The Growing Importance of Nursing Home 5-Star Ratings and How They are Impacted by Survey Findings

Background

The Centers for Medicare & Medicaid Services (CMS) created the 5-Star Quality Rating System to help consumers, families and caregivers compare nursing homes more easily and to help them decide which facilities to consider. The Nursing Home Compare website features a system that gives each nursing home a rating between 1 and 5 stars. Nursing homes 5-star ratings have much above-average quality and those with 1-star have quality much below-average.

Under this system, there is one overall 5-star rating for each nursing home made up of separate ratings for:

1. Health Inspections – The health inspection rating contains information from the last 3 years of on-site inspections, standard surveys, and any complaint surveys.
2. Staffing – The staffing rating has information about the number of average care hours provided to each resident everyday by nursing staff.
3. Quality Measures (QMs) – The QM measure rating has information on 16 different physical and clinical measures for nursing home residents.

Growing Importance of Nursing Home 5-Star Ratings

Receiving a better than average 5-star rating has never been more important to nursing homes. These ratings are increasingly used by consumers, regulators, insurers and other payers and provider networks to select which facilities they will consider having relationships with. The ratings are also often a first stop for lenders and investors, who consult them to decide whether a nursing home is a safe investment.

• Consumers: The CMS rating system gives patients, residents and family members a broad overview of how they assess nursing homes for quality. This helps these individuals to make informed decisions on which nursing homes to consider for needed services.
• Regulators: A nursing homes’ star rating could affect their ability to obtain New York State Certificate of Need (CON) approval for facility renovations, restructurings or sales/purchases. CON applicants’ 5-star ratings are now reviewed for this purpose.
• Providers and practitioners: When nurses and doctors discharge patients from hospitals, they often use the ratings in referral decisions. Some Performing Provider Systems – the large provider networks operating throughout the State and New York’s vision for delivery system reform – are also relying on the ratings to select their network partners.
• Insurers: Insurers consider these ratings when setting up their service networks. Several Medicaid plans will not include nursing homes with less than 3-star ratings in their networks. Taken together, these insurers control – or will soon control – the majority of nursing home revenues.
• Nursing Home Quality Initiative: New York’s Medicaid program annually reduces nursing home reimbursement by $50 million. It is re-distributed to nursing homes based on measures of compliance, quality and avoidable hospital use. The 5-star Health Inspections rating and other elements of the rating system are used to determine distributions under this program.
• Accountable Care Organizations (ACOs): Beginning in 2017, CMS will allow waivers of the required 3-day hospital stay before Medicare will pay for skilled nursing facility (SNF) care for enrollees in certain Medicare ACOs. The waiver requires that patients go to nursing homes with at least 3-star ratings. An ACO is a network of providers that seeks to reduce the
  total cost of care and meet quality targets for an assigned population of patients.
• Medicare Episodic Payments: CMS offers waivers of the required 3-day hospital stay for Medicare SNF coverage in certain “bundled” and episodic payment arrangements. To qualify for the waiver, the majority of the SNF partners in the arrangement must have a quality rating of at least 3 stars. These payment arrangements – some of which are mandatory – encourage hospitals, doctors, SNFs and other providers to coordinate and reduce the cost of care received by patients across an episode of care, such as heart bypass surgery or a hip replacement.
• Lenders and investors: The U.S. Department of Housing and Urban Development (HUD) an important nursing home lender. They now use star ratings as a component of its risk assessment. Several other lenders and institutional investors include 5-star ratings on their underwriting checklists.

In summary, nursing homes may not even be able to obtain sufficient referrals or receive Medicare and Medicaid funding in the future if they do not have at least a 3-star rating.

Survey Findings and 5-Star Ratings

Nursing homes certified by Medicare and/or Medicaid have to meet over 180 regulatory standards intended to protect residents. State inspection reports inform the Health Inspections component of the 5-star rating. These provide information on nursing home deficiencies identified during annual surveys, including the number (“scope”) and severity of problems, revisits needed to document correction of deficiencies and actions taken by nursing homes to investigate complaints.

CMS gives greater weight to deficiencies that cause “immediate jeopardy to resident health or safety” when determining each home’s score. This is particularly when the infractions are widespread and not isolated incidents. CMS totals the points for facility revisits and scope and severity for each of the previous three years. After applying weighting factors, the Health Inspections score is determined. The current year counts the most and less weight applies to the prior two years’ results.

To reflect variation among states in surveys, the Health Inspections score reflects the ranked performance of facilities in each state. Accordingly, 5-star ratings go to nursing homes scoring in the top 10 percent, and 1-star ratings are assigned to the 20 percent that scored the lowest. The remaining 70 percent of facilities evenly receive 2, 3, and 4 stars. The Health Inspections score is the foundation for the 5-star rating, counting for over half of the overall rating. To arrive at the overall 5-star rating, the Health Inspections rating adjusts upward for a 4 or 5-star Staffing rating or a 5-star QM rating, or downward for a 1-star rating in either Staffing or QMs.

To Summarize

Survey inspection results can have a major effect on nursing home 5-star ratings. A facility may receive a high-level deficiency for an isolated incident or accumulate several low-level deficiencies in a survey. 5-star ratings can have a profound effect on the facility’s referrals, business relationships and finances for up to three years.

GreenField Health & Rehabilitation Center in Lancaster has a Five-Star rating from CMS for quality care. GreenField Health & Rehabilitation Center is a part of The GreenFields Continuing Care Community, also located in Lancaster. The GreenFields provides for the physical, social, and spiritual needs of their residents in a Christian environment. In addition, The GreenFields offers a variety of living arrangements and support levels based on individual needs. This includes independent living apartments in GreenField Manor; assisted living apartments in GreenField Court; and memory care and enhanced assisted living in GreenField Terrace.

For more information about GreenField Health & Rehabilitation Center or The GreenFields Continuing Care Community, visit thegreenfields.org.

Source: https://view.joomag.com/adviser-summer-2017-annual-conference-recap/0794982001499959148?short