How the CMS Five-Star Rating Actually Works

The three ratings behind the Overall Star

Care Compare shows one overall star, but underneath it are three separately calculated ratings. Looking at each one separately explains why a facility received its Overall rating and what would need to change to improve it.

1. Health Inspections, the backbone

This rating comes from on-site surveys over approximately the previous three years: standard recertification surveys plus any complaint investigations. Deficiencies are scored by their scope (how many residents were affected) and severity (how much harm), and more recent surveys carry more weight than older ones.

The biggest difference from the other two ratings: CMS ranks facilities only against others within the same state and sorts them into five bands. Inspection stars are meant for in-state comparison rather than comparing facilities nationwide, so a 3-star in a tough-surveying state is not the same as a 3-star elsewhere.

2. Staffing, from PBJ data

The staffing rating is calculated from Payroll-Based Journal (PBJ) data, the actual payroll-verified hours facilities report each quarter. CMS looks at case-mix adjusted staffing hours per resident day (with extra weight on registered-nurse time), which accounts for how sick the residents are, and it also factors in weekend staffing and turnover. Those measures are folded into the staffing rating rather than shown as separate stars.

Unlike health inspections, staffing uses national thresholds. A facility with too many days without a registered nurse on site can be knocked down sharply.

3. Quality Measures, from MDS and claims

This rating draws on resident assessments (MDS) and Medicare claims, across a set of short-stay and long-stay measures such as mobility changes, pressure ulcers, falls with injury, antipsychotic use, and return trips to the hospital. Like staffing, it is scored against national thresholds.

How the three combine into one star

CMS starts with the Health Inspection star, then adjusts it. Staffing and Quality Measures each work the same way: only a 5-star rating in that domain adds a star, and only a 1-star rating removes one. A 2, 3, or 4-star rating in staffing or quality does not move the overall on its own.

• A 5-star Staffing rating adds one star; a 1-star Staffing rating removes one.
• A 5-star Quality Measures rating adds one star; a 1-star Quality Measures rating removes one.
• The overall result is capped at 5 and floored at 1.
• If the Health Inspection rating is 1 star, the overall rating can move up by at most one star no matter how strong staffing and quality are, so the most it can reach is 2 stars.

Because inspections anchor the calculation, weak survey performance is difficult to overcome with staffing and quality alone.

What people often miss

These are the details that trip up operators reading their own rating:

• Certain abuse-related citations can cap the rating. They can cap a facility’s Health Inspection or Overall rating regardless of how strong staffing or quality performance is.
• Ratings can lag the data. A rating may not change right after new survey, PBJ, or MDS data become available, because each component updates on its own schedule and CMS sometimes carries values forward between refreshes.
• Inspection stars are in-state only. Because they are ranked within a state, comparing inspection stars across states can mislead.