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High Profile Report – Faulty Medicare Rating System?

Nursing homes and long-term care facilities are among the many health care providers that can submit reimbursements to Medicare and Medicaid, which are federal programs administered through the states, for expenses incurred for treating and caring for patients who are insured by Medicare or Medicaid. These federal program s lay out certain rules that providers must follow in order to maintain eligibility for such reimbursements.

The government also provides reviews and ratings on certain facilities, including disciplinary action taken against them for violating rules. The Centers for Medicare and Medicaid Services (CMS) specifically uses what it calls a “Five-Star Quality Rating System” for its Medicare program to provide information to consumers, including patients and/or their families and caregivers, in doing the due diligence to find the right facility for the best level of care. As the New York Times describes it, it is like a hotel-style rating. Approximately one fifth of the over 15,000 nursing homes across the United States has the top 5-star rating.

Investigation Reveals Problems

Rosewood Post-Acute Rehab, which is a nursing home in a Sacramento, California suburb, is one such facility with a 5-star rating. However, a New York Times investigation has revealed that the rating system has operated on incomplete information in assigning ratings to facilities like Rosewood and others. Part of the problem may be somewhat obvious: much of the data used to assess nursing homes comes from self-reporting by those very facilities, and much of that information goes unverified. As the Times notes, independent assessments done for government health inspections comprise the only criterion that are just that – independent. The rest of the information considered entails the volume of staff and quality of care, which is predominantly submitted by the facilities themselves. According to the article, Rosewood, for example, was hit with 102 consumer complaints over the course of approximately 5 years, and a year ago was fined by the state of California for $100,000 because of an overdose of blood thinner that killed a patient. It has been discovered throughout the investigation of the rating system that not all information such as fines or enforcement actions are taken into account.

Rosewood has become an example of the many nursing homes that look brand new, polished, and give off a superficial vibe that it is the right place for a potential resident. Yet those who had this initial vibe have since backtracked, including one recent lawsuit brought by someone on behalf of their mother alleging she did not receive the proper treatment for a respiratory condition, and eventually passed away as a result. The home lacked certain basic supplies and did not have a substantial enough staff. The latter is a problem commonly observed across facilities which cut down on staff and training in order to decrease overhead and increase their bottom line, all at the expense of the well-being and lives of their patients for whom they are paid substantial sums of money to treat and care properly. Demonstrating the potential problem with relying on substantial self-reported data, nursing homes that have been watched closely by the government to assess quality nevertheless boast high rankings in terms of quality and staff levels. There is impliedly a tremendous conflict of interest here.

As the Times notes, the Medicare rating system is important to nursing homes for reputation in order to increase business from insurance companies as well as through doctor referrals. Federal officials acknowledge the need for improvement in the system, but also point to how it incentivizes homes to improve quality of care. For those considering a nursing home for themselves or loved ones, it is important to understand the importance but also the limitations of the rating system.

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