Quality by the Numbers: Understanding the Five-Star Rating System Changes

Quality by the Numbers: What the changes to the Five-Star Rating System means to your organization.

By Jayne Warwick, RN, HBScN
Solutions Specialist, Marketing



What recently changed in the Five-Star Rating system?

On February 20, 2015 the Centers for Medicare and Medicaid (CMS) changed the way it calculates the Five-Star Rating System for all facilities serving Medicare and Medicaid residents across the US.i In summary, two new Quality Measures were added for psychotropic treatment– the thresholds for Quality Measure (QM) scoring were changed to raise performance expectations, and the staffing algorithm was adjusted to award four stars only to those who achieved a score of four in either or both of the Registered Nursing (RN)  and Overall Staffing measures.  Previously, homes that scored three in both measures were awarded four stars.  The overall Five-Star Rating and Survey components were not altered with this new system, but the change to the scoring system had an immediate effect – more than one-third of all homes in the US saw a decline in their Five-Star Rating overnight.  Care models, staffing models, and the quality of care didn’t change – but the change in the math painted a negative picture for many organizations.

Though the survey process and health inspections themselves remained the same, the changes did include expansion of the targeted survey pilot to a nationwide program.  CMS describes the targeted surveys as, “specialized onsite surveys of a sample of nursing homes across the US that assess the adequacy of resident assessments and the accuracy of information reported to CMS that is used in calculating quality measures used in the rating system.”ii The intent is to look for patterns of inaccuracies in MDS assessment documentation and data collection, which will be reported to the CMS regional office and central office for follow-up.  However during these visits, if care concerns or citations related to quality of care, and or if life and nursing services are identified, they can be referred to the state agency. 

How is the Five-Star Rating calculated?

The Five-Star Rating looks at three components: onsite health inspections or surveys by the state, Quality Measures derived from the MDS assessment, and staffing levels either reported on the 671/672 reports or submitted through payroll. 

The health inspection component carries the heaviest weight in determining the overall score.iii  The inspection measure examines survey data along with revisits to address deficiencies, then bases a score on this information.  The score is weighted by the type of deficiencies, and number of revisits surveyors must complete until they feel the facility has addressed the deficiencies.   

The facility star rating is based on a comparison to other homes in the state.  Facilities are awarded stars as follows:

 Five-Star – top 10 percent of homes (those with the best inspections in the state)

 Four-Star – next lower 23.33 percent

 Three-Star – next lower 23.33 percent

 Two-Star – next lower 23.33 percent

 One-Star – lowest 20 percent (those homes with the worst inspections in the state)

This is the starting point for the overall calculation.  If you score five stars on the survey portion, you are a Five-Star home.  If you score four or less on the health inspection section, the staffing and quality measures sections can boost that score.  If you end up with one star in the health inspection area, then at most you can add one star from either, but not both, of the quality measure and staffing scores.

The staffing measure looks at staffing data for the year.  The information may be pulled from payroll data, or from completion of the 671 and 672 forms.  Homes report on RN, LPN/LVN, and CNA/CMT hours.  The RN hours and overall hours are used in the algorithm.  One star is added for homes where the staffing component is four or five stars, and more than the health inspection score.  Homes scoring  one star in staffing will have one star subtracted from their health inspection score. 

The staffing star rating is calculated by looking at daily RN hours per resident and the total daily nursing hours per resident. Using an established matrix, five stars can only be attained if you score five in both RN hours and total hours.  The lower the provision of hours as compared to the expected, the lower the star rating will be.

Figure 1  Staffing Points and Rating (Updated February, 2015), page 10 Design for Nursing Home Compare Five-Star Quality Rating System: Technical Users’ Guide.

The Quality Measures rating is based upon the values of 11 of the 18 Quality Measures calculated from MDS assessments submitted to the state.  Two-thirds of homes will experience a decline in their Quality Measure score as a result of the recalculation, and change in cut points or thresholds for each star rating.  If a home scores five stars in the Quality Measures, they can add one star to the overall score.  If the Quality Measure score is one star, a star is subtracted from the overall score.

The revised star cut points for the MDS Quality Measure Summary Score are as follows:

 760 – 1,100

 690 – 759

 630 – 689

 545 – 629

 225 – 544

Overall scores cannot be less than one or more than five stars.

