How Nursing Homes Can Leverage MDS, PBJ, Other Facility Data to Protect Against Litigation, Lending Issues

In recent years, nursing homes have faced increased scrutiny and litigation, often driven by data that can be misunderstood or misrepresented. To secure themselves, nursing homes must leverage a data strategy, ensuring accurate documentation and clear communication of their data story to legal experts and stakeholders.

This approach can mitigate risks, clarify misunderstandings, and showcase the quality of care provided, experts said during a webinar on how to avoid facility data-related troubles.

For instance, one of the critical challenges nursing homes face is explaining Payroll-Based Journal (PBJ) data. PBJ data tracks staffing levels and is used in CMS’s Five-Star Quality Rating System. However, this data is complex and often misunderstood even by experts. Legal professionals and courts can misinterpret PBJ data without proper context, leading to unfavorable outcomes for nursing homes in litigation.


Legal and clinical experts shared several examples from real life situations to illustrate how nursing homes can establish good data storytelling based on sound documentation practices in order to avert legal crises.

“How you can be the master of your data profile … really begins with making sure that data has integrity, that your minimum data set [MDS] is accurate and it’s reliable,” said Steven Littlehale, chief innovation officer at Zimmet Healthcare Services Group. And beyond that, documenting reliably, possessing knowledge of what Littlehale called “subject matter expertise” is also a key way to create a true and current picture of a facility.

“Make sure that the data is connected, that it’s really telling a very important, accurate story completely, and that you’re not just focusing on one specific data field, but [that] you’re telling a great story,” Littlehale said. “Adding the subject matter expertise to legal challenges [means] to really help people understand that the data isn’t supposed to line up.”


Rather, delays in survey inspection data, discrepancies in pressure ulcer documentation, incomplete accounting for complexities related to case mix and staffing are common concerns at facilities that are well performing. And yet, these are just some examples of what can be overlooked in a facility’s data story and perhaps lead to an appearance of fault in legal and financial proceedings.

In discussing these examples, Littlehale was joined by Drew Graham, Attorney at Hall Booth Smith, and used several case studies to illustrate how nursing home operators can successfully stage challenges to their reputation by using good data storytelling.

In constructing an accurate profile, these experts noted that operators should also keep in mind that defense lawyers will sometimes need the facility to do its due diligence in making sure that the data is complete.

“The MDS change process requires that … you’re open and clear about why you made the change,” Graham said. “Retrospective reading of MDS by plaintiff and defense lawyers – well intentioned – is very, very difficult for us to get a grasp on, on what it all means. So be patient with us.”

Refinancing challenges and case mix adjustments

The first operator chosen as an example by Littlehale had faced difficulties when attempting to refinance due to poor public data scores. This operator carried a portfolio of nine nursing homes, including one Special Focus Facility (SFF) and two SFF candidates, and despite a significant $7 million increase in the nursing spending and overall improvement in clinical outcomes, the 5-star rating did not reflect these changes. Ultimately, the issue lay in the case mix adjustment: while there was an increase in patient acuity – a reflection of the operator’s post-acquisition strategy – the case mix adjusted hours per resident per day did not show a significant increase, Littlehale explained.

Upon closer analysis, it was evident that the facilities were delivering satisfactory clinical outcomes, although the data wasn’t reflecting the operator’s higher acuity levels. By presenting this context to underwriters, the nursing home operators secured refinancing. The key takeaway was the importance of contextualizing data to reflect true performance and quality improvements accurately, Littlehale said.

“When you looked at the case mix adjusted hours, there wasn’t that [connection of dots] of hours per resident per day to account for acuity,” said Littlehale.

And yet, because of the higher acuity, agency utilization and the cost of labor was much higher than it had been in the past.

“They really weren’t putting those pieces together when they were trying to tell their story. So despite all that, what we discovered was that this facility was really delivering satisfactory clinical outcomes,” Littlehale explained. “When all was said and done, we were really finding that they had the beginning of a decent survey, that the downward trends that they were seeing in the marketplace were actually [causing it to go] from a five-star to a four-star — and not going down to a one-star.”

Transparency in pressure ulcer reporting

In Maryland, a three-star facility confronting litigation over pressure ulcers was another example Littlehale shared to show how such data can be easily misconstrued. Despite the plaintiff’s claims of poor staffing and terrible outcomes, deeper data analysis showed the facility actually had lower pressure ulcer rates than both state and national averages. Moreover, the facility had become well known for its effective treatment of complicated wounds, leading to higher admissions of patients with pressure ulcers – the very trend that was being misused as evidence against the facility in court.

The case highlighted the importance of transparency and accuracy in MDS submissions, Littlehale said. So, even if multiple corrections are made to an MDS, being clear and honest about the changes can prevent issues in litigation. By thoroughly documenting the reasons for any changes and ensuring accurate data representation, this facility was able to defend its quality of care effectively.

Addressing allegations of fraudulent documentation

Other legal issues such as allegations of fraudulent documentation can sometimes arise from situations that don’t have regulatory language to define the condition, experts said. Here too, detailed documentation – and a bit of empathy for the resident – can go a long way in averting legal troubles, Littlehale said.

In one such case, Littlehale recalled that a resident’s pressure ulcer was initially misclassified, leading to accusations of intentional data manipulation. However, further investigation revealed that the ulcer had progressed to an unstageable state, which was not reflected in the quality measures at the time.

The facility ended up demonstrating that its data was accurate and aligned with the standards of the period. This case, yet again, underscored the necessity of having comprehensive narrative documentation to explain any changes in wound classification and treatment, Littlehale noted. And so, ensuring data integrity and contextual accuracy is ultimately crucial in defending against fraudulent documentation claims as well, he said.

By adopting these strategies, nursing home operators can better protect themselves from litigation, ensuring their data tells an accurate and defensible story. This proactive approach not only aids in legal defenses and when obtaining financing, but also enhances overall care quality and operational efficiency, the experts said.

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