Discover why 2025 marks a turning point for skilled nursing facilities in the U.S. This article reveals how shifting demographics, new reimbursement challenges, and operational pressures are transforming the industry’s financial landscape.

Skilled nursing facilities (SNFs) have long been a cornerstone of the U.S. healthcare system, providing post-acute care, rehabilitation, and long-term support for some of the nation’s most vulnerable populations. Their financing needs are not new. What is new in 2025 is the way demographic demand, reimbursement dynamics, and operational challenges have converged, elevating the visibility of skilled nursing transactions in secured finance. 

For lenders, this does not signal an untapped growth sector. Instead, it highlights that skilled nursing is among the most complex industries to underwrite. Financing in this space requires years of healthcare fluency, a depth of operational understanding, and disciplined structures that few can execute effectively.

Converging Pressures in 2025
Several forces have shaped skilled nursing for decades, but their current intensity is reshaping the financial conversation:

Medicare Advantage penetration has reached a tipping point. In 2025, more than 54 percent of Medicare beneficiaries are enrolled in Medicare Advantage, according to the Kaiser Family Foundation. Payments for SNF care under these plans are typically about 25 percent lower than fee-for-service rates, based on analyses from MedPAC and Penn’s Leonard Davis Institute. Combined with more complex prior authorization requirements, this reimbursement gap is placing sustained pressure on facility margins.

Medicaid eligibility delays are compounding. Although federal law requires states to process applications within 45 to 90 days, in practice, many states take longer. Disability-related applications often exceed 110 days, according to the American Health Care Association/ National Center for Assisted Living (AHCA/NCAL). During this “Medicaid pending” period, facilities provide care without reimbursement, building receivable balances that can distort cash flow. Even a 10 percent Medicaid pending rate can represent hundreds of thousands of dollars in delayed revenue each month.

Operating costs remain elevated. Staffing shortages continue in many markets, driving reliance on contract labor. Wages have risen faster than reimbursement adjustments, eroding margins even as the Centers for Medicare & Medicaid Services announced a 4.2 percent increase in Medicare Part A payments for fiscal year 2025.

Managed care has further infiltrated state Medicaid programs, creating an environment of lower reimbursement rates, increased denials, stricter pre-authorization requirements, and extended payment timelines. AHCA/ NCAL reports that these trends are leading to higher days accounts receivable outstanding across much of the sector.

Each of these factors has long been familiar to SNF operators. What makes 2025 notable is the way they are occurring simultaneously, creating structural volatility that financing partners must evaluate with precision.

From Background to Visibility
SNFs are not new to secured finance. Receivables-backed facilities have supported operators for decades. But in 2025, more transactions are surfacing in portfolios and market conversations. This visibility is not because SNFs suddenly discovered secured lending, but because capital requirements are growing under the weight of reimbursement complexity and demographic demand.

Liquidity facilities are being sought to cover payroll and vendor costs as reimbursements stretch months beyond service delivery. Ownership transitions are creating interim financing needs during regulatory approval periods. Nonprofit and community-based operators, historically reliant on local support, are increasingly turning to private credit as reimbursement delays strain operating budgets.

The result is a steady flow of transactions that reflects systemic pressures, not opportunistic activity.

Receivables and the Reality of RCM
For secured lenders, the presence of receivables is not enough. In skilled nursing, the quality of collateral is inseparable from revenue cycle management (RCM). Denial trends, payer concentration, and eligibility processes determine whether receivables convert into cash or stall in administrative cycles.

• Denials are rising. The U.S. Office of Inspector General has reported that 13 percent of prior authorizations are improperly denied. Appeals succeed in more than 80 percent of cases, but only after weeks or months of delay.

• Payment-to-cost ratios are misaligned. MedPAC data shows that Medicaid reimburses SNFs at an average of $198 per diem, against an average cost of $253, covering just 82 percent of expenses.

• Payer concentration increases risk. In states where Medicaid managed care or Medicare Advantage dominates, operators may face reimbursement shortfalls across a majority of their census.

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