The Growing Influence of Five-Star Ratings in LTPAC

April 18, 2022 Lynne Jackson

Skilled nursing facilities rely on their workforce management system to fulfill state and federal compliance reporting requirements. But most workforce management systems fall woefully short when it comes to helping providers achieve—and keep—their desired Five-Star Rating. 

The Pursuit of Five-Star Ratings

In long-term and post-acute care (LTPAC), Five-Star Ratings make or break a facility’s reputation.

Why? Because:

  •          Residents and families use Five-Star Ratings as a guide when choosing facilities.
  •          Medicare bases per resident reimbursements on the facility’s Five-Star Ratings. 
  •          Investors rely on Five-Star Ratings to gauge investment viability.

In addition, recent government studies claim a LTPAC facility’s market share rises or falls when their Five-Star Ratings change.

The history of Five-Star Ratings

Following Congressional complaints, the Centers for Medicare & Medicaid Services (CMS) developed the Five-Star Rating system in 2007. They intended to help consumers evaluate skilled nursing facilities.

Then CMS started publishing Five-Star Ratings on its Nursing Home Compare website for nursing homes participating in Medicare or Medicaid. CMS awards each facility an overall Five-Star Rating ranging from one to five stars and individual Five-Star Ratings for:

  • Staffing
  • Quality
  • Inspections

CMS calculates the overall Five-Star Rating based on several criteria. This includes the performance of other nursing homes, as well as the ratings for staffing, quality, and inspections.

Nursing homes awarded five stars are deemed above average quality. Those receiving one and two stars are considered below average. To learn more about CMS’ criteria, watch Perspective on Payroll-Based Journal — Hear It from CMS and Other Experts.

Consider the financial implications of Five-Star Ratings

The financial impact of Five Star Ratings cannot be overstated. Facilities often suffer an immediate loss when their ratings dip.

“A nursing home that receives three stars in an on-site inspection may only expect a $10.44 profit from treating one patient for one day. However, if it gains two additional stars after self-reporting and achieves an overall rating of five stars, its expected profit increases to $16.88,”according to the Brookings Institute.

Meanwhile, consumers, physicians, and lenders flock to facilities with the highest ratings. As a result, those with lower Five-Star Ratings can sustain long-term damage to their reputation and their bottom line due to:

  •  Lost referrals since medical professionals make referrals based on Five-Star Ratings.
  •  Higher risk assessment. The U.S. Department of Housing and Urban Development (HUD) use Five-Star Ratings to assess risk when making lending decisions.
  •  Higher interest rates. Banks and institutional investors include Five-Star Ratings on underwriting checklists.
  •  Higher insurance premiums. Insurance companies use Five-Star Ratings when designing policies.
  •  Fewer residents. Select Medicare plans will not cover facilities that receive Five-Star Ratings with fewer than three stars, according to Leading Age.  

Consequently, LTPAC facilities’ bottom line rises and falls with their Five-Star Rating.

The National Institute of Health reports the market share of one-star facilities fell 8% while the market share for five-star facilities climbed 6%.

Learn how Five-Star Ratings are calculated  

The CMS gathers evidence on the three key measures and adds them into its equation before calculating a facility’s Five-Star Rating.

Inspection. An onsite health inspection kicks off the Five-Star Rating process. CMS sets the initial Five-Star Rating based on the results of their inspection.  

The Five-Star Ratings for quality and staffing are based on self-reported data filed in compliance with CMS guidelines.

Staffing. Staffing represents the most challenging and precarious measurement. This is because staffing requirements vary daily based on each facility’s changing resident populations and acuity needs. This measurement can also bear the greatest impact on the overall Five-Star Rating, especially if it’s below average.

Currently, about 10% of nursing homes receive coveted five stars while 20% receive one star and the remaining 70% are allocated two, three and four stars in equal proportions, according to Leading Age

CMS created Payroll-Based Journal guidelines that define what information providers must collect and how to report it. Payroll-Based Journal reports are due quarterly and are often generated by a workforce management system.

How PBJ reporting and workforce management systems boost Five-Star Ratings  

75% of nursing homes don’t comply with required levels of nursing staff, which jeopardizes quality care.

