Replace the Five Star Quality Ratings system with points?
When it comes to policing the nation's skilled nursing facilities, there is no denying that the Centers for Medicare & Medicaid Services has its hands full. After all, the agency has to make sure that more than 15,000 separate buildings are complying with thousands of rules and regulations.
In a perfect world, that job would be extremely difficult. In the current one, it's proving to be more than the government can handle.
What we have now — the Five Star Quality Ratings system — would seem to offer an effective way to see how well facilities are playing by the rules. To its credit, the concept is brilliantly simple: Rate facilities much as critics judge movies, with five stars being the highest possible score. Sounds easy enough, right? But in practice, this approach is proving to be seriously flawed.
For starters, facilities are only rated against other buildings in the same state. So a five-star facility in Iowa could be a three-star facility in New Hampshire, or vice versa. That's comparing apples to apples?
For another, the system relies on nursing homes to provide staffing and other critical data that helps determine how many stars are earned. Need I speculate on how such a perverse setup might tempt some operators to, shall we say, fudge a bit?
Worst of all, the Five Star system doesn't really put bad operators out of business. If it did, they'd be gone by now. In fact, there are still plenty of yo-yo operators out there demonstrating a barnacle-like ability to cling on.
So what's to be done? The obvious choice is to fix what's broken with the Five Star approach. In fairness, some incremental steps are being taken that do just that. But if and when all the fixes are made, the bad apples may still be spoiling the proverbial barrel.
Financial Advisor Joesph Fichera recently tapped out a thought-provoking guest column in the New York Times on a different but relevant topic. His piece was intended to help the Securities and Exchange Commission better police financial institutions. His recommendation was to incorporate an approach that many state departments of motor vehicles have enacted: the point system.
Fichera argues that repeat offenders pose the biggest headache to the SEC. Sound familiar? And here is where the beauty of the DMV approach can be seen. In many states, the DMV slaps unlawful drivers with points. Get a few, no big deal. Pile up too many and you'll lose your license. Hmmm.
When providers get together, they'll talk about the need to keep four stars as a way to attract both residents and managed care contracts. That's understandable, but in some ways it co-opts the point and spirit of the Five Star system. What we're seeing is that the Five Star approach is essentially prodding good operators to do “just enough” to remain competitive. It's doing little — other than delivering what amounts to public shame — to stop really bad facilities in their tracks.
A point-based system would offer a measured, transparent approach to oversight. It would help regulators better track the truly bad operators. It would let facilities know well in advance when bad habits are starting to get truly problematic. And it would give CMS more credibility as an oversight organization. In other words, it will probably never happen.