Survey Delays Drag Down Nursing Home 5-Star Ratings, Create Legal, Financial Pitfalls

While it’s widely understood that the 5-Star ratings for nursing homes don’t always accurately reflect the true performance of a facility in real time, or even in a timely manner, less attention has been given to the financial and legal headaches the rating system has created for both providers and consumers alike.

The complexities that underpin the 5-Star rating system have to do with the process of data collection, analysis, and implementation as well as inspection survey backlogs due to shortage of surveyors. The whole process is fraught with pitfalls, causing nursing homes with low ratings to be denied refinancing loans and incur revenue loss from occupancy declines.

This situation can also cause facilities to be unfairly excluded from participation in preferred networks for the federal government’s incentive programs, which may gate keep based on a facility’s star rating.


All in all, an out-of-date rating may linger for months on end, industry experts told Skilled Nursing News.

At the heart of the problem are two kinds of delays, those stemming from survey delays and those related to the unavoidable delay between data submission and its reflection in the star ratings, according to industry expert Steven Littlehale, chief innovation officer at Zimmet Healthcare Services Group.

By design, there’s a six-month gap – or two quarters – between when a facility submits data to the Centers for Medicare & Medicaid Services (CMS) and the time it’s integrated into the star ratings.


“So there’s the concept of an expected delay in when a facility is filling out data on the minimum data set, and the PBJ files. And [even as] they’re submitting them on schedule to CMS – no one’s late, no delays – but the operational processing of these data sets results in six months between when a facility submits data to when that data is reflected in the star ratings,” said Littlehale.

On the flip side is another kind of delay that is directly attributed to survey delays. Due to these delays, some facilities have surveys from six years ago that are still being counted in the 5-Star ratings. Despite the nursing facility having made tremendous investments in quality improvement, or even under new ownership, these dated ratings impact the facility’s ability to refinance, he said.  

And so, the unintended delay, though intrinsic to the system, can have far-reaching consequences, Littlehale said.

In lawsuits, for instance, attorneys often cite star ratings as evidence of a facility’s quality of care at the time of an incident. However, what they fail to consider is the lag between the incident and the data reflected in the ratings. This discrepancy can significantly impact the outcome of legal proceedings, painting an inaccurate picture of a facility’s performance.

“What happens in court is that oftentimes the plaintiff’s attorneys will say, ‘Here’s the star rating that coincides with the date of the incident.’ And, I always have to explain that if you want to talk about staffing, or clinical outcomes at the time of the incident, you have to go forward six months, or basically two quarters, in the MDS assessment and PBJ data that reflects back to that period of the incident,” Littlehale explained.

In the meantime, if a facility undergoes a change in ownership and subsequently improves its operations, despite the positive changes, the outdated survey data continues to haunt them, influencing their eligibility for preferred networks and financial opportunities, Littlehale said.

Moreover, there is regional variation in the timing of the surveys.

“I looked at average survey intervals between the most recent survey in the last survey and it varies widely by state, and then even within the state, it varies widely,” he said. “The problem is that if a facility has had a negative survey in the past, and they’re not getting a chance to refresh that survey data, that old survey, that incident that may have happened three or four years ago, is still being reflected in the most recent survey.”

A low rating due to a past citation, already corrected will be reflected on the rating and work against the facility.

“So it comes up in the courtroom, where they’ll say, in the facility survey rating is one and I’ll have to explain, that while that’s true, there hasn’t been a surveyor in the building in over 24 months … The facility had no opportunity to clean their record, to get a new independent assessment in – and that’s very unfortunate,” Littlehale said.

Indeed, being denied financing, or being excluded from such preferred networks in value-based programs due to a subpar star rating can deal a heavy blow to a facility’s bottom line, further exacerbating the financial strain caused by regulatory delays.

Meanwhile, survey backlogs can generally compound problems related to federal and state reimbursement, according to Tina Sandri, CEO of Forest Hills of DC, who also serves on the Board of Governors for the American Health Care Association (AHCA), 

“Surveyors right now are spending a disproportionate amount of time, compared to pre-COVID, doing complaint surveys. And that is taking away from their time to do regular surveys. So, they are also dealing with a staffing shortage the same way we are dealing with staffing shortages, which is why people aren’t getting their surveys on time,” Sandri told SNN. “That can impact financing if you’re on Medicare-Medicaid funding and your funding gets held back because your surveys aren’t really done on time. That impacts [the facility’s] cash flow and ability to provide services.”

Solutions to avoid 5-Star rating headaches

Sandri’s solution to avoid survey backlogs – and related 5-Star issues – is to have more certified professionals to assess quality per facility than is currently the norm.

“As a provider, I really think that if we could broaden the accessibility of certifications and training for [quality certified professionals], particularly with a focus on complaints and customer service, we could essentially get the low hanging fruit of quality issues right,” Sandri said. 

Moreover, conducting peer-based surveys is a proactive approach to avoiding citations later and keeping quality consistent, according to Robert Hurlbut, president of Hurlbut Care Communities, which operates 11 facilities in the New York area.

“We do the peer reviews where our administrators act like New York State Health Department officials, and they go in twice a year to do [an informal] survey. And, if they find something wrong, they write it up. But it’s not [seen as] punitive,” Hurlbut told SNN. 

A peer review is simply a preemptive move and it’s internal to the organization, with administrators and department heads from across housekeeping and laundry to dietary and nursing, weighing in and helping fix issues within 30 days, he explained.

“It works,” said Hurlbut, who said that he has not only avoided citations in his facilities, but a pleasant side benefit has been less turnover among his staff leaders and nursing home administrators.

“We’ve got administrators that have been with me for 15 to 20 years,” he said.

That said, while quality isn’t compromised and facilities remain in good standing with surveys, even this solution doesn’t guarantee profits, however.

“I have like three edicts: Take care of the residents and staff, have really good surveys for the state health department, and then make money – [money] is dead last,” Hurlbut said.

Need for systemic change

At the end of the day, Littlehale emphasized the need for systemic changes to address these issues. From a policy perspective, stakeholders must work together to decouple survey outcomes from programs like the Five-Star Quality Rating System when delays render them unreliable, he said. 

Moreover, he urges facilities to leverage data-driven approaches to tell their story—to lenders, referral sources, and regulatory bodies. By showcasing their clinical outcomes, staffing ratios, and the impact of regulatory delays, facilities can advocate for fair treatment and mitigate the financial repercussions of outdated star ratings.

“The biggest offense is that consumers are being encouraged to use the 5-Star system to make placement decisions and monitor care. Yet, it’s woefully out of date,” Littlehale said. “No one desires this. Residents, families, and providers alike want to use current and accurate data to make key decisions.”

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