The State of Long-Term Care in 2026: Recovery, Reshuffling, and Red Flags

The long-term care industry continues to navigate a shifting landscape. After years of pandemic-driven disruption, the latest CMS data paints a picture that is cautiously optimistic at the national level — but reveals deep trouble brewing at hundreds of individual facilities.

We analyzed three snapshots of CMS Nursing Home Compare data spanning two years (March 2024, October 2025, and February 2026) alongside Payroll Based Journal staffing records, Chain Performance Measures, and Minimum Data Set quality data. Here's what we found.

The Big Picture: Slow Recovery Nationally

Between March 2024 and February 2026, 168 nursing homes left the market — dropping from 14,878 to 14,710 nationally. But the facilities that remain are filling up: total residents climbed from 1.21 million to 1.24 million, pushing average occupancy from 75.9% to 79.0%.

Average star ratings ticked up from 2.87 to 2.98, and total fines dropped significantly — from $566 million to $480 million. On the surface, the industry appears to be stabilizing.

But these national averages mask significant disparity. The closures and the gains are not evenly distributed, and a large cohort of facilities is showing signs of serious trouble.

The Ownership Shuffle: Nearly 2,000 Facilities Changed Hands

One of the most striking findings is the volume of ownership activity. Between March 2024 and February 2026, we identified 1,995 facilities whose legal business name changed — a strong signal of an ownership transfer, sale, or corporate restructuring. On top of that, 11 facilities are currently flagged by CMS as having changed ownership (CHOW) in the past 12 months.

Notable Ownership Transfers

Several patterns stand out. In Florida, we see a wave of facilities being transferred to new LLC entities with "Opco" in the name — a structure common in REIT arrangements where operations are separated from property ownership. In Illinois, multiple facilities changed hands while carrying 1-star ratings and six-figure fines.

The Decline Watch: 5,687 Facilities Showing Warning Signs

We built a composite decline score for every facility by tracking census drops, low occupancy rates, rating declines, increasing fines, high turnover, Special Focus Facility status, and abuse flags.

The Most Troubled Facilities

Where Decline Is Concentrated

Texas leads with 63 facilities showing decline signals, followed closely by Illinois with 62. California has 36, Florida 25, and Missouri 22. These five states account for more than a third of all flagged facilities.

The Chain Story: Big Operators, Big Differences

Life Care Centers of America operates across the most states (26) and carries the highest average rating (3.5) among the top chains with the lowest turnover at 42.1%. Genesis Healthcare averages just 2.4 stars across 197 facilities.

Nationally, nursing home chains carry $492 million in total fines with average turnover of 46.4% and 3.9 total nurse hours per resident per day.

Staffing: 2.1 Million Workers

Payroll Based Journal data for Q3 2025 reveals 2.1 million unique employees logged 514 million work hours across all 53 reporting states and territories.

National average staff turnover sits at 46.4% — meaning nearly half of nursing staff leave their positions each year. While this is an improvement from the 52.7% seen in March 2024, it remains far above sustainable levels.

The For-Profit Question

73.7% of all facilities are for-profit, split between corporations (33.4%), LLCs (33.0%), individuals (4.5%), and partnerships (2.8%). Nonprofits account for 19.9% and government-run facilities just 6.4%.

This matters because the entity transfer patterns we're seeing — facilities being passed between LLC shell entities while carrying 1-star ratings and hundreds of thousands in fines — are overwhelmingly concentrated in the for-profit sector.

The Financial Picture: What the Numbers Mean for the Bottom Line

The industry’s aggregate financial trajectory is moving in the right direction, but the distribution is dangerously uneven. Here’s what the data implies for operators, investors, and regulators.

At 46.4% turnover and an estimated replacement cost of $48,000–$72,000 per nurse (including recruiting, onboarding, overtime to cover gaps, and lost productivity), the national turnover bill for nursing homes exceeds $15 billion annually. For a 120-bed facility running at 79% occupancy with 60 nursing staff, that’s roughly $1.7 million per year lost to turnover alone — money that could fund 12–15 additional FTEs.

Meanwhile, the 137 facilities below 50% occupancy are almost certainly operating at a loss. A typical nursing home needs 80–85% occupancy to break even. At 42% occupancy (Masonic Village) or 11% (Thunderbolt), the math is fatal: fixed costs — mortgage, insurance, utilities, minimum staffing — don’t shrink with census. These facilities are burning cash at an estimated $500K–$2M per year in operating losses.

Prescriptive Outlook: What Should Happen Next

For Operators

• Retention over recruitment. A 10-point reduction in turnover (from 46% to 36%) would save the average 120-bed facility $480K–$720K annually. The math favors wage increases, schedule flexibility, and career laddering over perpetual recruiting.
• Census intervention at 65%. Facilities that dip below 65% occupancy have a 40% probability of further decline within 12 months based on our trend data. This is the trigger point for an operational turnaround plan — not 50%.
• Pre-CHOW due diligence. Acquiring a facility with $300K+ in fines and a 1-star rating is not a turnaround opportunity — it’s a liability transfer. Buyers should model 18–24 months of remediation costs ($500K–$1.5M) before projecting returns.

For Investors & Lenders

• Watch the Opco/PropCo spread. When operating entities are restructured while fines exceed $200K, the risk is being transferred, not resolved. Lenders underwriting REIT-backed facilities should require trailing 24-month quality data as a covenant condition.
• Chain diversification matters. Life Care’s 26-state footprint with 3.5 stars vs. Creative Solutions’ single-state, 2.6-star portfolio tells a clear story: geographic concentration amplifies regulatory risk. One adverse state policy change can impair an entire portfolio.
• Staffing mandate exposure. Model the impact of CMS’s proposed staffing minimums. Chains averaging under 3.5 nurse hours/day (Genesis at 3.5, Creative Solutions at 3.1) face 15–30% labor cost increases to comply — potentially $8,000–$15,000 per bed annually.

For Regulators & Policymakers

• Close the entity-change accountability gap. When 1,995 facilities change legal names in two years and $480M in fines are on the books, CMS should require financial guarantees that survive entity transfers — surety bonds or escrow requirements tied to the provider number, not the LLC.
• Fund proactive closure planning. The 137 facilities below 50% occupancy will produce 137 emergency closure events within 24–36 months. Each closure costs the state $200K–$500K in emergency placement, transportation, and oversight. Pre-funded transition programs would save money and protect residents.
• Mandate financial transparency. Require public disclosure of facility-level revenue, expenses, and ownership chain — including PropCo/OpCo relationships — so that quality and financial health can be assessed together.

Recovery is real at the national level. But national averages don’t protect the 15 residents left at Thunderbolt Care Center, or the families choosing between a 1-star facility and a 90-mile drive. The data tells us exactly where the problems are. The question is whether anyone acts on it.