Special Focus Nursing Facilities that “Have Not Improved:” Poor Care for Residents, Overall Ratings Artificially Boosted by 5-Star Ratings in Self-Reported Quality Measures

The Centers for Medicare & Medicaid Services (CMS) identifies some of the worst performing nursing facilities in the country as Special Focus Facilities (SFFs).  This Report looks at one of the four categories of SFFs – those that “have not improved” – and how they game and manipulate CMS’s Five-Star Quality Rating System.[1]

As discussed more fully below, the most striking finding in this analysis is that 13 of 33 SFFs (39%) that CMS identified as not having improved had five stars in their self-reported quality measures domain, leading to an upward adjustment from one star to two stars for their overall ratings.  Such high scores on quality measures are implausible for SFFs that have not improved.  Four of these 13 SFFs also had four stars on their staffing ratings.  Four stars in staffing are usually sufficient to boost a facility’s overall rating by one star.  However, as discussed below, CMS does not increase a facility’s overall rating by more than one star, even when both the staffing and quality measure ratings would otherwise lead to an increase of one star.

A total of 19 of the 33 SFFs (58%) increased their one star health rating to a two-star overall rating because of their quality measures rating or nurse staffing ratings.  Six of the 19 SFFs increased their one star health rating to a two-star overall rating because of their high nurse staffing ratings of four or five stars; the quality measure ratings for these six facilities were all below five stars.

Background

In cooperation with states, CMS identifies nursing facilities that have a history of serious noncompliance.  These facilities – which are called Special Focus Facilities[2]  – are among the worst performing facilities in the country.  As described by CMS, SFFs have

• More problems than other nursing homes (about twice the average number of deficiencies),
• More serious problems than most other nursing homes (including harm or injury experienced by residents), and
• A pattern of serious problems that has persisted over a long period of time (as measured over the three years before the date the nursing home was first put on the SFF list) [underlining in original].[3]

Nursing facilities identified as SFFs have an additional standard survey each year and are expected, within 18-24 months, to “graduate” from the SFF program, to be terminated, or to remain (if they have made substantial improvement or are expected to be sold).  Each month, CMS identifies new SFFs and identifies which current SFFs have not improved, have improved, or have been terminated.

The Nursing Home Reform Law governs the standards of care (called Requirements of Participation) that Medicare and Medicaid facilities must meet in order to be eligible for reimbursement under the federal payment programs; the survey process used to determine compliance with federal standards of care; and remedies or penalties that may be imposed for noncompliance.[4]  

CMS categorizes deficiencies that are cited as a result of unannounced surveys according to their scope (how many residents are affected) and severity (how serious the noncompliance is).  Nationwide, in 2014, only 0.9% of deficiencies were cited as immediate jeopardy (the highest category of noncompliance) and 2.2%, as harm (the second highest level of noncompliance).[5]  Most deficiencies are identified as causing residents no-harm.  The remaining deficiencies are identified as causing residents no-harm or as substantial compliance.[6]   CMS imposes penalties primarily for jeopardy- and harm-level deficiencies.  Among the remedies that CMS may impose are civil money penalties (CMPs), either per day or per instance CMPs. 

Per day CMPs for jeopardy-level deficiencies range from $6394 to $20,965; per instance CMPs for jeopardy-level deficiencies range from $2097 to $20,965.[7]  The difference between the two types of CMPs is that per day CMPs increase with the number of days a facility is cited as being out of compliance with federal standards of care, while per instance CMPs reflect a flat fine unrelated to the duration of noncompliance.

CMS’s website Nursing Home Compare reports ratings for each nursing facility that participates in Medicare or Medicaid, or both, on three domains: health survey (based on unannounced annual and complaint surveys that are conducted by state survey agencies); nurse staffing data (based, since May 2018, on payroll-based information[8]); and quality measures (based primarily on self-reported and unaudited resident assessment information provided by facilities).  CMS assigns star ratings to each of the three domains and an overall score, which starts with the health survey rating and revises the overall rating downward or upward to reflect, respectively, one-star and five-star ratings on the staffing and quality measure domains.  Facilities with one star in the health survey rating can boost their overall ratings by only one star, even when both their staffing rating and quality measure ratings are high enough (four or five stars for staffing; five stars for quality measures) to add a star to their overall ratings.[9]  Ratings in each domain and in the overall rating range from one to five stars, with one star reflecting the lowest performance and five stars, the highest performance.

