CMS Seeks Comments on Five-Star Rating System for Nursing Homes

30 June 2008 Publication
Author(s): Nathaniel M. Lacktman Shirley P. Morrigan Richard F. Seiden Lawrence W. Vernaglia

Legal News Alert: Health Care

On June 24, 2008, the Center for Medicare and Medicaid Services (CMS) began to solicit public comment on its proposed five-star rating system for nursing homes. Nearly 700 long-term care providers, consumer groups, and others participated in the CMS-sponsored “Open Door Forum,” a national conference call on the five-star rating system.

CMS will publish five-star ratings for nursing homes on the agency’s Nursing Home Compare website as of December 2008. According to Thomas Hamilton, Director of the Nursing Homes Survey and Certification Group at CMS, the purpose of the five-star system is to simplify nursing home quality information and make it available to consumers in an understandable format.

This five-star initiative is the latest in CMS’ ongoing efforts to develop consumer-friendly information on nursing home quality, i.e., the Nursing Home Compare Web site, which provides information on individual measures of quality of care, staffing; and survey inspection information. More recently, CMS began publishing a Special Focus Facility (SFF) designation for chronically underperforming nursing homes. Designed in part to highlight superior facilities, the five-star rating system is based on the research and analysis commissioned by CMS for the Nursing Home Value-Based Purchasing Demonstration project.

Nursing Home Compare now includes: (1) nursing home characteristics such as number of beds, type of ownership, and whether or not the nursing home participates in Medicare, Medicaid, or both; (2) quality measures such as percent of residents with pressure sores and percent of residents with urinary incontinence; (3) summary information from the most recent state inspection of the nursing home; and (4) staffing information on the number of registered nurses, licensed practical or vocational nurses, and nursing assistants in each nursing home.

The new five-star system will provide a composite nursing home quality of care rating of one to five stars, which will be calculated from existing data sources that are similar to, but not exactly consistent with, those presented on Nursing Home Compare. The health survey inspection component will be calculated using the prior three years’ survey data and will reflect findings on deficiencies and substantiated complaints. The quality of care component will be calculated based on a subset of the 19 quality of care measures on the Nursing Home Compare Web site, although CMS is still considering which indicators will comprise the subset. The nursing home staffing component will be based on the level of staffing at a facility and the number of hours and minutes per day of care per resident (nursing homes self-report staffing data during their annual on-site survey). CMS is considering methods to make a case-mix adjustment to the staffing information, and to develop systems for more accurate and frequent verification of staffing data based on payroll information. CMS will update the five-star ratings on a rolling basis to incorporate the findings of the most recent survey inspections, with changes posted at least quarterly.

In the Open Door Forum conference call, providers expressed their concerns about CMS’ use of compliance data to assess and report on quality. Providers cautioned CMS about using minimum license requirements as the criteria for superior quality ratings, particularly in the absence of more comprehensive information on the nursing homes’ program offerings or patient case-mix. Other issues raised were:

  • How CMS would address the inconsistency among states with respect to the health survey certification process
  • How CMS would incorporate more accurate data on average staffing patterns rather than a mere “snapshot” of staffing
  • How CMS would distinguish between provider-based and private nursing facilities.

Participants also questioned the validity of the rating system for small nursing homes and the lack of patient satisfaction information in the proposed quality rating system.

CMS will accept comments on the design of the proposed system prior to July 23, 2008. E-mails may be sent to the dedicated CMS e-mail box at

Legal News Alert is part of our ongoing commitment to providing up-to-the minute information about pressing concerns or industry issues affecting our health care clients and colleagues. If you have any questions about this alert or would like to discuss this topic further, please contact your Foley attorney or any of the following individuals: 

M. Leeann Habte
Los Angeles, California

Nathaniel M. Lacktman
Tampa, Florida

Shirley P. Morrigan
Los Angeles, California

Richard F. Seiden
Century City, California

Robert E. Slavkin
Orlando, Florida

Lawrence W. Vernaglia
Boston, Massachusetts