Nursing home operators may be in for a rude awakening Wednesday, when an update to the 5-Star Quality Rating System, requiring more points for ratings, goes into effect.
That’s because the Centers for Medicare and Medicaid Services (CMS) is increasing quality measure thresholds by one-half of the average improvement in QM scores.
While thresholds to assign star ratings increased, the point thresholds for individual QMs haven’t changed, according to the American Health Care Association and National Center for Assisted Living (AHCA/NCAL). That means some facilities might need higher overall QM performance to maintain the same star rating.
“That distinction is critical,” Steven Littlehale, Chief Innovation Officer at Zimmet Healthcare Services Group, told Skilled Nursing News. “As a result, some facilities may lose a QM star despite delivering essentially the same measured performance. This reflects a recalibration of expectations rather than a deterioration in quality.”
Holly Norelli, vice president of quality and regulatory services for AHCA/NCAL, said the complicated methodology is emblematic of a larger issue with the 5-Star rating system – it fails to give consumers a full picture of nursing home quality.
“We continue to encourage CMS to improve 5-Star so it is balanced, transparent and comprehensive,” Norelli said in a statement to SNN. “It’s time to find a better way, so that residents and families can make more informed decisions.”
The change aligns with CMS’ long-standing philosophy that 5-Star ratings should represent continuous improvement rather than a static benchmark, Littlehale said.
“More broadly, this reflects CMS’ increasing emphasis on dynamic benchmarking. Providers should no longer assume today’s cut points will remain tomorrow’s standards,” said Littlehale.
Public reporting, referral relationships and financing discussions can absolutely be impacted by 5-star changes, Littlehale said. Instead of managing for today’s cut point, Littlehale suggests operators “manage above it.”
Below are the new QM thresholds as of Wednesday:
Methodology changes and public perception
But operators need to be aware of a change in perception from consumers, hospitals, lenders and managed care organizations because of lower star ratings, even if the change is driven by methodology rather than worse care, he said.
“Providers should proactively communicate methodology-driven rating changes to families, boards, referral partners, lenders and investors,” said Littlehale. “A lower QM or overall 5-Star rating does not necessarily indicate declining care — it may simply reflect a higher national standard.”
Another concern with threshold updates is predictability, Littlehale said. Methodology is transparent, but CMS could improve communication by publishing the expected provider impact alongside recalibration.
Stakeholders, including consumers, need to understand whether changes reflect actual performance or are only reflective of higher national benchmarks, added Littlehale.
Currently, nursing homes can earn points across nine long-term care quality measures and six short-stay care measures which add up to give nursing homes their star rating.
In April 2019, the agency announced an end to the freeze on five-star calculation, to resume a traditional method of updating health inspection scores about every six months. But operators haven’t seen a meaningful change until this month.
“CMS’ latest technical update underscores that star rating thresholds can change, even when the underlying quality measure scoring for individual measures remains the same,” Norelli said.
What’s different about July?
Average improvement was determined by data submitted between January 2025 and April 2026.
Littlehale said that facilities marginally above a prior cut point in star rating change may not fall below it, even if their performance didn’t change.
“One additional nuance is often overlooked: the greatest downstream impact occurs at the extremes,” said Littlehale. “A facility dropping from 5 QM stars to 4 loses eligibility for the one-star upward adjustment to its overall 5-Star Rating. A facility dropping from 2 QM stars to 1 may receive a 1-star reduction in its Overall 5-Star Rating.”
It’s crucial that operators know exactly how many QM points separate them from the next star rating threshold and build performance margin to absorb recalibrations in the future, Littlehale said.
“You don’t want to be in the basement of any star measure. Give yourself some wiggle room,” Littlehale noted.
Companies featured in this article:
AHCA/NCAL, American Health Care Association, Centers for Medicare & Medicaid Services, CMS, Zimmet Healthcare Services Group
