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Seeing Stars: How improving your skilled nursing ratings can affect your bottom-line

By Laura Franco, VP/Director of Health Care Services at Life Care Services


In the world of health care, stars carry a lot of weight. Created in 2008, the Centers for Medicare and Medicaid Services (CMS) Five-Star Rating System was originally designed to help seniors and their families in the selection of skilled nursing providers. Today, that star power is rising. Ratings are now used in creating post-acute care partnerships – pipelines for residents coming to communities for skilled care or rehab. Ratings also influence payment methods and, therefore, the bottom-line for a community. The challenge for many senior living communities is that ratings are calculated quarterly, and there are changes and updates to the scoring measures used to determine CMS Five-Star ratings.

Recent Updates You Should Know

This July, the latest ratings for health centers reflected the most recent changes. Those updates included:

  • CMS added six new Quality Measures (QMs), five of which are now used in scores, although they won’t carry full weight in determining skilled nursing ratings until January 2017.
  • The new QMs primarily focus on outcomes of short-stay rehabilitation residents – whether they return to a hospital, make an ER visit, or successfully return to a community.
  • Other new QMs focus on conditions of residents and whether mobility/function improved or declined, as well as the use of anti-anxiety or hypnotic medications (although this measure currently isn’t factored into the ratings score).

This slideshow provides more details on the new measures. Some health centers have seen star ratings go up this summer, while others have gone down, due to the changes and not being prepared for them. Ultimately, the changes are designed to reduce hospital returns, especially unnecessary re-hospitalizations, which result in costly Medicare reimbursement penalties.

Driving Factors for Change

The landscape for health centers is rapidly changing. There’s much greater focus on value over volume, increased care coordination among all providers and data transparency. This is good business and good for consumers. Medicare payment models are also expected to change (and shrink) in the next few years with continued reform.

A Health Services Playbook

With the squeeze on skilled nursing operations, Life Care Services, An LCS® Company has a dedicated internal team of nurses in our Health Services Division who make regular visits to communities managed by Life Care Services. With the ‘playbook’ on the CMS rating system, the clinical team monitors all measures and develops an action plan to help staff improve care, specific QMs and overall CMS Five-Star rating scores.

Of course, staffing ratios and health inspections are the other two main components of the CMS star ratings. We’re seeing an increased demand for our team of mock surveyors to conduct mock health inspections. Mitigating risk and writing plans to correct potential deficiencies is more important than ever. Health centers want to be prepared, so when state inspectors DO come for the annual survey, it’s as natural as going through a fire drill in elementary school.


Key Takeaways

  • Pay attention to Quality Measures and where you rank on a monthly basis.
  • If you’re not five-star rated, be able to communicate why to stakeholders and what you’re doing to improve ratings.
  • The star ratings are more than a consumer tool. They’re essential to developing partnerships with hospitals, generating referrals and gaining payment methods. Important benchmark: Having 3 stars or more is crucial.

Nationwide, skilled nursing occupancy has slowly climbed since December 2015. It’s important to stay focused on profitable strategies and the increasing prevalence of short-stay rehabilitation.

See how we work with communities to improve health center operations or learn about our array of tools to help guide your community to greater success.

About Laura Franco:

Laura joined the organization in 2001 and has served in numerous regulatory, compliance and quality assurance positions for Life Care Services. She earned a bachelor’s degree from Northern Illinois University. Laura manages the day-to-day operations of the Health Care Division. Her leadership directly influences all aspects of care the residents receive at any community managed by Life Care Services.