State Health Inspection Cut Point Levels. The How and the Why Part III

When I was a teenager, I was always very aware that I was not one of the “popular” kids. When you’re a 15 year old that can be very awkward. I didn’t understand it at the time. That’s just the way things were in the social order of junior high and high school. It didn’t matter how much I wanted to be popular. Even though deep inside we were the same people, there was nothing I could do about it. Think, “George McFly”. That was me.

In a previous post, we looked at cut point disparities between states and CMS regions. We established that CMS expects this for various reasons. The question of consistency is still puzzling. Why do the wide variations from region to region still exist? There are implications that reach beyond the fact that they do.

In our third and final post on this topic, we will explore the implications of this on star ratings.

CMS created the Five-Star Quality Rating System to help consumers, their families, and caregivers compare nursing homes more easily and to help identify areas about which you may want to ask questions.  The Nursing Home Care Compare web site features a quality rating system that gives each nursing home a rating of between 1 and 5 stars.  Nursing homes with 5 stars are considered to have much above average quality and nursing homes with 1 star are considered to have quality much below average.  There is one Overall 5-star rating for each nursing home, and separate ratings for health inspections, staffing and quality measures.

CMS – on the 5-Star webpage (emphasis added)

5-Star: The Basics

Here are the basics from the 5-Star User’s Guide.

  1. Start with the health inspection rating.
  2. Next, add one star to Step 1 if the staffing rating is four or five stars and greater than the health inspection rating; subtract one star if the staffing rating is one star. The overall rating cannot be more than five stars or less than one star.
  3. Add one star to the Step 2 result if the quality measure rating is five stars; subtract one star if the quality measure rating is one star. The overall rating cannot be more than five stars or less than one star.

Note: If the health inspection rating is one star, then the overall rating cannot increase by more than one star.

Seems simple enough. But in the current conversation, it is staffing that is in the spotlight. In the recent state of the union address, President Biden reiterated the administration’s commitment to, “…boost nursing home quality”, and in recent set of reform proposals made setting minimum staffing requirements a target.

Furthermore, for years, various government entities including CMS have pointed to a correlation between staffing levels and quality.

There is considerable evidence of a relationship between nursing home staffing levels and resident outcomes. The CMS Staffing Study, among other research, found a clear association between nurse staffing ratios and nursing home quality of care.

CMS – Five Star User’s Guide

Upcoming Changes

There are several initiatives that CMS will be introducing to further support their position. Starting in July, 2022, CMS will include staff turnover and weekend staffing measures into 5-star ratings.  More to come on just how that will work.

Additionally in the SNF PPS FY 2023 proposed rule, CMS indicated staffing will take on a much more important role related to payment. This is the first direct attempt that CMS has made to tie staffing to quality in a way that affects the facility rate directly.

Here’s what we currently know:

  • The Value Based Purchasing Program (VBP) reduces a facility’s Medicare A rate by 2% each year.
  • Facilities have incentive to reduce rehospitalizations to earn all or part of that 2% back.
  • CMS has the authority to add up to 9 additional measures to the current rehospitalization measure.

In the Proposed Rule, CMS may add a “Total Nursing Hours per Resident Day” staffing measure to the VBP program. This increases the difficulty to regain the lost 2%. CMS also requested comments on whether to include a measure on staff turnover in a future VBP year. Lastly, CMS is asking for feedback regarding mandatory minimum staffing levels. If you’d like to join in the discussion, go here.

As you can see, big changes may be coming and SNFs would feel the financial impact post-implementation.  Still, state health inspection cut point disparities continue to muddy the waters regarding 5 star ratings. Remember, the 5 star rating system is CMS’ primary public display of quality in nursing homes.


In our first post we reiterated what CMS has stated in the 5-Star User’s guide regarding consistency:

“Health inspections are based on federal regulations, which surveyors implement using national interpretive guidance and a federally specified survey process. Federal staff train state inspectors and oversee state performance. The federal oversight includes quality checks based on a 5 percent sample of the health inspections performed by states. In these sampled surveys, federal inspectors either accompany state inspectors or replicate the inspection within 60 days of the state and then compare results. These control systems attempt to improve consistency in the survey process.”

We made the point that health inspection cut point variations between states and regions indicate inconsistent survey practices.

Consider this: The payroll based journal (PBJ) consistently measures staffing across the country, and is a proxy for quality. Why then, does CMS allow for such a variation in the survey process?

An Example

Let’s apply the star rating rules cited above. In Washington state, a nursing facility can score a composite health inspection score of 45 points and be a 5-star facility. If that facility is a 1 star in staffing, they would remain a 4-star building. Without digging into the details, that facility represents very well on Care Compare, at an above average rating.

That same facility in Tennessee with 45 composite health inspection points would be a 2-star facility. If that facility has the same adjusted staffing rating of 1 star it would be a 1-star facility and represents much below average on Care Compare.

How is it equitable that a facility with one star in staffing in Washington remains a 4-star facility while that same facility in Tennessee is a 1-star facility? When the new VBP staffing measures are implemented, facilities across the country will be compared equally and receive VBP incentive based on consistent scoring mechanisms, even though staffing is not the only measure contributing to the VBP outcome. Not so with 5-star due to inconsistent state health inspection cut points.

Some argue this is a fair system, since, within states, facilities are measured against peers. I’m suggesting there is no other similar measurement to which SNFs are held accountable.  QRP and VBP all rely on national measurement standards and data outcomes. Is it unrealistic to expect health inspections be held to the same standard, as CMS intended?

Until they are, that lowly Tennessee facility will have to remain the “unpopular” below average facility, even though, deep inside, it is exactly the same as that 4 star “popular” facility in Washington State.