CMS’s Nationwide Risk-Based Survey Era Starts Today

At a recent SNF sector gathering, leading Zimmet Healthcare Services Group and industry thought leaders issued a priority checklist for banks and investors on the key issues facing long-term care providers, including the nationwide rollout of CMS’s Risk-Based Surveys (RBS), which starts today, Sept. 8.

The Centers for Medicare and Medicaid Services (CMS) on July 16 introduced a more streamlined review process for higher-performing nursing homes as well as an easier way for consumers to discover them when searching the CMS website through a new icon.

The Quality, Safety, & Oversight (QSO) Memo outlines this RBS process that CMS says strategically directs state agencies’ limited resources where they are needed most — by focusing fewer resources on the nation’s higher-performing nursing homes so states can address issues in nursing homes where residents’ health and safety are at greater risk.

CMS noted that to identify these higher-performing facilities, the agency will place an icon on the Care Compare tool on Medicare.gov.

Primer Says?

On what this change means to providers, and what banks and investors should chart, the primer includes the following highlights:

- CMS is fundamentally changing how it deploys survey resources.

- This is not simply a survey process change.

- It represents a new public designation for high-performing facilities, a shift toward risk-based oversight, another indicator of organizational stability, and a potential new due diligence consideration.

- Approximately 12 percent of nursing homes are expected to qualify initially.

On why banks and investors should care, the primer authors said it is important to note that RBS qualification is not just regulatory, but instead reflects characteristics associated with operational excellence:

- Consistent survey performance

- Staffing stability

- Compliance infrastructure

- Reporting integrity

- Lower regulatory volatility

Those characteristics, they said, often correlate with lower operational risk.

What Actually Changes with RBS?

In asking what the differences are between a traditional survey and RBS, the primer said the traditional survey is a full resident sample, deploys a larger survey team, and accounts for full survey activities.

Under RBS, there is a smaller resident sample, fewer surveyors, and around 50 percent less onsite time. There is also a streamlined review.

What stays the same? Requirements for Participation are unchanged. Every nursing home is still surveyed at least every 15 months, and complaint investigations remain the same.

The potential impact on credit risk includes the possible positives of fewer disruptive survey events, lower likelihood of major enforcement actions, more predictable operations, stronger reputation, potentially stronger referral relationships, and potentially stronger census stability, the primer said.

The primer said every lender should be asking the following questions:

- Is the facility currently eligible?

- If not, why? Which criterion failed?

- Was disqualification caused by: survey deficiencies? staffing? ownership change? reporting issues? complaint activity?

- Can management realistically qualify within 12–24 months?

Key Takeaways:

1 - These are targeted surveys and are not part of any reduced oversight.

2 – Around 12 percent of nursing homes nationally will qualify.

3 - The new CMS designation adds another publicly visible indicator of sustained operational performance.

4 - RBS status may signal regulatory stability—but banks and investors should always interpret it alongside financial performance, occupancy, payer mix, staffing, quality measures, and compliance history.

Examples of Reasons a Facility Would Not Qualify for RBS:

1. Less than a 5-Star Overall Rating

2. Less than 3-star Staffing Rating

3. Any citation(s) for Actual Harm, or Immediate Jeopardy (IJ), or Substandard Quality of Care (SQC) in the last survey cycle (the last standard survey and any complaint investigations in the last year)

4. More than 18 months without a standard survey

5. Any staffing waivers in effect

6. Failed Payroll-Based Journal (PBJ) staffing data audit

7. Failed resident assessment Minimum Data Set audit (MDS)

8. Health Inspection Score higher than the 50th percentile in the state (lower scores indicate better performance)

9. Two or more residents aged 65 or older who are coded with a diagnosis of schizophrenia after being admitted without this diagnosis

10. A change in ownership since the last standard survey

11. Special Focused Facility Candidate

The primer was written by: Steven Littlehale, chief innovation officer, Zimmet Healthcare Services Group; Jay Gormley, chief investment officer and COO, Advisory, Zimmet Healthcare Services Group; and J.J. Rabinowich, founder and executive director, The Ambassador Group and author of the weekly SNF Digest on Park Place.

Comments or questions? Contact Patrick Connole at pconnole@parkplacelive.com.