the CMS 5-Star Rating System

Nursing Home Ratings: A Guide for Healthcare Professionals and Industry Leaders

Nursing home ratings are essential tools used by regulators, providers, and families to assess the quality of long-term care facilities. For healthcare professionals and industry leaders, understanding these ratings—and how to improve them—is critical for delivering excellent care, meeting compliance standards, and maintaining public trust.

1. Understanding Nursing Home Ratings Systems

Medicare's 5-Star Rating System Explained

The Centers for Medicare & Medicaid Services (CMS) developed the 5-Star Quality Rating System to help consumers, families, and caregivers compare nursing homes more easily. Ratings range from 1 star (much below average) to 5 stars (much above average).

CMS Rating Methodology

CMS evaluates three core areas:

• Health Inspections
• Staffing
• Quality Measures (QMs)
  Each area receives its own star rating, which is then combined into an overall rating.

How State-Specific Rating Systems Compare to National Standards

Some states enhance the CMS system with additional metrics, while others maintain independent rating systems. These may include patient satisfaction surveys, infection control violations, or state-specific inspection protocols.

2. Medicare Nursing Home Ratings: What They Mean

Breaking Down the Medicare Star Rating Components

Each nursing home’s star rating is based on:

• Results from annual health inspections
• Staffing levels and turnover rates
• Clinical data and resident outcomes from the Minimum Data Set (MDS)

Medicare.gov Nursing Home Comparison Tools

The Medicare Care Compare website allows users to search for and compare facilities by location, overall rating, and individual component ratings. This tool is not just for families—it’s a critical resource for healthcare systems, ACOs, and post-acute care networks evaluating referral partners. Industry leaders can leverage this data to assess facility performance, identify high-performing partners, and monitor quality trends across service areas.

Additionally, Care Compare offers downloadable datasets and mapping tools, which can support network analysis, strategic planning, and compliance monitoring. Integrating these insights into decision-making can enhance patient outcomes, reduce rehospitalizations, and align with value-based care goals.

How to Interpret Medicare Nursing Home Ratings

While star ratings provide a snapshot of quality, they should be considered alongside facility visits, staffing trends, and inspection reports for a fuller picture. For healthcare industry leaders, deeper interpretation is key. A facility’s low staffing score, for instance, may signal risk in patient transitions or care continuity, while a consistent pattern of health inspection deficiencies could suggest systemic compliance issues.

Use trend analysis to track performance over time and align nursing home partners with your organizational quality benchmarks. Leaders should also monitor changes to CMS methodology and anticipate the impact of rating adjustments on contractual relationships and public perception.

3. The CMS Nursing Home Rating System

How CMS Evaluates Nursing Homes

CMS uses both federal inspection data and self-reported information to assess compliance with safety and care standards.

Understanding the Different Aspects of CMS Ratings

• Health Inspections: Based on unannounced visits and complaint investigations.
• Staffing: Considers nursing hours per resident per day, adjusted for acuity.
• Quality Measures: Includes short- and long-stay metrics like pressure ulcers, hospitalizations, and COVID-19 vaccination rates.

Recent Updates to the CMS Rating System

CMS periodically updates its methodology. Recent changes include:

• Greater emphasis on weekend staffing
• Recalibration of quality measures to improve accuracy
• Integration of COVID-19 data into QM calculations

4. State-Specific Nursing Home Information

Regional Differences in Nursing Home Quality

Geographic disparities in staffing, funding, and regulations can lead to wide variation in facility quality across states. Rural facilities, for example, may struggle with workforce shortages and limited access to specialized care, while urban areas might face higher staff turnover and regulatory complexity.

For healthcare industry leaders, understanding these regional nuances is essential when developing multi-state strategies, forming referral partnerships, or assessing risk across networks. Differences in Medicaid reimbursement rates, state survey enforcement, and local labor markets all influence quality outcomes and ratings. Leaders should use region-specific data to inform performance improvement initiatives, direct resources effectively, and set realistic benchmarks tailored to each state’s regulatory environment and market conditions.

