Understanding CMS Quality Measures: How Nursing Homes Earn 5-Star Ratings

Introduction

Choosing a nursing home is one of the most important decisions families and caregivers make. To support informed choices, the Centers for Medicare & Medicaid Services (CMS) developed the Five-Star Quality Rating System—a trusted tool used nationwide to evaluate nursing home quality, staffing levels, and resident outcomes.

If you’ve ever searched for “how nursing homes are rated,” “what CMS star ratings mean,” or “how to improve nursing home quality measures,” this guide breaks it all down in a clear, practical way.

What the CMS Star Rating Measures

The CMS Five-Star Rating System evaluates nursing homes across three core domains:

1. Health Inspections

The foundation of a facility’s overall rating. State surveyors assess compliance with federal regulations through routine inspections and complaint investigations—making this a critical driver of nursing home compliance and regulatory performance.

2. Staffing Levels

Measures total nursing hours per resident, including Registered Nurse (RN) staffing. These metrics are adjusted based on resident acuity, helping reflect adequate staffing in nursing homes—a key factor in quality care.

3. Quality Measures (QM)

Quality Measures evaluate clinical outcomes and resident care quality, including:

• Mobility and functional improvement
• Pressure injuries (bedsores)
• Hospital readmissions (rehospitalizations)
• Fall rates and safety indicators

Together, these domains provide a standardized, data-driven view of nursing home performance used by families, providers, and healthcare organizations alike.

How CMS Calculates the Overall Star Rating

The CMS star rating follows a structured three-step methodology:

Step 1: Start with the Health Inspection Rating

This serves as the base score and carries the most weight in determining overall performance.

Step 2: Adjust for Staffing

• 5-star staffing → +1 star
• 1-star staffing → −1 star
• 2–4 stars → no change

Step 3: Adjust for Quality Measures

• 5-star QM rating → +1 star
• 1-star QM rating → −1 star

Important: If a facility receives a 1-star health inspection rating, the overall rating cannot increase by more than one star—regardless of staffing or quality performance.

Real-World Examples of CMS Star Ratings

Example 1: Nursing Home ABC

• Health Inspection: 2 stars
• Staffing: 4 stars (no adjustment)
• Quality Measures: 2 stars (no adjustment)

Overall Rating: 2 stars
In this case, mid-range staffing and quality scores do not impact the base rating.

Example 2: Nursing Home DEF

• Health Inspection: 4 stars
• Staffing: 4 stars
• Quality Measures: 5 stars → +1 star

Overall Rating: 5 stars
Strong performance in quality measures elevates the facility to a top-tier rating.

How CMS Scores Quality Measures (QM)

The Quality Measure domain uses a points-based system to evaluate performance across multiple indicators—an essential component of nursing home quality improvement efforts.

Decile-Based Scoring (15–150 points)

Used for many CMS measures:

• Negative measures (lower rates = better outcomes)
• Positive measures (higher rates = better outcomes)

Top performers earn up to 150 points, while lower-performing facilities receive fewer points.

Quintile-Based Scoring (20–100 points)

Used for select measures:

• Best performance = 100 points
• Lowest performance = 20 points

A facility’s total QM score determines its Quality Measure star rating, directly impacting the overall CMS rating.

Exception Scoring: Ensuring Fair Comparisons

Some measures—such as falls with major injury or use of restraints—often result in zero reported cases across many facilities.

To maintain fairness, CMS applies exception scoring:

• Facilities with zero occurrences are grouped together
• All receive the highest possible score

This approach ensures:

• High-performing facilities are not penalized
• Comparisons remain meaningful across providers
• Data accurately reflects resident safety and outcomes

Short-Stay vs. Long-Stay Residents

Not all nursing homes serve the same populations. CMS accounts for this by adjusting scoring based on resident type:

• Short-stay facilities → scored only on short-stay measures
• Long-stay facilities → scored only on long-stay measures

This ensures facilities are evaluated fairly based on the care they actually provide.

Why Short-Stay Measures Are Adjusted

Short-stay Quality Measures are multiplied by a factor of 1.150/800 to align with long-stay scoring potential.

Without this adjustment:

• Short-stay facilities could appear to perform worse
• Scores would not accurately reflect care quality

This methodology supports equitable benchmarking across nursing homes, regardless of patient mix.

A Closer Look at Performance Data

For example, a facility with:

• 8.8% of residents requiring increased assistance
  may fall into a higher-performing decile, earning approximately 120 QM points—a strong indicator of quality care.

In CMS scoring models:

• Higher points = better performance
• Benchmarks help facilities track quality improvement progress over time

Final Thoughts: Using CMS Ratings to Drive Improvement

The CMS Five-Star Rating System does more than rank nursing homes—it provides a roadmap for continuous quality improvement in long-term care.

By understanding how ratings are calculated, facilities can:

• Strengthen quality improvement initiatives
• Improve resident outcomes and safety
• Increase transparency with families and caregivers
• Enhance staff recruitment and retention
• Build a stronger reputation in their communities

Ultimately, tools like CMS Quality Measures and Five-Star Ratings empower providers to deliver higher-quality, patient-centered care—while helping families make confident, informed decisions.