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By weCare Staffing on June 03, 2022

SNFs at Financial Risk in 2022: Is Your Facility in Trouble?

It’s a frightening time for Skilled Nursing Facility (SNF) operators, given the financial risks on the horizon in 2022. Between Medicare and PHE funding cuts and SNF-specific challenges, many SNFs are expected to shut down. For this reason, operators of SNFs must stay abreast of what’s happening in the industry. This article will tell you why SNFs are at extremely high financial risk this year and fill you in on how to prepare. 

A Third of SNFs are at Great Financial Risk

SNFs have been at financial risk for years due mainly to high staff turnover, inflation, low occupancy, and insufficient funding from government entities. These are formidable issues that have led to the closure of more than a dozen SNFs this year. But newer issues threaten to close nearly 400 more facilities by the end of the year - let’s look at these problems in detail below: 

Looming Reduction in Government Funding

The PHE government funding introduced and distributed to SNFs in response to the COVID pandemic could be phased out in 2022. If that happens, the most vulnerable SNFs will be scrambling for capital. It is predicted that the PHE funding will end in July 2022, though there’s a chance that it could be extended. 

Medicare Funding Cuts

Medicare payment reform is yet another issue that could throw SNFs for a financial loop. In mid-2021, the final rule was released by the Centers for Medicare and Medicaid Services. Included in it were many updates to Medicare payments and policies. Reduced Medicare funding will significantly affect skilled nursing facilities’ bottom line. 

Other Issues Impacting SNFs

When you consider the fact that SNFs are already dealing with the following issues at varying severities, the grim picture becomes even clearer: 

  • An unstable workforce - Nurses continue to leave their positions in droves, which puts enormous pressure on SNFs. They must either pay an excessive amount to hire more nurses or attempt to function with limited staff. According to a survey by Incredible Health, more than a third of nurses plan to leave their jobs by the end of 2022.
  • Low Medicare reimbursement - In general, Medicaid reimbursement is meager, so profit margins are slim. This makes providing adequate care to residents an extreme challenge. It also doesn’t help that the number of residents who have non-Medicare health coverage is low and declining. 
  • Declining target market - SNFs’ potential resident pool is drying up, making it harder to fill beds. And residents that facilities are able to secure are becoming increasingly difficult to treat. 


These issues and others combine to form a substantial threat against SNFs. 

SNF Relative Risk of Closure 

Though all SNFs are at some risk of financial hardship, several factors increase the probability of a particular facility closing. By the end of this section, you’ll know if your facility is at an elevated risk of financial ruin. 

Your Facility is Small

Smaller facilities (those with less than 100 beds) are in a potentially precarious spot, given that they often have limited resources and are more sensitive to negative circumstances. Of course, this doesn’t mean that all small facilities will close by the end of 2022, but a facility’s small size could put it at increased risk. 

Many of Your Residents Have Medicaid

Medicaid is known for its minute reimbursement rates. If a substantial number of your residents rely on Medicaid, your facility is definitely at risk. 


With all of these obstacles stacked against SNFs, it’s natural to wonder just how to stay afloat. There is no recipe for success that will work for every facility, but here are some tips that may be helpful for management personnel: 

  1. Stay abreast of SNF-related news in your area by browsing resources like your local government website and reputable skilled nursing news outlets like Skilled Nursing News and Healthcare Finance News. The more you know, the better equipped your facility will be to adapt to any changes. 
  2. Keep enough staff on hand. With so many nurses quitting at the drop of a dime, SNFs that don’t have an alternate nurse staffing plan are at a disadvantage. So, get in good with a reputable nurse staffing company to ensure that gaps in staffing won’t result in costly mistakes. 
  3. Ensure that your facility complies with regulations that apply to SNFs.


We hope this article has been helpful to you, having enlightened you on financial threats to be on the lookout for. With that information, you can better prepare for the changes to come.



Published by weCare Staffing June 3, 2022