CMS Announces Changes to Five-Star Quality Rating System for Nursing Homes

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In Depth

On October 6, the Centers for Medicare and Medicaid Services (CMS) announced plans to expand and bolster Medicare’s Five-Star Quality Rating System (Five-Star System) for nursing homes, provided to the public on the Nursing Home Compare website. The rating system is a CMS online tool that offers information about the quality of care in the nearly 16,000 nursing homes that participate in Medicare or Medicaid.

The current Five-Star System relies upon data from:

  • Onsite Inspections Onsite inspections of nursing homes during the most recent three years by surveyors from state public health departments and CM
  • Quality Measures (QMs) Quality measures that rate each home compared to fixed benchmarks (e.g., prevalence of pressure ulcers, use of restraints, injurious falls)
  • Staffing Levels Self-reported data from the nursing homes on their level of staffing

Although widely used, the Five-Star System has suffered criticism that the information about staffing levels, and some of the QM data, derive from self-reported information from nursing homes that has been challenging to verify.

Beginning January 2015, CMS plans to initiate the following steps to improve reliability of the data used in the Five-Star System:

  • Nationwide Focused Survey Inspections Following a pilot in fiscal year (FY) 2014, CMS and individual states will implement survey inspections focused on verifying performance on resident assessments and the data set that is used in QMs for a sample of nursing homes nationwide. The inspections are intended to enhance verification of both the staffing and QM information that is part of the Five-Star Quality Rating System.
  • Payroll-based Staffing Reporting CMS will implement a system of quarterly electronic reporting that is auditable back to payrolls to verify staffing information. The system is intended to increase accuracy, improve data timeliness and allow for the calculation of QMs for staff turnover, retention, types of staffing and levels of different types of staffing. CMS expects that pilot testing will occur in FY 2015, with nationwide reporting by all nursing homes by the end of FY 2016. The funding for this program is provided by the Improving Medicare Post-Acute Care Transformation (IMPACT) Act of 2014, signed by President Obama on October 6, 2014. (The IMPACT Act, which was passed without change from the House Bill, was addressed in an On the Subject published September 24, 2014.)
  • Revised Scoring Methodology CMS will revise the scoring methodology used to calculate each facility’s Five-Star rating. The revised scoring methods will place more emphasis on data that is verified by independent sources, rather than data that is self-reported by nursing homes.
  • Additional Quality Measures CMS will increase both the number and type of QMs used at Nursing Home Compare. The first addition (effective January 2015) will measure the extent to which antipsychotic medications are in use.