Less Than 5% of Nursing Homes Receive Abuse Icon — But Financial Impacts Could Be Coming

As the federal government predicted, just under 5% of the nation’s nursing facilities received a new abuse warning icon on the consumer-facing Nursing Home Compare website — but the early data also reveals significant regional variations that could have an impact on valuations and bottom lines moving forward.

Out of 15,262 total facilities, just 760 received the controversial icon, according to a Thursday report from the Buffalo, N.Y.-based nursing home analytics firm StarPRO.

That works out to about 4.98% of properties listed on the site, matching the rough 5% figure cited by Centers for Medicare & Medicaid Services (CMS) administrator Seema Verma and nursing home division head Evan Shulman.

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But the icons, which feature an open palm on a red circle, aren’t necessarily spread out evenly across the country. Five states — Utah, New Jersey, New Hampshire, and both Dakotas — have no facilities with the icon at all, StarPRO found, while Michigan topped the list with 63 flagged properties.

Wyoming had the highest incidence of icons on a proportional basis, with seven out of 38 total properties — for a rate of 18.4%. Washington state came in second place with 34 icons out of 210 nursing homes, or 16.1%, while Michigan took third place at 14.2%.

Facilities earn the designation, which formally debuted Wednesday, if they received a citation for abuse that led to resident harm in the past year, or were cited for abuse that could have led to harm in each of the previous two years. Provider reaction to the plan has been harsh, with the American Health Care Association requesting that CMS change the image to something less reminiscent of a “do not proceed” warning, such as a yellow triangle.

The vast differences in abuse citations, and the resulting distribution of warning icons, highlights the inherent flaws in the current survey process, StarPRO managing director Colleen Muncy told SNN.

“Currently the star ratings state-by-state are graded on a curve, and I think in some ways, it just demonstrates how there’s not a standard survey process state to state,” Muncy said. “One thing that I’ve always been curious about is: Why would CMS allow a curved grade by state when it’s ultimately a federally run program?”

To CMS’s credit, the agency recently rolled out new guidelines for State Survey Agencies (SSAs), with the goal of bringing greater standardization to the nursing home inspection process. But until those efforts can bear fruit, state-level surveys will continue to have a significant effect on nursing homes’ star ratings — and, in turn, their overall financial footing, Muncy said.

“Do the surveyors understand the impact that they’re having on the star ratings at each of these homes?” she said. “And who’s training them to let them know how important what they find or cite is ultimately impacted in the public reporting?”

The connection between star ratings and financial success is well-documented, affecting factors as diverse as referral partnerships and ease of obtaining Department of Housing and Urban Development (HUD) financing. The new abuse icon, according to Muncy, could eventually serve a similar purpose, as investors and hospitals take the notification into account when choosing potential skilled nursing partners.

“If they refer less patients, less of the better referrals, then that’s going to have an impact on revenue, so I think it’s a very harsh symbol,” she said. “When you have a new operator who takes over, they’re going to have to live with that symbol.”

Muncy also predicted that more icons may be coming to Nursing Home Compare as CMS continues its push toward greater transparency around care quality and neglect.

“CMS’s angle is to help consumers make better decisions — and the truth of the matter is, Nursing Home Compare is so complicated, I do think they’re going to have to use more icons to help consumers sort through all the data,” she said.

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