Providers need Payroll-Based Journal software that integrates with real-time scheduling and attendance functions — key components of the workforce management system. An integrated workforce management system helps facilities stay abreast of changing staffing dynamics and generate compliant reports.

In addition to delivering a consolidated view of live, past, and future schedules, the workforce management system should help providers prevent compliance violations.

Why integrate PBJ reporting and staffing with your workforce management system

An integrated workforce management system should:

  • Monitor current and projected staffing levels for all sites.
  • Notify authorized personnel when any site or schedule falls below compliance requirements.
  • Instruct managers what they need to do to avoid a non-compliance incident.

How to keep up with evolving CMS requirements

The workforce management system must also stay up to date on evolving government regulations for Five-Star Ratings requirements and Payroll-Based Journal reporting. Watch Payroll-Based Journal Meal Break Policy Update to learn more.

Providers must confirm their software providers continually update their workforce management system and train users on evolving Payroll-Based Journal requirements well before quarterly deadlines. For example, CMS recently changed how LTPAC facilities must report meal breaks.

When the workforce management system is integrated with the payroll system, providers can more easily comply with reporting requirements. For example, the Payroll-Based Journal system must also use payroll records to confirm the validity of their reports and meal breaks. If payroll is not integrated with the workforce management system, administrators must manually collect this data.

Why most facilities fail CMS staffing requirements

Even the best Payroll-Based Journal software cannot ensure compliance if LTPAC facilities fail to properly schedule and enforce CMS staffing requirements. This happens to thousands of facilities every week. A July 2019 study by Harvard and Vanderbilt University researchers reports that 75% of nursing homes do not fully comply with the required level of nursing staff. This jeopardizes the quality of patient care.

“One troubling aspect of our findings is that 75% of nursing homes were almost never in compliance with what CMS expected their RN staffing level to be, based on residents’ acuity,” wrote Fangli Geng, David Stevenson and David Grabowski in Daily Nursing Home Staffing Levels Highly Variable, Often Below CMS Expectations for HealthAffairs.

CMS requires LTAC facilities to keep a registered nurse (RN) onsite 8 hours a day, every day. Many LTAC met this requirement during the week but failed to demonstrate weekend compliance.

A study of 15,000 long-term and post-acute care facilities found “96% had an RN onsite for at least eight hours a day, 80% of the year on weekdays. On weekends, 91% of long-term care facilities met this requirement less than 60% of the time.

In addition to compromising the quality of care, this noncompliance forces the Payroll-Based Journal reporting to drag down the overall Five-Star Rating.

Understand the Five-Star Rating calculation

CMS calculates RN and total nurse staffing ratings individually and assigns five stars for staffing to facilities who:

  • Earn five stars in both RN coverage and total staffing, or
  • Earn five stars for RN coverage and four stars in total staffing.

Workforce management systems with integrated Payroll-Based Journal, scheduling, and attendance functions can help providers improve their Five-Star Rating by proactively identifying days without RN coverage. Some workforce management systems, like SmartLinx workforce management system, can even identify RN staffing violations as soon as they happen. As a result, providers can fill the open shift before it turns into a compliance violation and affects their Five-Star Rating.

Consider how SmartLinx Payroll-Based Journal system, as part of the SmartLinx workforce management system, identifies actual and potential compliance violations in real-time.

Integrated workforce management systems alone cannot overcome staffing problems. The nursing shortage and high employee turnover intensify staffing challenges. Experts throughout the industry are searching for solutions. Learn more in Understanding Staffing Shortages eBook.

Fix Payroll-Based Journal reporting problems

Even your best efforts can fall short. Creating compliant Payroll-Based Journal reports can be labor-intensive and error-prone. Payroll-based Journal reporting errors damage staffing ratings for many facilities.

Fortunately, an integrated workforce management system can simplify Payroll-based Journal reporting by continually collecting staffing and attendance data and storing it according to CMS guidelines.

“The amount of time the SmartLinx workforce management system saved on scheduling lets us dedicate more time to residents. Having integrated scheduling, time keeping and payroll changed a full day’s process to a couple of hours. SmartLinx stays on top of changing regulations. When we need to comply with ACA and PBJ, it’s easy because SmartLinx tracked the data,” said Amanda Todd, HR Director for Spring Valley Senior Living.