State Health Department Resources

Most state departments of health maintain inspection reports, complaint histories, and facility directories. These resources offer valuable local context to supplement CMS data.

Key resources often include:

• Licensure and certification status of nursing homes
• Detailed inspection and deficiency reports beyond what’s listed on Medicare Care Compare
• Complaint investigation outcomes and enforcement actions
• State-specific quality initiatives or performance benchmarks not captured federally
• Access to public health alerts or infection control advisories
• Lists of facilities under special focus or enhanced oversight

Healthcare leaders can use these tools to:

• Validate CMS ratings with up-to-date local data
• Identify emerging risks or quality issues early
• Align internal quality metrics with state compliance standards
• Monitor facilities' involvement in state-level improvement collaboratives or pilot programs

5. How to Raise Your Nursing Home’s Ratings

Improving nursing home ratings requires a multifaceted approach centered around workforce development, quality measurement, and proactive compliance. These strategies are especially critical for healthcare leaders responsible for operational performance, brand reputation, and patient safety outcomes.

Improving Staffing Ratios and Reducing Turnover

Investing in staff recruitment, training, and retention can significantly improve both staffing and quality ratings. A stable, well-trained workforce leads to consistent care delivery, improved resident satisfaction, and fewer deficiencies on inspections.

Learn How to Build a Stronger Long-Term Care Workforce

Download Quality Insights’ white paper, “Building a Thriving Workforce: Achieving Stability and Enhanced Care”, which outlines proven strategies from the Staffing Solutions for Nursing Homes (SSNH) program. You'll discover actionable insights on employee engagement, onboarding, and workforce retention that have transformed outcomes in 55 facilities across PA and WV.

Key highlights include:

• Evidence-based approaches to staff satisfaction and retention
• Innovative use of the Joy in Work framework to address burnout
• Practical tools and templates for onboarding and communication

Enhancing Quality Measures through Data-Driven Interventions

Leverage real-time MDS data to identify trends in falls, pressure injuries, UTIs, immunization rates, and rehospitalizations. Quality leaders can use this information to pinpoint root causes, implement targeted interventions, and track improvements over time.

Consider forming interdisciplinary teams to regularly review quality metrics and use evidence-based tools—like those featured in the SSNH program—to ensure frontline staff are engaged and empowered in the improvement process.

Preparing for Health Inspections

Success during health inspections starts long before surveyors walk through the door. Healthcare leaders can foster readiness by:

• Conducting internal audits using the same protocols as state surveyors
• Training staff on documentation and care standards
• Hosting mock survey exercises and real-time feedback sessions
• These proactive steps not only minimize deficiencies but also boost team confidence and cohesion.

6. Using Ratings to Guide Quality Improvement

Benchmarking Against High-Performing Facilities

Analyze 5-star facilities’ practices to identify actionable steps you can adopt.

Aligning QAPI Programs with Rating Metrics

Integrate rating components into your Quality Assurance and Performance Improvement (QAPI) initiatives.

7. Addressing Common Rating Challenges

Dealing with Inaccurate or Outdated Data

Work with CMS or state authorities to correct errors in staffing or quality data that can unfairly affect ratings.

Navigating Reputational Impact

Develop communication plans to proactively address negative ratings with families, stakeholders, and referral partners.

8. Staff Engagement and Culture as a Foundation for Ratings

Why Culture Change Matters

Facilities with strong internal cultures typically see higher satisfaction, lower turnover, and better quality outcomes.

Involving Staff in Quality Goals

Create frontline ownership of quality improvement initiatives by recognizing contributions and providing leadership development opportunities.

9. Leveraging Technology to Boost Performance

EHR Integration and Reporting

Utilize electronic health record (EHR) systems to automate data collection and streamline MDS submissions.

Predictive Analytics for Proactive Care

Use predictive tools to anticipate adverse outcomes like hospital readmissions or falls and intervene early.

10. Understanding Ratings in the Context of Value-Based Care

How Ratings Affect Reimbursement and Referrals

CMS star ratings are more than just a public quality indicator—they’re a growing driver of financial performance and strategic positioning in the healthcare ecosystem.

