Understanding Recent Changes to SNF Five-Star Ratings: What Hospitals Need to Know

This is the first post in our two-part series on the SNF Five-Star Rating program, which experienced a major overhaul this month. In Part 1 below, we will help hospitals, health systems, and ACOs interpret the resulting drop in SNF ratings. In Part 2, we will explain potential drawbacks to using the star ratings as the foremost measure of quality and present some alternative means of assessing potential SNF partners for inclusion in preferred networks.

As a result of changes to the SNF Five-Star Rating program that CMS implemented on April 24, 36.83% percent of SNFs lost one or more overall stars this month. To anyone tracking SNF ratings on the Nursing Home Compare website, it may look like the care provided at these facilities has experienced a significant drop in quality. But these statistics do not paint a complete picture. In fact, the majority of publicly reported quality measures suggest consistent improvement in quality over time in the SNF industry. The recent drop in ratings is actually due to CMS raising the bar for the industry by making it harder for SNFs to attain five-star ratings.

Changes to the Survey and Staffing Domains

The changes to these domains should be understood by all hospitals that use the star ratings to assess SNF partners, because they certainly impact a facility’s overall rating. Ironically, however, the survey and staffing domains do not contain the measures that matter most to hospitals. The measures that are most relevant to hospitals are actually part of the quality domain, which we will discuss in greater detail below.

Survey Domain: CMS has lifted the “survey freeze” it put in place in November of 2017 when it rolled out a new survey process and is including citations received under that process in this month’s rating. Having this more recent data should make the rating a more useful measure of quality, but because CMS grades the survey domain on a curve, the same number of providers gained or lost stars as last month.

Staffing Domain: CMS has increased the number of staffing hours per resident per day (HPRD) required for each level of stars. For example, to receive a five-star RN staffing rating in April, a provider needed to have an adjusted RN HPRD greater than or equal to 1.042, while in March that same rating could be achieved with an adjusted RN HPRD greater than or equal to .884. As a result, 33.65% of providers lost one or more staffing stars.

Changes to the Quality Domain

The quality domain includes the measures that matter most to hospitals as they seek to assess SNFs for inclusion in their preferred networks. It has also arguably undergone the most impactful changes in the program. In addition to the comprehensive quality rating, Nursing Home Compare now also displays two new quality ratings, one based on short-stay patients and one based on long-stay patients. This separation will prove useful to hospitals that are primarily concerned with the short-stay population. They can simply pay less attention to the long-stay measure, or even exclude it from their consideration.

Similar to the staffing domain, there has also been a shift in measurement in the quality domain. CMS has changed the thresholds for what constitutes a “good” score for each of the 17 quality measures included in the rating. As a result of these higher standards, 48.24% of the industry lost one or more quality stars this month, which takes the average quality star down from 4.0 to 3.4. The SNF industry continues to have the most room for improvement on the measures that have the greatest impact for hospitals building post-acute networks—namely 30-day readmissions, successful discharge to the community, and ED visits. These measures require SNFs to track patients outside of their care settings, which is still a new practice for the majority of these providers. Ironically, due to the program’s structure, the measures have relatively minimal impact on a facility’s overall star rating.

What to Make of April Performance Data

In conclusion, although 36.83% of providers lost an overall star in April, this was not due to a true dip in quality, but rather to the nature of the changes CMS implemented. Instead of automatically excluding SNFs that lost a star in April from their networks, hospitals may want to adjust their expectations to align with the program changes. Using April’s ratings as a new baseline, they can observe their SNF partners’ performance over the next few months and then reassess. Some hospitals may want to reconsider the practice of using star ratings to determine network inclusion altogether. We’ll explore this option further in Part 2 of our mini-series on the SNF Five-Star Rating program.

Looking for a more precise way to assess SNF partners? Check out our Insight product, designed to help hospitals measure post-acute outcomes.