The nursing home industry, which lobbied against the ratings, later largely embraced them. An industry trade group, the American Health Care Association, offers members a free service that helps companies track their star rating; it says the rising scores are evidence that quality is improving.
Some advocates say the rating system is the best resource available. "I think it's imperfect, but it's by far the most valuable tool for people," said Richard J. Mollot, executive director of the Long Term Care Community Coalition.
Other patients' groups consider the ratings so inflated that they no longer support their use and have found them helpful only in weeding out the worst-performing homes.
"They've given a false sense of security to the public," Carole Herman, president of the Foundation Aiding the Elderly, a Sacramento patients' rights group, said.
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One of the simplest ways to inflate a score, according to interviews with academics and groups that monitor the process, is through the staffing measure. Nursing homes get an extra star on their overall rating if they score a four- or five-star rating on staff levels.
In 2009, only 39 percent of nursing homes had a four- or five-star rating for staff levels. By 2013, 52 percent did.
The staff rating is based on a form that a home completes once a year, at the time of the annual inspection. Homes often know when an inspection will occur, and many of them have learned to add workers in the period leading up to it.
The inspection period is so crucial that in 2010, an administrator at a home on Long Island described it as "our Super Bowl" and explained that staff levels would drop once the inspection was completed. "The staffing hours will be a little high for this week but will drop the following week," David Fielding, the administrator of the home, the Medford Multicare Center for Living, wrote in an email, which was excerpted in a lawsuit filed this year against the home by the New York State attorney general.
Since 2008, more than a dozen employees at the Medford home have been convicted on charges of patient neglect and falsification of records. In June, nine more were indicted on a range of charges related to the death of a 72-year-old woman, Aurelia Rios. Medford nonetheless holds a three-star, or average, rating from Medicare and a four-star rating for its health inspection, and state health workers reported no deficiencies during the home's most recent health inspection last August.
A provision of the Affordable Care Act of 2010 requires Medicare to use payroll data to verify the accuracy of staff levels, but the agency has not begun to follow the requirement. The agency said it was still working on the verification system and hoped to have it running soon.
The other major part of the ratings that is not checked by Medicare, the so-called quality measures, is also susceptible to manipulation. The score in this area is based on data collected by the home about every patient, such as whether bedridden or wheelchair patients are developing bedsores and how many residents experience serious falls.
Nursing homes receive an extra star on their overall rating if they get five stars in this area. The number of nursing homes with five stars in quality measures has increased significantly since the beginning of the program, to 29 percent in 2013 from 11 percent in 2009.
"They need to spot-audit those, but they haven't done it," said Charlene Harrington, a professor emeritus at the University of California, San Francisco, School of Nursing, who is an expert on nursing home staffing.
Federal officials acknowledged that the quality measures rating needed improvement and said they were testing an auditing program that they hoped to expand nationally. The agency also plans to consider additional metrics, such as the number of residents being given antipsychotic drugs.
Dr. David Gifford, senior vice president of quality and regulatory affairs at the American Health Care Association, the nursing home trade group, says the ratings have had a positive effect on the industry. "I think it's helped move us all along in the right direction," he said, adding that any suggestion that facilities were manipulating their ratings was far-fetched. "I have not seen any evidence of that or heard any evidence of it," he said.
A five-star pursuit
Few have pursued top ratings with more zeal than North American Health Care, which operates Rosewood and 34 other nursing homes scattered across California and three other Western states. Each of the chain's nursing homes has a five-star rating, and the company maintains a team of more than 30 nurses who conduct mock inspections to ensure the homes perform well. In recent years, the chain has awarded $50,000 bonuses to nursing home administrators who achieve or maintain a five-star rating.
"It's everything to us," Mr. Sorensen, the chief executive of North American, said. "If you create a product that people can trust and admire, the profits that you hope for — they follow as a result of excellence."
Despite the chain's exemplary performance in the Medicare ratings, Rosewood is not the only one of its homes to have had problems that are not reflected in the score. State inspectors concluded that staff at another home, Chatsworth Park Health Care Center in Los Angeles, neglected in 2010 and 2011 to properly care for a man with Parkinson's disease who developed malnutrition and extensive bedsores, which typically occur because of substandard care, and later died.
At another of the chain's nursing homes, the Grand Terrace Care Center near San Bernardino, Calif., the staff failed in 2010 to properly care for a woman with diabetes and other conditions. The coroner ruled that her death was due in part to a urinary tract infection and bedsores that had become so bad, they had developed gangrene and were infested with maggots, according to a state report about the case.
In 2010, when both episodes took place, Chatsworth carried an overall rating of three stars, and Grand Terrace was rated four stars. Both now hold five-star ratings.
Mr. Sorensen said his staff disputed the facts in these cases, and he maintained that the residents received good care.
Neither case shows up on the Medicare website. Until recently, California often refused to cite nursing homes for federal-level violations, the only type that counts toward a star rating. State workers are responsible for enforcing both state and federal laws governing nursing homes. A spokesman for the California Department of Public Health said the state was now doing so.
Dr. Conway, of the Centers for Medicare and Medicaid Services, said his agency worked hard to make sure states were enforcing federal law but acknowledged that there had been problems. "We are aware of some issues with states," he said, adding that the federal website warned consumers that state actions were not listed there. Still, he said, "the goal would be not to have that gap."
North American is also under investigation by the office of the inspector general for the federal Health and Human Services Department. Mr. Sorensen declined to say what the investigation entailed, and a spokesman for the inspector general's office would not comment. It is not publicly known whether the investigation relates to care.
Ed Dudensing, a Sacramento lawyer who has represented several clients against the chain's homes, including Rosewood, said he had deposed more than 30 current and former employees of North American Health Care in recent years. Based on those interviews, he said, "I strongly disagree with the suggestion that its nursing homes are five-star quality."
Mr. Sorensen said the lawsuits against Rosewood were without merit. "We're in this business because we want to do the right thing for our patients," he said. "That is our agenda."
In 2012, nearly all of North American Health Care's nursing homes held four- or five-star ratings for staff levels, an outcome that Mr. Sorensen attributed to the company's investment in quality workers.
Nevertheless, an analysis by The Times of 2012 staffing data reported by North American's nursing homes in California shows that the company consistently reported higher levels of staffing to Medicare than it reported to Medi-Cal, California's health care program for the poor, which audits the data.
The chain's 29 homes in California reported staff levels to the federal government that were on average 23 percent higher than what they reported to the state in 2012, the most recent year for which state data were available. Statewide, California nursing homes reported levels to Medicare that were 15 percent higher than what they reported to Medi-Cal.