establish that quality improvements directly cause higher occupancy or margins. The report’s data also do not explain how much results vary by region, facility size, ownership or individual payer contracts.
The specific effects of the One Big Beautiful Bill Act on state Medicaid budgets and nursing home reimbursement remain uncertain. CLA identifies potential pressure points, but the material provided does not quantify the likely financial impact or specify when changes would affect individual facilities.
Operators Face Payer and Medicaid Pressures
The report points providers toward closer management of admissions, authorizations, transitions and billing, alongside quality and staffing. The next test will be whether facilities can adapt operations to shorter managed-care stays without compromising care or financial stability.
Medicaid policy and state reimbursement decisions are also developments to watch. CLA says the impact will depend in part on how states set rates and rely on provider taxes or state-directed payments. The report does not provide a timetable or facility-by-facility forecast, so the scale of those effects remains to be seen.
Key Questions
What did CLA report about nursing home occupancy?
Median occupancy was 84.8% in 2025, but it increased by 1.9 percentage points during the year, slower than the gains reported for 2023 and 2024.
How large a share of admissions came from managed care?
Managed care accounted for 42.3% of skilled nursing admissions in CLA’s 2025 data, including 32.4% from Medicare Advantage and 9.4% from Medicaid managed care.
What relationship did the report find between quality ratings and margins?
CLA reported median operating margins of 1.8% at one-star facilities and 4.7% at five-star facilities. The findings show an association and do not by themselves prove that ratings caused the margin difference.
Why does CLA say shorter Medicare Advantage stays matter?
The report gives a median stay of 25 days for Medicare Advantage, compared with 41 days for traditional Medicare fee-for-service. Shorter stays can mean more frequent turnover and additional work managing admissions and authorizations.
What Medicaid changes does the report flag?
CLA identifies potential effects from the One Big Beautiful Bill Act on provider taxes, state-directed payments and eligibility redeterminations. The supplied report summary does not quantify the impact on individual states or facilities.
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