The Growing Influence of Five-Star Quality Ratings in LTPAC

August 29, 2019 Lynne Jackson

Staffing ratings diminish Five-Star Quality Ratings for many LTPAC providers, who don’t strictly adhere to Payroll-Based Journal reporting requirements.

In long-term and post-acute care (LTPAC), Five-Star Quality Ratings make or break a facility’s reputation.

Why? Because:

  • Residents and families use Five-Star Quality Ratings as a guide when choosing facilities.
  • Medicare bases per resident reimbursements on the Five-Star Ratings. 
  • Investors rely on Five-Star Quality Ratings to gauge investment viability.

In addition, recent government studies claim a LTPAC facility’s market share rises or falls when Five-Star Quality Ratings change.

Understand the history

Following Congressional complaints, the Centers for Medicare & Medicaid Services (CMS) started rating long-term care facilities in 2007 to help consumers sort through the options.  

CMS started publishing quality ratings on its Nursing Home Compare website for each nursing home that participates in Medicare or Medicaid. The system presents Quality Ratings of one to five stars for each facility based on performance in three key areas. Each area is awarded its own Five-Star Rating. Nursing homes with Five Stars are considered above average quality and those with One Star are considered below average. To learn more, watch Perspective on PBJ — Hear It from CMS and Other Experts.

In addition to serving as a primary measurement tool in the Nursing Home Compare, Five-Star Quality Ratings have evolved into a gauge for financial viability.

Recognize the financial implications of Five-Star Ratings

The financial impact of Five Star Quality Ratings cannot be overstated. Facilities often suffer an immediate loss when their ratings dip.

“A nursing home that receives three stars in an on-site inspection may only expect a $10.44 profit from treating one patient for one day. However, if it gains two additional stars after self-reporting and achieves an overall rating of five stars, its expected profit increases to $16.88,”according to the Brookings Institute.

Meanwhile, consumers, physicians, and lenders flock to facilities with the highest ratings.

  • Medical professionals make referrals based on Five-Star Ratings.
  • The U.S. Department of Housing and Urban Development (HUD) use the ratings  to assess risk when making lending decisions.
  • Banks and institutional investors include Five-Star Ratings on their underwriting checklists.
  • Insurance companies use the ratings when designing policies.
  • Select Medicare plans will not cover facilities with fewer than three stars per Leading Age.  

Consequently, LTPAC facilities’ bottom line rises and falls with their ratings. The National Institute of Health reports the market share of one-star facilities fell 8 percent while the market share for five-star facilities climbed 6 percent.

Learn how Five-Star Ratings are calculated  

The CMS bases a facility’s Five-Star Rating on three measures: Inspections, Staffing, & Quality. An onsite health inspection kicks off the rating process. CMS sets the initial rating based on this inspection and requires facilities self-report quality and staffing measures. Facilities must follow Payroll-Based Journal guidelines to report staffing history. Five-Star Ratings can change every quarter based on submitted reports, audits, and inspections.

Currently, about 10 percent of nursing homes receive coveted five stars while 20 percent receive one star and the remaining 70 percent are allocated two, three, and four stars in equal proportions, according to Leading Age. 

How to use Payroll-Based Journal Reporting and Analytics to Boost Ratings  

75% of nursing homes don’t comply with required levels of nursing staff, which jeopardizes quality care

Providers need Payroll-Based Journal software that integrates with real-time scheduling and attendance systems so they can stay abreast of changing staffing dynamics as well as generate compliant reports. In addition to an integrated view of live, past, and future schedules, they need alerts that identify when they will fall out of compliance in time to make changes.

The government routinely updates regulations. Providers must confirm their software providers continually update their systems and train users on evolving Payroll-Based Journal requirements well before quarterly deadlines. For example, CMS recently changed how LTPAC facilities must report meal breaks, requiring they attribute a 30-minute break for each 8-hour shift for every employee and contractor (salaried and hourly) whether they take the full break or not. The Payroll-Based Journal system must also use payroll records to confirm the validity of their reports and meal breaks. Watch Payroll-Based Journal Meal Break Policy Update to learn more.

Even the best Payroll-Based Journal software cannot ensure compliance if LTPAC facilities fail to properly schedule and enforce CMS staffing requirements, which happens to thousands of facilities every week. A July 2019 study by Harvard and Vanderbilt University researchers reports that 75 percent of nursing homes do not fully comply with the required level of nursing staff, which jeopardizes quality of patient care.