Nursing Home Compare reports two of the federal penalties –  CMPs[10] and denials of payment for new admissions (DPNAs).[11]  When facilities appeal CMPs, the CMPs are not reported on Nursing Home Compare unless and until they are upheld and final. 

The federal Nursing Home Reform Law requires nursing facilities to have RNs on site eight hours per day, seven days per week.[12]  Nursing Home Compare includes an icon to identify facilities that report seven or more days in the quarter without a registered nurse on site, fail to report auditable data, or fail to report nurse staffing data.[13]  CMS reports that 6% of facilities nationwide had inadequate RN coverage in the fourth quarter of calendar year 2017, as so defined. 

The Data Below

The July 19, 2018 list of SFFs that “have not improved” includes 33 nursing facilities in 22 states.[14]  These 33 SFFs had been identified as SFFs for three to 25 months.  The Center looked at Nursing Home Compare to identify how many jeopardy-level and harm-level deficiencies these 33 SFFs had in the current and prior survey cycles, whether CMPs or DPNAs were imposed in the prior three years, whether the SFFs lacked mandated RN coverage or had other problems in staffing data, and their quality measure ratings. 

The chart below reports the number of jeopardy and harm deficiencies in the current survey cycle and immediately prior year.  Two years’ data are reported because the survey star rating is based on two years of survey results, as frozen for a year in November 2017.[15]  However, the chart separately identifies jeopardy and harm deficiencies cited in 2018 following complaint or annual surveys.  It also separately records jeopardy and harm deficiencies cited in 2015 that may have been used by CMS in calculating star ratings that are publicly reported.  As noted above, Nursing Home Compare reports only final CMPs; CMPs that facilities are appealing are not included.  This practice may result in the under-reporting of additional CMPs that CMS has imposed against these SFFs.  The chart also reports CMPs and DPNAs that were imposed in the prior three years.

Nursing Home Compare reports the following information about these 33 facilities. 

Special Focus Facilities, “Have Not Improved,” as of July 19, 2018

The 33 SFFs that had not improved can be described as follows:

Deficiencies

• 4 SFFs were cited only with jeopardy-level deficiencies
• 8 SFFs were cited only with harm-level deficiencies
• 21 SFFs were cited with both jeopardy-level and harm-level deficiencies
• In 2018, 25 of 33 SFFs had annual or complaint surveys
  • 18 of the SFFs had jeopardy or harm cited in 2018
  • 7 of the SFFs did not have jeopardy or harm cited in 2018
• 25 SFFs were cited with 131 jeopardy-level deficiencies
• 29 SFFs were cited with 94 harm-level deficiencies
• 2018 to date, 18 SFFs were cited with
  • 16 jeopardy-level deficiencies
  • 27 harm-level deficiencies
• 11 SFFs had CMPs only
• 1 SFF had DPNA only
• 18 SFFs had both CMPs and DPNAs
• 3 SFFs had neither CMPs nor DPNAs

CMP Amounts

• Total CMPs imposed in 3-year period ranged from $6,622 to $1,127,000
• 1 CMP imposed in 2018 ($10,400)
• SFFs with CMPs totaling $5,966,230 and 28 DPNAs over a 3-year period
  • 29 SFFs had total CMPs imposed ranging from $6,622 to $1,127,000 over a 3-year period
    • 12 of the SFFs had CMPs under $100,000
    • 17 of the SFFs had total CMPs over $100,000

Quality measure domain

• 13 SFFs had 5 stars on the quality measures domain
• 7 SFFs had 4 stars on the quality measures domain

Nurse staffing

• 6 SFFs had overall ratings of 2 stars based on nurse staffing star ratings
  • 2 of the 6 SFFs had 5 stars in nursing
  • 4 of the 6 SFFs had 4 stars in nursing

• 8 SFFs had 1 star on nurse staffing
  • 4 of the 8 SFFs had an icon indicating that they did not submit staffing data, reported large numbers of days with no RN coverage, or submitted data that could not be verified

Discussion

What do we learn about these facilities from Nursing Home Compare?