• Reimbursement Impacts:
  Star ratings are increasingly tied to value-based purchasing models. Facilities with lower ratings may receive reduced Medicare and Medicaid reimbursements, while higher-rated facilities may qualify for incentive payments or preferred status under performance-based contracting arrangements.
  
  
• Referral Relationships:
  Hospitals, ACOs, and managed care organizations often use CMS ratings to guide discharge planning and establish referral partnerships. A consistently low star rating can lead to fewer referrals from acute care hospitals seeking to reduce readmissions and improve care transitions. Conversely, high-rated facilities are more likely to be included in narrow networks or designated as preferred post-acute partners.
  
  
• Managed Care and Insurance Networks:
  Payers increasingly evaluate star ratings when negotiating managed care contracts. Facilities with strong performance metrics—especially in staffing and quality measures—may have greater negotiating leverage or be more attractive to Medicare Advantage plans and insurers prioritizing quality and cost efficiency.
  
  
• Market Reputation and Occupancy Rates:
  For-profit and non-profit nursing homes alike are affected by public perception. Consumers—especially family decision-makers—often use Medicare.gov ratings as a deciding factor in placement. Poor ratings can directly impact occupancy and long-term financial viability.
  

For healthcare industry leaders, maintaining strong CMS ratings isn’t just about compliance—it’s a strategic necessity for financial health, growth, and partnership sustainability.

Positioning for Future Quality Initiatives

Facilities with high ratings are better positioned for pilot programs, grants, and preferred partnerships.

11. How Industry Leaders Can Support Quality Across Networks

As healthcare systems grow more integrated and quality benchmarks more visible, leaders overseeing multiple facilities or networks must take a proactive, strategic approach to elevate care and ratings across the board.

Multi-Facility Strategy for Rating Improvements

Managing a portfolio of nursing homes requires a balance between centralized oversight and local adaptation. Consider the following scalable interventions:

• System-Wide Infection Control Initiatives:
  Standardize infection prevention protocols and provide shared access to evidence-based training tools like CDC's Project Firstline. Use shared dashboards to monitor infections across sites and respond to trends proactively.
  
  
• Centralized Staff Training and Onboarding:
  Establish a corporate-level onboarding and continuing education framework, aligned with CMS quality measures and survey expectations. Standardized competencies can reduce variability in care delivery and help new hires integrate more quickly.
  
  
• Shared Staffing Resources and Float Pools:
  In regions where staffing shortages persist, create internal float pools or partnerships between facilities to support coverage needs without compromising care quality.
  
  
• Cross-Facility Quality Committees:
  Create a centralized quality assurance team that regularly audits performance metrics, coordinates improvement plans, and shares successful interventions across the network.

Collaboration Across the Continuum of Care

Improving outcomes—and therefore ratings—requires deep collaboration with care partners outside your walls. Strategic alliances can drive mutual gains in both patient outcomes and institutional ratings:

• Discharge Planning Partnerships:
  Work closely with hospitals to develop smooth, timely transitions of care. Ensure that discharge summaries, medication lists, and care plans are accurate and timely to prevent gaps in care.
  
  
• Integrated Care Pathways:
  Collaborate with home health, hospice, and primary care providers to implement shared care pathways for chronic conditions like heart failure, diabetes, and dementia. Clear role definitions and timely follow-ups reduce rehospitalizations and improve quality measures.
  
  
• Health Information Exchange (HIE) Utilization:
  Encourage all care partners in your region to participate in HIE systems. Shared data improves care coordination, medication reconciliation, and early identification of high-risk residents.
  
  
• Value-Based Contracting Alignment:
  Participate in ACOs or bundled payment initiatives where goals are aligned with long-term quality improvements. Coordinated care plans and shared savings models offer incentives to focus on resident-centered care and preventative strategies.

By leading from a systems-level perspective and fostering collaborative care ecosystems, industry leaders can not only improve CMS star ratings across facilities but also elevate care standards across their entire networks.