According to recent research, Traditional Medicare beneficiaries are more likely admitted to higher quality SNFs than those served by low quality MA plans, which utilize SNFs reporting the poorest performance.
Ratings are still a useful resource when looking to invest or form partnerships, but the system has its weaknesses and stakeholders are taking note. Quoted in Skilled Nursing News, director of asset management at CareTrust REIT, Eric Gillis said, “the Five-Star rating, it’s not a true representation for how good a facility is — and in fact we see a lot of one- and two-star buildings that are very profitable.”
Researchers from Brown University measured SNF quality using CMS star ratings and hospital readmissions. According to the researchers star ratings are primarily indicative of safety measures rather than quality of life measures and that little evidence exists that a 4-star SNF produces better patient outcomes than those with 3-stars.
According to Open Minds, as of the fourth quarter of 2017, Medicaid represented 49.3% of all revenue for skilled nursing facilities (SNFs). Fee-for-service Medicare represented 22.8% of revenue, managed Medicare represented 9.5% of revenue, and private pay represented 8.3%. Medicaid rates averaged $206 per beneficiary per day. Medicare rates averaged $513 per beneficiary per day, and managed Medicare rates averaged $433 per beneficiary per day. Private pay rates averaged $257 per person per day. As of the fourth quarter, 66.2% of all SNF resident patient days were attributed to Medicaid.
Read more about MA plans and low quality nursing facilities and the recent research findings from Forbes.
Sometimes a SNF may receive a lower rating because it is too green and does not have enough time to get a higher rating, or it is in a tougher regulatory region compared to others.
Buyers and investors look to the Centers of Medicare and Medicaid Services (CMS) star ratings as an important measurement of how a skilled nursing facility (SNF) is performing compared to others. The full story however, is not in the rating. Increasingly, facilities with lower ratings still have a high profitability and reap positive outcomes with patients.
Getting a high star rating is no longer enough to convince investors.
To read more about what investors are looking for visit Skilled Nursing News.