1. Facilities boost their overall ratings to 2 stars by reporting resident assessment data that give them 5 stars in the quality measure domain.  Thirteen of the 33 SFFs (39%) achieved two stars in their overall ratings (defined as much above average performance) on this basis.  Since SFFs are among the poorest quality facilities in the country, the self-reported quality measure domain is highly misleading.

   Facilities’ manipulation of quality measures has been identified before.  The New York Times reported in 2014 that nursing homes game the Five-Star Rating System by reporting resident assessment information that gives them high ratings in the quality measure domain.[16]

   An analysis of the first five years of the Five Star Rating System, prepared for CMS by Abt Associates, found that the percentage of facilities receiving four or five stars on the quality measure domain increased from 35.2% in 2009 to 50.5% in 2013, while the percentage of facilities receiving one star in the quality measure domain declined from 22.7% to 10.5% over the same five-year period.[17]
    

2. The SFFs provide exceptionally poor care, as reflected by the high numbers of jeopardy and harm deficiencies cited in the current and immediately prior years.  These 33 SFFs, together, were cited with 131 jeopardy deficiencies and 94 harm deficiencies over a two-year period.  In 2018, they have been cited, so far, with 16 jeopardy-level deficiencies and 27 harm-level deficiencies, although CMS does not use the 2018 deficiencies in calculating the facilities’ star ratings.
    
3. Enforcement actions are relatively minor.  Twenty-nine of the 33 SFFs had at least one CMP imposed in the three prior years.  Twelve of the 29 SFFs had total CMPs for the three-year period below $100,000 (ranging from $6,622 to $93,302), while 17 SFFs had total CMPs for the three-year period exceeding $100,000 (ranging from $118,848 to $1,127,000). 

   For all 29 SFFs with at least one CMP, the total CMPs were $5,966,230.For these 29 SFFs, the average CMP was $68,577 per year per facility.

   Three of the 33 SFFs (9%) had neither CMPs nor DPNA imposed in the prior three years.

   Moreover, CMPs are declining.In 2016, the Obama Administration issued guidance to Regional Offices directing them to impose per day CMPs as the default CMP type.[18]In 2018, the Trump Administration replaced the Obama guidance with new guidance calling for per instance CMPs as the default.[19]

   The result, already, is fewer per day CMPs and more per instance CMPs. In Fiscal Year (FY) 2016, under the Obama Administration, there were 1,728 per day CMPs (averaging $53,846) and 942 per instance CMPs (averaging $3,162).As of August 14, 2018, 617 per day CMPs (averaging $73,499.86) and 1,355 per instance CMPs (averaging $9,515.38) have been imposed.[20]CMS will impose lower total CMPs going forward.
    

4. Four of the 33 SFFs reported high numbers of days without any registered nurse (RN) coverage, failed to report nurse staffing data, or failed to submit auditable nurse staffing data.  More than 12% of 33 SFFs that have not improved fall into this category.

   Nurse staffing levels are lower than reported on Nursing Home Compare.  The New York Times recently reported that the new staff reporting system documents that on at least one day in the last quarter of 2017, 25% of nursing facilities reported at least one day without an RN on site.[21]  The Times finds that nurse staffing levels have been overstated for many years and that the new system, while better than the prior self-reported system, does not reflect facilities’ erratic and fluctuating staffing levels and continues to overstate staffing levels by including and counting nurses who do not provide direct care to residents.

Conclusion

Facilities that are identified as among the most poorly performing facilities in the country and that have not improved are able to boost their overall ratings to two stars by reporting high quality measures.  Limited fines have been imposed against them.  Going forward, under policies implemented by the Trump Administration, SFFs (and all nursing facilities that are fined) are likely to have even lower fines. 

CMS needs to strengthen the SFF program to take more effective action against facilities that provide poor care.  It also needs to revise Nursing Home Compare to more accurately reflect nurse staffing levels at all nursing facilities nationwide and to discontinue using the quality measure domain in calculating star ratings for nursing facilities.