What is the effect on long-term care (LTC)?

Overnight, almost 40 percent of four and five-star homes experienced a decrease in their rating. More than one-third of all homes saw a decline in their score.iv   As an industry, the perception of quality changed, while in reality nothing changed at the home level.  Care carried on as it always had, staffing patterns didn’t become worse, and the information submitted on MDS to calculate the measures didn’t suddenly change to paint a worse picture of care.  The standards changed.  Interpretation changed.  Facilities didn’t change. 

However, there is an impact.  Some of the new payment model initiatives require homes have a three, four or five-star rating to participate.v   Overnight, some homes lost their qualification.  Accountable care organizations (ACO’s) may choose to set star rating parameters on skilled nursing facility (SNF) membership.  Referral sources often use the Five-Star Rating when choosing a discharge location.  There will be some fallout, and homes must be prepared to respond to negative perceptions.  Have your story ready. 

What should I be saying to my referral sources?

If you are losing referral partners due to the change, schedule meetings to address their concerns.  You know nothing changed at the facility overnight.  You are still the same referral partner you were before the recalculation, and need to state that clearly. However, prior to that meeting, understand how you arrived at your current  rating. 

The following questions need to be answered so that you are prepared:

  1. If your score dropped, understand why it dropped. Was it the recalculation of the thresholds on the QMs and addition of the new ones, and or the staffing measure, or both?  Be prepared to explain how the only thing that changed about your facility was the math.  

  Use historical data from the Nursing Home Compare website to demonstrate.

  1. Do you have a written plan to focus on improvement in any or all areas? (note: these are excellent opportunities for QAPI activities in the home with measureable changes)

  Demonstrating opportunities for improvement with “SMART” (specific, measurable, achievable, realistic, timely) goals and planned activities goes a long way to instill confidence in your referral partners. 

  1. Are you submitting clear and accurate information to the state?

  Payroll information reflects how much staff members are paid–not necessarily the time they put in.  Nurses often clock out and continue their documentation before going home.  Are you truly capturing hours spent providing resident care?

  Are you auditing MDS information to evaluate the accuracy of Quality Measures?   Are your assessments coded correctly for fields used in Quality Measure calculations?  What type of training have your MDS staff received to monitor these values?

Don’t forget, your families are a referral source.  Families can be your best spokespeople.  We know there’s no more powerful advertising than word-of-mouth messaging.  Help families understand recent changes and how these affect your Five-Star Rating.  Although the Nursing Home Compare website and Five-Star Ratings shouldn’t be the only source of information families use to determine the quality of a home, it is often weighted heavily in the decision making process.  Arm your spokespeople with the right message.  Make sure they understand–nothing has changed but the math.

All that changed is the math.

Skilled nursing is no stranger to the challenges resulting from payment changes, managed care, IMPACT, ACA, and the never-ending regulatory changes. The changes to the Five-Star Rating was a kick when some were already down.  Make sure you have the information needed to educate those who have an impact on your world.  Turn this into a QAPI opportunity and formulate a plan.  Communicate with partners and educate them on the facts.  Your organization’s care quality hasn’t changed.  All that changed is the math.

Upcoming Webinar – Quality by the Numbers

If the changes in the Five-Star Rating system have impacted you, don't miss this important webinar.

Learn more about the changes, what these mean to your organization, and some immediate actions you can take to bring your rating back up.

Bonus: Register and receive template letters to share with families and staff to help them understand the changes.

Join us on May 27 @2:00pm ET. Reserve your space now.

About the author

Jayne Warwick is an RN with almost 30 years of experience in LTC in both US and Canada and has been a floor nurse, DON, Corporate Clinical Consultant, Director of Quality and Director of Operations for both small and large LTC chains. Over the past ten years with PointClickCare, Jayne has worked with homes throughout North America to effectively improve business operations and quality of care, while optimizing reimbursements through the implementation and use of electronic health records (EHRs). Jayne has extensive industry and regulatory knowledge for initiatives such as EHR, vendor certification, MDS 3.0 and QAPI. Jayne is now the Solutions Specialist for the PointClickCare marketing team and a steadfast champion for PointClickCare customers.



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