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 ratings on its Care Compare website. Although the rating system provides useful information for consumers, it is also subject to manipulation by nursing homes to give themselves higher ratings than they actually deserve. The Center for Medicare Advocacy recently identified a particularly egregious example.
But first, an explanation of how the system works.[1] The complex rating system has three separate domains – health inspections (based on unannounced complaint and “standard” (annual) surveys conducted by state health departments), staffing (based on electronically-submitted payroll-based information), and quality measures (based largely on self-reported resident assessment information, which are not audited or edited, along with some claims-based measures). 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). CMS risk-adjusts some of the quality measures based on resident assessments (called MDS), but it does not audit or edit these measures before reporting them on Care Compare. The HHS Office of Inspector General (OIG) has reported that the falls measure is inaccurate; nursing homes’ resident assessments fail to report 43% of falls with major injury and hospitalization.[2] OIG just reported that nursing homes intentionally falsify residents’ medical records to add diagnoses of schizophrenia;[3] such diagnoses protect facilities from scoring poorly on the quality measures for antipsychotic drug use. Not surprisingly, it is in the quality measure domain where manipulation most often occurs.
Manipulation of star ratings is a longstanding issue, however. More than a decade ago, in 2014, The New York Times reported in “Medicare Star Ratings Allow Nursing Homes to Game the System,”[4] that facilities manipulated the two domains that were self-reported at the time – staffing and quality measures – to get higher overall ratings:
The Times analysis shows that even nursing homes with a history of poor care rate highly in the areas that rely on self-reported data. Of more than 50 nursing homes on a federal watch list for quality, nearly two-thirds hold four- or five-star ratings for their staff levels and quality statistics. The same homes do not fare as well on the sole criterion that is based on an independent review. More than 95 percent of the homes on the watch list received one or two stars for the health inspection, which is conducted by state workers. [bold font supplied]
Manipulation of the quality rating system continued and continued to be reported.[5]
The Egregious Example
The Center recently looked at 34 facilities in New Jersey, part of a national chain with 85 nursing homes.
Staffing: 20 of the 34 nursing homes had two stars (below average) in staffing domain
Quality measure: 25 of the 34 nursing homes had five stars (much above average) in quality measures domain
Overall ratings: 20 of the 25 nursing homes with five stars in quality measures, including 18 nursing homes with two stars in staffing and two nursing homes with one star in staffing, got an extra star in their overall ratings; only 5 of the 25 nursing homes with five stars in quality measures had “average” star ratings in staffing (three stars)
Overall ratings: With the extra star resulting from the quality measure rating boost, five facilities’ overall ratings became three stars (“average”), nine facilities’ overall rating became four stars (“above average”), and six facilities’ overall ratings became five stars (“much above average”). Three facilities were boosted to three stars (“below average”)
It is implausible that facilities with inadequate staffing provide high quality care to residents. It is unfair to the public to allow facilities to boost their overall ratings by reporting resident assessment information that gives them high quality measure ratings.
The Center has long believed that self-reported quality measures should not be included in CMS’s public rating of nursing homes. The egregious example discussed above dramatically proves the point.
March 19, 2026 – T. Edelman
[1] See CMS, Design for Care Compare Nursing Home Five-Star Quality Rating System: Technical Users’ Guide (Jan. 2026).
[2] HHS Office of Inspector General, Nursing Homes Failed To Report 43 Percent of Falls With Major Injury and Hospitalization Among Their Medicare-Enrolled Residents, OEI-05-24-00180 (Sep. 2025).; see also HHS Office of Inspector General, Data Snapshot, Serious Falls Resulting in Hospitalization Among Medicare-Enrolled Nursing Home Residents, July 2022-June 2023, OEI-05-24-00181 (Sep. 2025).
[3] OIG, “Nursing Homes Inappropriately Diagnosed Residents with Schizophrenia to Mask the Misuse of Antipsychotic Drugs,” OEI-02-23-00201 (Issue Brief, Mar. 2026).
[4] Katie Thomas, “Medicare Star Ratings Allow Nursing Homes to Game the System,” The New York Times (Aug. 24, 2014).
[5] Katie Thomas, Robert Gebeloff and Jessica Silver-Greenberg, “Phony Diagnoses Hide High Rates of Drugging at Nursing Homes,” The New York Times (Sep. 11, 2021; updated Mar. 2024); Robert Gebeloff, “Uncovering Truths With Missing Data,” The New York Times (Dec. 23, 2021).