Medicare Requirements for Skilled Nursing Facilities

Medicare Requirements for Skilled Nursing Facilities

In order to provide the best service to your clients, it is necessary to know Medicare Requirements for skilled nursing facilities. The nursing home reform law, the Omnibus Reconciliation Act of 1987 (OBRA ’87), and Advancing Excellence in America’s Nursing Homes (a campaign launched by a coalition of consumers, health care providers, and nursing home professionals), as well as other campaigns serve as the foundation for the Medicare Five-Star Quality Rating System.

In order to assess the rating of a skilled nursing facility, three sources of data are used:

  • Health and fire inspections
    Conducted by trained inspectors annually; more frequently if performance is poor.
    Inspections from the last three years are included; weighted so that the emphasis is on more recent inspections.
  • Staffing
    Assessed annually.
    RN and total staffing hours per resident per day used for calculations.
  • Quality measures
    Averaged quarterly.

Each of the three sources of data receives a rating from one to five, and then the ratings are combined to calculate the rating of the skilled nursing facility.

Health Inspections, Fire Inspections, and Complaints

Skilled nursing facility inspections determine if the facility is meeting the Life Safety Code standards set by the National Fire Protection Association. If skilled nursing facility does not meet the specified standards, a deficiency citation is issued indicating the severity of the deficiency. For any deficiency regarded as immediate jeopardy – a situation that is likely to or has caused serious harm, injury, impairment, or death to a resident – the skilled nursing facility must take immediate action to remove the deficiency. If the skilled nursing facility does not comply within the time set by Medicare, it is terminated from the Medicare program 23 days from the end date of the inspection.


The number of staff required in a skilled nursing facility is dependent on the care needs of the residents. In order to assess the specific staffing of a particular skilled nursing facility, Medicare uses the quality of care needed as determined by an individual’s Minimum Data Set assessment or RUG (Resource Utilization Group). The formula is:

Hours adjusted = Hours reported / Hours expected * Adjustment Factor

The adjustment factor includes state and/or national averages of hours per resident and varies over time.

Staffing data is reported only once per year and only reflects the facilities staffing for a two week period. The number of staffing hours per resident is only an average, and neither reflects the amount of care given to each individual resident nor shows the number of staff present at a particular time of day.

Quality Measures

To assess quality, Medicare uses information on all residents, whether their payment method includes Medicare of not. The Long Term Care Minimum Data Set (MDS) or each resident includes health information, general well-being, mental status, and physical functioning. Skilled nursing facility staff collects the information. Forms for the MDS are completed for residents when they are admitted and scheduled throughout their stay. Such information as vaccinations, medications, and resident mobility is included in the residents’ MDS. This data helps Medicare determine:

  • The amount the nursing home will receive each day from Medicare Part A to pay for the stay.
  • The staffing level expected for the resident.

Medicate designated deficiencies are common. Skilled nursing facilities are required to meet over 180 regulatory standards, covering many areas such as medication management, food storage and preparation, and residential protection against neglect and abuse. The average deficiencies for skilled nursing facilities are more than three deficiencies per month, as it is very difficult to meet all the standards adequately.

At Connected Risk Solutions, we understand the Medicare requirements for skilled nursing facilities. In addition, we can help you provide the unique skilled nursing facility coverage requirements for clients you serve. Please call us at one of our offices in Chicago at 847-832-9100, Lansing at 517-676-7100 or Phoenix at 847-832-9099.

About Connected Risk Solutions

At Connected Risk Solutions, we provide our agent partners with bold solutions for comprehensive insurance and risk management that are unmatched in the industry. We have market connections and collective decades of industry experience, including deep specialization in healthcare liability and managed care E&O, cyber and tech liability, management and professional liability, as well as captive management and risk management. We strive to develop creative solutions no other wholesaler can match and to help our agent partners give their clients the ability to achieve continued growth while simultaneously protecting against loss.

Our specialists, located in offices throughout the country, are responsive and engaged. To learn more, connect with us.

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