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Some nursing homes gaming system to improve Medicare star ratings

Patients, physicians and payers rely heavily on these overall ratings, which have climbed higher as self-reported scores have trended upward.

Jeff Lagasse, Associate Editor

For families faced with the difficult decision of placing a loved one in a nursing home, a government rating system is often the only source of information to determine which facilities are the best. 

But a new study of nursing homes in California, the nation's largest system, by faculty at Florida Atlantic University and the University of Connecticut found that some nursing homes inflate their self-assessment reporting to improve their score in the Five-Star Quality Rating System employed by Medicare to help consumers.

The five-star rating system that Medicare uses to compare nursing homes is made up of three components: employing a base score from an objective, on-site inspection, along with two scores from information on staffing and quality reported by the facility. Patients, physicians and payers rely heavily on these overall ratings, which have climbed higher as self-reported scores have trended upward.

The study investigated whether these rating improvements reflected actual quality gains or unjustified ratings inflation. Among the findings were that nursing homes that have more to gain financially from higher ratings are more likely to improve their overall rating through self-reporting.

Little direct correlation exists between self-reported measures and on-site inspection results, either contemporaneously or over time, the results showed. The number of resident complaints was similar for nursing homes with the same inspection rating but varied noticeably between facilities with the same overall rating, which suggests inflation in self-reported measures. And at least 6 percent of the nursing homes inflated those self-reported measures, which include quality measures on patient health, as well as staffing numbers.

By showing that there is a manageable number of facilities that are likely inflators and identifying key predictors of being an inflator, the researchers said the findings can help Medicare focus its future audits more strategically and improve its inspection process and ratings system.

The study uses data from 2009 to 2013, the first five years after the rating system was implemented in 2008. The researchers examined data from more than 1,200 nursing homes in California, the largest system in the U.S., including the facilities' star ratings and other characteristics from Medicare files and information on facility finances and resident complaints from other databases maintained by the state.

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