“One troubling aspect of our findings is that 75% of nursing homes were almost never in compliance with what CMS expected their RN staffing level to be, based on residents’ acuity,” wrote Fangli Geng, David Stevenson, and David Grabowski in Daily Nursing Home Staffing Levels Highly Variable, Often Below CMS Expectations for HealthAffairs.

CMS requires LTAC facilities to keep a registered nurse (RN) onsite 8 hours a day, every day. Many LTAC met this requirement during the week but failed to demonstrate weekend compliance. In the study of 15,000 long-term and post-acute care facilities “96% had an RN onsite for at least eight hours a day, 80% of the year on weekdays. On weekends, 91% of long-term care facilities met this requirement less than 60% of the time.”

In addition to compromising quality of care, this noncompliance forces the Payroll-Based Journal staffing ratings to drag down the overall Five-Star Ratings.

CMS calculates RN and total nurse staffing ratings individually and assigns five-star staffing ratings to facilities who earn a Five Star Quality Rating in both RN coverage and total staffing or a five-star staffing rating in RN coverage and a four-star rating in total staffing. Software like, SmartLinx Payroll-Based Journal system, helps you identify days with zero RN hours on demand.

The nursing shortage and employee turnover rates, which exceed 50 percent, make complying with strict RN nursing requirements even more problematic. Experts are promoting creative strategies to combat turnover. You can learn about key strategies in Understanding staffing shortages eBook


Fix Payroll-Based Journal Reporting problems

Payroll Based Journal reporting errors also damage staffing ratings for many facilities. Creating compliant Payroll-Based Journal reports can be labor-intensive and error-prone. Fortunately, the right tools can simplify reporting and demonstrate compliance quickly. Read how Greek American Rehabilitation and Care Centre refuted a compliance allegation in moments.

Still complying with CMS strict staffing requirements can seem impossible when navigating fluctuating PPD census values and sudden scheduling changes. Facilities can no longer rely on standard scheduling procedures. They must track multiple scheduling variables, close gaps and share data between Payroll-Based Journal, scheduling, attendance, payroll, and employee communication systems—in real-time.  

Using integrated workforce management technology can quickly identify and close scheduling gaps by:

  • Alerting schedulers of open shifts and those qualified to fill them.
  • Notifying employees of open shifts and enabling them to sign up, anywhere, anytime.
  • Preventing scheduling gaps by allowing employees to access schedules, swap shifts, and adjust time off in near real-time from mobile devices and PCs.

Predict Five-Star Ratings to get ahead of PBJ requirements

To maximize your Five-Star Quality Rating, you need to predict your rating early in the quarter and identify issues that will damage your score. Then you can adjust schedules, close gaps, and create back up processes for these issues and similar problems that will likely occur. The right technology can proactively predict your staffing ratings and help you improve it long before the deadline.

SmartLinx Five-Star Predictor enables you to evaluate for your staffing rating based on Payroll-Based Journal reporting long before the CMS submission deadline. The tool aggregates hourly staffing data in the Payroll-Based Journal, attendance, and employee scheduling systems and factors in CMS calculation criteria and evolving requirements. The Five-Star Predictor automatically rates each facility in real-time. You can also designate a specific time period to review and predict the corresponding staffing rating, such as a quarter or month. The Predictor will also display warnings when any facility’s staffing is poised to jeopardize your desired rating. The system uses current and historical data to calculate the star rating and identify options for improving staffing to achieve the desired star rating. You’ll be able to:

  • Analyze future schedules
  • See where and when you’ll  need additional nursing staff
  • Identify the amount of missed coverage that will cause your rating to drop.

To learn more, watch 7 Secrets to Payroll-Based Journal Success.

Future implications

The focus on Five-Star Quality Ratings will continue growing as will the demand for long-term and senior care. According to the U.S. Census Bureau, the percentage of Americans living in nursing homes increases as people age. Nursing homes house about 5 percent of people 65 and older, 24 percent of older demographics, and 50 percent of people over 95.

Today, about two million Americans call a long-term care facility home. As life expectancy continues to rise, so will the number of nursing home residents. The U.S. Census Bureau projects the number of Americans 65 and older to nearly double from 52 million to 95 million by 2060. Of the 78 million baby boomers today, 3.9 million are expected to need long-term or post-acute care over the next several years.

For LTPAC providers, demonstrating quality care and compliance will remain a top key performance indicator. Integrated Payroll-Based Journal technology and on-demand business analytics will empower providers with the knowledge they need—in real-time—to predict and obtain their desired Five-Star Ratings and the ability to proactively remediate obstacles.

Learn how to reach for Five Stars to achieve a stellar reputation, full reimbursements, and high quality of care.

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