College of Law > Academics > Centers, Institutes & Initiatives > Mary and Michael Jaharis Health Law Institute > e-Pulse Blog > CMS to Improve Nursing Home Five Star Rating System

CMS to Improve Nursing Home Five Star Rating System

On October 6, 2014, the Centers for Medicare & Medicaid Services (“CMS”) announced an initiative set to improve transparency and accountability in nursing homes.[i]  Commencing January 2015, CMS will make significant changes to the Nursing Home Five-Star Quality Rating System, which is the current system in place to “rate” nursing homes that receive Medicare funding.[ii]  This rating system was implemented by CMS in December of 2008 and applies in all fifty states and Washington, D.C.[iii] Each facility receives a certain number of stars in specific categories, including state health inspections, time nurses spend with patients, and the overall quality of medical care.[iv]  Five-star facilities are rated the best, while one-star facilities are said to be the worst.[v]  In addition to compelling nursing homes to strive for best care practice, the rating system was developed to aid consumers and their families in choosing a nursing home best suited for their needs.

The number of nursing homes with above-average ratings has risen steadily since the program began five years ago.[vi]  In 2009, 37% of nursing homes received four- or five-star ratings, a significant difference from 2013 where nearly half rated as above average in quality care.[vii]  However, critics of the rating system have claimed there is too much “self-reported, unverified data,” which has made the system unreliable.[viii]  For example, nursing homes with documented issues and deficiencies were earning top ratings, according to The New York Times last August.[ix] The article discussed Rosewood, a California nursing home that had the high-end touches of a “luxury hotel,” and had been given a five-star rating.[x] Despite the high rating, the nursing home was fined $100,000 for a resident’s death due to an overdose in 2006 and also received over one hundred complaints reported by consumers to the state between 2009 and 2013.[xi] The five-star rating fails to reflect fines, complaints, and state law enforcement actions against the facilities.[xii]

CMS plans to improve the accuracy of data to ensure that this rating system is more dependable for consumers.[xiii]  CMS will implement a nationwide focused survey inspection in states, which will allow more complete and accurate information regarding staffing and quality measures information.[xiv]  CMS will also begin using “payroll-based staffing reporting.”[xv]  Instead of allowing the facilities to enter information based on their own knowledge or records, CMS will use an electronic system to verify staffing information based on the facility’s payroll.[xvi]  This change has the potential to increase quality as the system will be able to measure turnover rates and types of staffing.[xvii]  In addition, more quality measures will be incorporated into the rating system, including measures concerning antipsychotic medications, re-hospitalization rates, and discharge rates.[xviii]  In order to ensure that the states provide the necessary information for the system in a timely and complete manner, there will be new regulations for submitting the information.[xix]  An improved scoring method will also be utilized to calculate each facility’s Five Star Quality rating.[xx]

CMS seems to be taking steps in the right direction to improve nursing home data collection and, hopefully, overall quality of care.  Transparency in these facilities is crucial for residents, families of potential residents, and research purposes.  Such changes have the potential to encourage more accurate data that truly reflects the nature of the facility.  “‘Nursing homes are working to improve their quality, and we are improving how we measure that quality,” said Patrick Conway, M.D., deputy administrator for innovation and quality and CMS chief medical officer.”[xxi]  “We believe the improvements we are making to the Five Star system will add confidence that the reported improvements are genuine, are sustained, and are benefitting residents.” [xxii] Nevertheless, only time will tell.

Meagan Pagels is currently a student at DePaul University College of Law in Chicago. Ms. Pagels attended Arizona State University where she completed her undergraduate degree in justice studies and sociology. She will complete her JD degree with an emphasis in health care law in 2016.


[i] Press Release: CMS Announces Two Medicare Quality Improvement Initiatives, Center for Medicare & Medicaid Services,,

[ii] Id.

[iii] Avery Comarow, FAQ: How We Rate Nursing Homes, U.S. News & World Report, Feb. 26, 2014,

[iv] Id.

[v] Five-Star Quality Rating System, Centers for Medicaid & Medicare Services, Certification/CertificationandComplianc/FSQRS.html.

[vi] Katie Thomas, Medicare Star Ratings Allow Nursing Homes to Game the System, N.Y. Times, Aug. 24, 2014,

[vii] Id.

[viii] Katie Thomas, Medicare Revises Nursing Home Rating System, N.Y. Times, Oct. 6, 2014,

[ix] Thomas, Medicare Star Ratings Allow Nursing Homes to Game the System, supra note 6.

[x] Id.

[xi] Id.

[xii] Id.

[xiii] Press Release: CMS Announces Two Medicare Quality Improvement Initiatives, supra note 4.

[xiv] Id.

[xv] Id.

[xvi] Id.

[xvii] Id.

[xviii] Id.

[xix] Press Release: CMS Announces Two Medicare Quality Improvement Initiatives, supra note 4.

[xx] Id.

[xxi] Id.

[xxii] Id.