However, submitting perfect Payroll-based Journal reports doesn’t necessarily mean you’re in the clear. CMS and state regulators often conduct surprise inspections that require you demonstrate compliance on demand. An integrated workforce management system should be able to produce reports and images that quickly verify staffing history against compliance requirements for any designated time and site.

Read how Greek American Rehabilitation used SmartLinx workforce management system to refute a compliance allegation in moments.

How to keep up with changing resident needs

Complying with CMS strict staffing requirements can seem impossible amid fluctuating PPD census values and scheduling changes.

Facilities can no longer rely on disparate workforce management systems and standard scheduling practices. They must track multiple scheduling variables, close gaps, and share data among integrated workforce management functions simultaneously. Payroll-Based Journal, scheduling, attendance, payroll, and mobile workforce management apps must share the same, accurate data —in real-time.  

Deploying an integrated workforce management system designed specifically for long-term and post-acute care facilities can make sure your staffing adjusts to changing PPD census values. The workforce management system monitors ongoing staffing. It then compares it with changing resident acuity and populations. Systems, like SmartLinx workforce management system, then automatically notify managers of additional scheduling needs.

With the right integrated workforce management system, providers can quickly identify and close scheduling gaps by:

  •  Alerting schedulers of open shifts and those qualified to fill them.
  • Notifying employees of open shifts and enabling them to sign up quickly and easily.
  • Leveraging a mobile workforce management system to provide anytime, anywhere access to updated schedules, shift swap requests, open shifts, anywhere, anytime.
  • Preventing scheduling gaps by allowing employees to access schedules, swap shifts, and adjust time off in near real-time from mobile devices and PCs.

Predict Five-Star Ratings with workforce management

To maximize your Five-Star Rating, you need a workforce management system that continually monitors staffing and predicts Five-Star Ratings early in the quarter. The workforce management system must identify issues that will damage your score and suggest resolutions.

Cutting-edge workforce management systems let you set a desired Five-Star Rating. Then they instruct you how to staff to meet your goal and resolve issues that jeopardize it—in real-time.




SmartLinx Workforce Management with Five-Star Predictor

SmartLinx workforce management system with Five-Star Predictor helps you evaluate your staffing rating based on Payroll-Based Journal reporting long before the CMS submission deadline. The workforce management system aggregates hourly staffing data in the Payroll-Based Journal, attendance and employee scheduling systems. It also factors in CMS calculation criteria and evolving requirements. The workforce management system’s Five-Star Predictor automatically rates each facility in real time. It then displays warnings when any facility’s staffing is poised to jeopardize your desired rating.

With SmartLinx workforce management system, you can also designate a specific time period to review and predict the corresponding staffing rating. The workforce management system uses current and historical data to calculate the Five-Star Rating and identify options for improving staffing to achieve the desired star rating.

You can:

  • Analyze future schedules.
  • See where and when you’ll need additional nursing staff.
  • Identify the amount of missed coverage that will cause your rating to drop.

Read more about SmartLinx Workforce Management System with Five-Star Predictor.


Future implications

The focus on Five-Star Ratings will continue growing as will the demand for long-term and senior care. Your workforce management system must be prepared to meet escalating demands.

The percentage of Americans living in nursing homes increases as people age, according to the U.S. Census Bureau. Currently, nursing homes house about 5% of people 65 and older, 24% of older demographics, and 50% of people over 95.

Today, about two million Americans call a long-term care facility home. As life expectancy continues to rise, so will the number of nursing home residents.

The U.S. Census Bureau projects the number of Americans 65 and older to nearly double from 52 million to 95 million by 2060. Of the 78 million baby boomers today, 3.9 million are expected to need long-term or post-acute care over the next several years.

For LTPAC providers, demonstrating quality care and compliance will remain a top key performance indicator. Integrated workforce management systems with Payroll-Based Journal reporting and on-demand analytics can empower providers with the knowledge they need—in real-time—to predict and obtain their desired Five-Star Rating.

Learn how to reach for Five Stars to achieve a stellar reputation, full reimbursements and high quality of care.

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