New Medicare Law Funds Changes In Nursing Home Quality Rating System

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By Nathaniel Weixel

Oct. 6 — The Centers for Medicare & Medicaid Services announced sweeping changes to the nursing home five-star rating system, some of which will be funded by a post-acute care reform bill President Obama signed into law Oct. 6.

The Improving Medicare Post-Acute Care Transformation Act (IMPACT Act; H.R. 4994) will require providers to submit standardized data by 2019 to allow Medicare to compare quality across different post-acute care settings. Lawmakers have said the information would be used to alter the post-acute payment system via a new site-neutral or bundled payment system or other changes.

Post-acute care includes long-term care hospitals, inpatient rehabilitation facilities, skilled nursing facilities and home health agencies.

The Senate passed the bipartisan bill Sept. 18 by unanimous consent (25 MCR 1184, 9/26/14). The House approved it Sept. 16 (25 MCR 1160, 9/19/14).

According to CMS officials, the IMPACT Act also provides funding for the quarterly electronic submission of nursing home staffing information that is tied to payroll data, which is one of the sources of data used to rank nursing home quality on the Nursing Home Compare website.

Previously, this information was self-reported, which raised the risk of some nursing homes “gaming the system” and provided uneven quality information, CMS officials said during an Oct. 6 briefing.

Phase-in of the electronic system will begin Jan. 1, 2015, and the new data and rankings will be available to consumers in 2016, officials said.

“This new system will increase accuracy, improve the timeliness of the data, and allow for the calculation of quality measures for staff turnover, retention, types of staffing, and levels of different types of staffing,” the CMS said. The data may also help nursing homes improve staffing and quality of care, the agency said.

Five-Star Ratings

The CMS said it will also increase both the number and type of quality measures used in the five-star rating system. The first additional measure, starting January 2015, will be the extent to which antipsychotic medications are in use. Future additional measures will include claims-based data on re-hospitalization and community discharge rates, the agency said.

The CMS unveiled the five-star rating system for nursing homes in December 2008, saying it was designed to make information on the Nursing Home Compare website more meaningful and user-friendly for consumers (19 MCR 1401, 12/19/08).

The five-star rating system is based on data from three sources: annual health inspections, quality measures reported by nursing homes, and staffing information reported by nursing homes. Top nursing homes are rated as four- or five-star facilities, while the poorest-performing homes are rated as low as one star.

Although onsite inspections form the core of the rating system, the CMS said it has been concerned that the quality measures and information about staffing levels rely on self-reported data from nursing homes that have been difficult to verify.

“We are focused on using as many tools as are available to promote quality improvement and better outcomes for Medicare beneficiaries,” CMS Administrator Marilyn Tavenner said in a statement. “Whether it is the regulations that guide provider practices or the information we provide directly to consumers, our primary goal is improving outcomes.”

Oversight Questioned

Questions have been raised in the past about the validity of quality rankings that come from self-reported measures. In August, Rep. Elijah E. Cummings (D-Md.), ranking member on the House Committee on Oversight and Government Reform, sent a letter to the CMS, accusing the agency of failing to properly administer the rating system (25 MCR 1094, 8/29/14).

The letter said some nursing homes “are improperly inflating their staffing levels prior to self-reporting, and then cutting back on staff soon after inspections occur.” Cummings addressed several other concerns about the rating system in his letter, including improperly self-reported quality measures and inflated staffing levels.

In an Oct. 6 statement, Cummings commended the CMS for “making the Nursing Home Compare website more transparent and less reliant on quality measures reported by nursing homes themselves. I am hopeful that the new ratings system will give Americans more reliable information about the quality of our nation's nursing homes in order to make informed decisions for themselves and their loved ones.”

State Surveys

In FY 2014, the CMS piloted special surveys of nursing homes to enable better verification of staffing and quality measures. A CMS official Oct. 6 said the surveys were effective, so the agency and states will implement these focused survey inspections for a sample of nursing homes nationwide.

Commenting on the ratings changes, Greg Crist, senior vice president of public affairs at the American Health Care Association, said in a statement to Bloomberg BNA that “many of the recommendations align with our quality work already underway, and we will work with the Administration to ensure the executive order is implemented in a smart yet speedy manner.

“What the President offered today is a call for increased accuracy. We've seen the improvements in quality across the board,” Crist said. “Some questioned that a few weeks ago. Yet this push for greater accuracy should help reassure patients and families those improvements are both real and making a difference in improving lives.”

To contact the reporter on this story: Nathaniel Weixel in Washington at

To contact the editor responsible for this story: Brian Broderick at

The law is at

A CMS fact sheet of Nursing Home Compare changes is at


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