On October 6, 2014, President Obama signed the Improving Medicare Post-Acute Care Transformation Act (H.R. 4994/S. 2553) (“IMPACT Act”) into law. The IMPACT Act calls for improved and streamlined quality measures for nursing homes, home health agencies, long-term acute care hospitals, and other post-acute providers participating in Medicare. The new legislation will change, among other things, (1) what information the participating providers must collect and report; (2) the information that will be available to the public about the providers; and (3) the method of determining future Medicare payments for services rendered. In summary, the law and its changes are designed to increase quality and accountability by increasing the frequency of surveys for participating providers and restructuring quality measures and reporting obligations for post-acute care providers in general.

In addition to signing the IMPACT Act, President Obama also announced new executive initiatives to improve the quality of care provided to Medicare beneficiaries. Specifically, there will be a concentrated effort to expand and strengthen Medicare’s “Five Star Quality Rating System” for nursing homes (“Nursing Home Compare”). Nursing Home Compare offers the public a comprehensive overview and rating of the quality of care and services provided by over 15,000 nursing homes throughout the United States. The rating is based upon measures such as on-site inspections and surveys, prevalence of ulcers, use of restraints, the extent of injurious falls, and information about the staffing levels in nursing homes.

In the past, the providers self-reported data regarding the staffing levels at the facilities, and, as a result, the Centers for Medicare & Medicaid Services (“CMS”) has been concerned because the reported information regarding those staffing levels has been difficult to verify. In response to this concern, CMS now intends to electronically collect quarterly staffing information from the provider’s payroll system. This method of data collection will ensure accuracy and also allow CMS to analyze how staffing levels fluctuate throughout the year. Additionally, it is intended to allow the public to have more information regarding staffing levels and allow the facility leadership to have better data by which to improve staffing and quality of care. CMS will roll out a pilot reporting system during FY2015 and will encourage providers to participate in this voluntary phase. Nationwide mandatory reporting by all nursing homes is expected to be in place by the end of FY2016.