Evidence debunks the common nursing home complaint that the enforcement system is punitive. In fact, enforcement is, more typically, weak. A recent example in Indiana illustrates the point. Despite identifying 25 of a chain’s 30 nursing homes in Indiana as providing “below average” or much below average” care to residents, the state rarely called for federal penalties to be imposed.
Care Compare
Since 2008, the Centers for Medicare & Medicaid Services (CMS) has rated nursing homes using a five-star quality rating system (with five stars being the highest and best performance). CMS publicly reports the star ratings as well as two enforcement remedies (civil money penalties and denials of payment for new admissions) on its Care Compare website.
The complex rating system has three separate domains, each with a separate scoring protocol.[1] Health inspections (based on unannounced complaint and standard (annual) surveys conducted by state health departments) are scored on a statewide basis. This scoring method means that nursing homes are compared only to other facilities in the same state. In addition, all states assign fixed percentages of stars to their states’ facilities. As a result, every state has the same percentage of facilities in each of the five-star health inspection ratings.[2] In contrast, ratings for staffing (based on electronically-submitted payroll-based information) are based on assigned points for the specific components of the measure, compared with national staffing data.[3] Ratings for quality measures (which are based largely on self-reported resident assessment information that is neither audited nor edited, along with a limited number of Medicare claims-based measures) are also based on assigned points, but there is no state or national comparison and no limit as to how many facilities can be assigned each star rating.[4]
Facilities also have an overall rating, which begins with the inspection rating and can be adjusted upwards by one star (for facilities receiving five stars in staffing or quality measures) or downwards by one star (for facilities receiving one star in staffing or quality measures). As the Center for Medicare Advocacy recently demonstrated in a March 19, 2026 Alert “Quality Measure Ratings for Nursing Homes Fraudulently Boost Overall Ratings,” nursing homes manipulate the quality measure domain to boost their overall ratings on Care Compare.
Care Compare also shows that enforcement occurs infrequently against nursing homes that provide the poorest quality of care.
Under the federal enforcement system, state survey agencies recommend federal enforcement actions to the Centers for Medicare & Medicaid Services (CMS), which officially imposes sanctions against facilities that participate in Medicare. At present, almost all facilities participate in Medicare. CMS nearly always follows the state recommendations about sanctions. The imposition of limited enforcement actions in a state generally means that the state itself has recommended limited enforcement to CMS.
Case example
The Center for Medicare Advocacy recently looked at 30 nursing homes in Indiana, which are part of a national chain with 69 facilities. As shown below, the 30 nursing homes have low ratings in health inspections (25 of the 30 facilities are “below average” (two stars) or “much below average” (one star)) and even lower ratings in staffing (28 facilities have one or two stars and only two facilities have three stars (“aerage”)), while their quality measure ratings are considerably higher (18 have four or five stars, above average or much above average, respectively). Overall ratings largely reflect the poor ratings in health inspections, although six facilities’ overall ratings are boosted by one star because of their 5-star quality measure ratings.
Star ratings, by domain, for 30 Indiana nursing homes in a national chain
Low ratings for health inspection and staffing, high ratings for quality measures
Despite the poor ratings in health inspections and staffing, only five facilities in Indiana (all one-star in health inspections and one or two stars in staffing) had any civil money penalties imposed. None of the 30 nursing homes had denial of payment for new admissions imposed.
Five Indiana nursing homes with civil money penalties
Conclusion
Enforcement needs to be effectively used and significantly strengthened. The largely for-profit nursing home industry may more seriously respond to deficiencies when the consequences of deficiencies are financial penalties. However, unless penalties are higher than the cost of compliance, nursing homes may simply consider penalties the cost of doing business.[5]
April 9, 2026 – T. Edelman
[1] CMS, Design for Care Compare Nursing Home Five-Star Quality Rating System: Technical Users’ Guide (Jan. 2026).
[2] Id. 5-8.
[3] Id. 16-17.
[4] Id. 22-24.
[5] Patrick Schumacher, Rockefeller Institute of Government, Just a Slap on the Wrist? The Role of Civil Money Penalties in the Regulation of Nursing Homes (Policy Brief, Mar. 2026), finds that civil money penalties (CMPs) were the most common penalty, reflecting 74% of enforcement actions in 2023, but that CMPs reflected less than 1% of facilities’ revenues. The average per day CMP in 2023 was $30,720; the average per instance CMP, $10,170.