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Study: New Standards Change Nursing Home Grades

By Georgina Gustin, CQ Roll Call

May 14, 2015 -- Government-certified nursing homes don't appear to be performing as well as in the past, according to data analyzed with revised standards.

A report released last week by the nonpartisan Henry J. Kaiser Family Foundation found that only 45 percent of the country's Medicare- and Medicaid-certified nursing homes got a four- or five-star rating, the highest ratings on the five-point scale developed by the Centers for Medicare and Medicaid Services (CMS). That represents a drop from 54 in December, before the agency changed its methodology in response to complaints that scores were inflated and based on self-reported data.

The analysis found that more than 36 percent of all nursing homes scored only one or two stars.

"With relatively large shares of nursing homes in the four- and five-star rating group, questions arose as to consumers' ability to assess the relative performance among nursing homes in their area," the report says. To address those concerns, CMS reformulated its system by increasing the number of points necessary to earn a high-quality star rating and by changing the calculation for staffing.

The Kaiser analysis also found that for-profit nursing homes, which represent 70 percent of all certified facilities, generally had lower ratings, and smaller facilities have higher star ratings than larger ones. The report also said that ratings are higher for measures that are self-reported, such as quality measures and staffing levels, than from those stemming from state inspections.

The Omnibus Budget Reconciliation Act of 1987 (PL 100-203) required nursing homes that receive Medicare or Medicaid funding to meet minimum standards. In 1998 CMS established the Nursing Home Compare system to give consumers information on facilities, and in 2008 established the more user-friendly star rating system.

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