How nursing homes may be gaming Medicare star ratings

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A five-star rating on CMS’s Nursing Home Compare website may not equate to “five-star service,” according to a Florida Atlantic University (FAU) study that found nursing homes’ scores may be artificially inflated.

The study, published in Production and Operations Management, examined data from more than 1,200 nursing homes in California for the first five years of the star ratings, beginning in 2008.

That rating is partially based on self-reported data about quality measures and staffing practices, such as how many hours registered nurses work per resident day. What FAU professor Xu Han and his coauthors found was little correlation between self-reported results and those collected by health inspectors. For example, the number of complaints received from residents was similar between nursing homes which were given similar scores on health inspections.

When comparing facilities which received the same overall star rating, however, the number of resident complaints varied significantly, suggesting nursing homes inflate their self-reported measures to mask poorer scores on inspections they don’t control.

“We were able to empirically demonstrate that inflation does exist in the current system," Han said in a press release. “So many nursing homes have a five-star rating; they look like they're luxury hotels, but it's difficult to see through that and determine what kind of service they're actually providing.”

Little direct correlation was founded between the self-reported measures and results from inspections “either contemporaneously or over time.” Han and his coauthors concluded that between 6 percent and 8.5 percent of facilities inflated their self-reported quality or patient staffing measures.

In the most recent U.S. News and World Report nursing home rankings, 15 percent of all facilities (2,285 total) that were evaluated achieved at least a 4.5 star rating on a 5-star scale. Those rankings were based on data from the CMS Nursing Home Compare site, while also factored in two additional quality measures.