Ideas
Xu Han, PhD, Assistant Professor of Information, Technology, and Operations
Vector illustration of residents and others outside of nursing home
When he read about the death of a resident at a poorly-managed nursing home in California — a facility that somehow earned a five-star rating from the Centers for Medicare & Medicaid Services (CMS) — Xu Han, PhD, was compelled to take a closer look at the federal agency’s rating system. His subsequent research has inspired the agency to take steps to ensure greater accuracy and transparency in nursing homes’ self-reported data that influence the ratings.
Since 2008, consumers and healthcare professionals have consulted CMS’s Five-Star Quality Care System to evaluate and compare nursing homes nationwide. The resource, available on Medicare’s Nursing Home Care Compare website, is considered a gold standard, with grading based on health inspections by CMS-certified inspectors and self-reported data nursing homes provide.

“The CMS ratings, which are supported by the government, should be very accurate,” said Han, an assistant professor of information, technology, and operations at the Gabelli School. “So how can a nursing home like that, where their management is a mess and leads to a death, get five stars? I think they have some way to game the system to get a higher rating.”

While the nursing home was ultimately fined $100,000 for inadequate care, the resident’s death is one of numerous nursing home fatalities and injuries that could have been prevented with more accurate assessments of the facilities’ quality of care.

Investigating the CMS system and where it fails has been the focus of Han’s research and three scholarly papers, including “Catching Them Red-Handed: Optimizing the Nursing Homes’ Rating System,” which Han co-authored and published in the journal ACM Transactions on Management Information Systems. The findings confirmed that the greatest potential for inaccuracy is in the nursing homes’ self-reported measurements. A comparative examination of data from CMS and California state health departments of 1,219 nursing homes led Han to conclude that some facilities clearly inflated their ratings, presenting a misleading picture of the quality of care.

“The majority of [nearly 16,000 nationwide] nursing homes are for-profit,” he said. “They chase after profits and want to earn more money. A good rating can really bring them several benefits. They’ll have a very good flow of patients to pay to go to those nursing homes.” In one example, when a nursing home with a three-star rating achieved five stars, its per-patient, per-day profit jumped from $10.79 to $19.80 — that’s a difference of nearly $3,300 annually for every patient.

While CMS currently lacks the resources for an audit strategy, Han’s research and recommendations have motivated the agency to start collecting payroll data, forcing nursing homes to ensure that the data aligns with staff reports. “I see some of the rules are adjusted, so that it is now much harder for them to cheat,” he said. “There’s less gray area.”

While there is still room for improvement, the benefits of tighter policies are clear: vetted data will make it easier for families to make confident, informed decisions on the best nursing home options for their loved ones.

—Robert Lerose