Government incentives and public interest remain too minor to push nursing homes toward quality improvement. That’s one reason the federal government should reconsider how it rates facilities in its Five-Star system, a key advisory group said in its report to Congress Thursday.

The Medicare Payment Advisory Commission will likely take up the Five-Star issue in the near future, saying a possible new line of work could be a search for alternative designs that “elevate the role of staffing in calculating the overall rating of NHs.”

Members had sharply criticized the Centers for Medicare & Medicaid Services’ rating system and its inclusion on what they said is an underused Care Compare website at their April meeting. They argued that both the nursing home Value-Based Purchasing program and Quality Reporting measures incorporated into Five-Star have failed to drive true quality improvement.

Among its criticisms Thursday, MedPAC reiterated that the ratings can be gamed because they largely rely on self-reported patient-assessment items and do not include measures of patient and family satisfaction.

“One potential area of future work is to consider alternative designs of the overall rating of a nursing home,” the commission wrote Thursday. “Given the clear relationship between staffing and quality and the availability of good staffing data, the staffing domain could play a larger role in determining a nursing home’s overall rating.”

The report also called out ongoing survey concerns and said that a ratings system that relies on outdated information doesn’t deliver real insights to consumers, even the few who know they can use Care Compare to consider quality benchmarks.

“The quality of care provided in many nursing homes is a long-standing problem,” MedPAC Executive Director Paul Masi said during a media briefing Wednesday. “In recent years, CMS has made several improvements to that [Value-Based Purchasing] program, but it still has design flaws that would require congressional action to address, such as incentives that are too small to change behavior.”

One program that does seem to be driving improvements, said MedPAC, is the Institutional-Special Needs Plan offered through Medicare Advantage. Masi said they now cover 12% of nursing home patients on Medicare.

The plans typically increase the use of physicians and nurse practitioners in nursing homes to deliver more preventative care, monitor more fully for changes and reduce the number of members who need acute care.

The plans also reimburse nursing homes “in ways that encourage facilities to deliver more on-site care,” Masi said.

“Available evidence suggests that I-SNPs reduce in-patient care use and emergency department visits, and that they perform better on some quality measures,” he added. “However, the evidence is somewhat limited and there is little information on important areas such as patient experience.”

After peaking at 39 insurers in 2021 and 2022, the number of companies that offer I–SNPs fell to 32 in 2025, MedPAC reported. Enrollment in provider-sponsored plans has continued to grow as more nursing homes — more than 3,700 in 2023 — now participate.

Still, given generally low beneficiary enrollment in I-SNPs, MedPAC said it would likely take up an examination of factors that limit their use and consider potential policy changes that reduce barriers to expansion, while enabling more rigorous measurement and oversight of I–SNPs.