California sues nursing home chain, saying it manipulated ratings system

California prosecutors sued the country’s largest chain of senior living communities on Monday, accusing the company, Brookdale Senior Living, of manipulating the federal government’s nursing-home ratings system.

The lawsuit was filed by California Attorney General Xavier Becerra and other prosecutors against Brookdale, which operates multiple nursing homes in the state.

The lawsuit is among the first of its kind to accuse nursing homes of submitting false information to Medicare’s ratings program. The system assigns stars — one being the worst, five being the best — to the nation’s more than 15,000 nursing homes.

The system is powered by largely unaudited data submitted by nursing homes, including the amount of time that nurses spend with residents, and in-person examinations by state health inspectors.

Since its rollout more than a decade ago, the rating system, overseen by the U.S. Centers for Medicare & Medicaid Services, or CMS, has become an essential tool for nursing homes to woo potential customers. It can mean the difference between a nursing home making or losing money.

The lawsuit, brought in Superior Court in California, comes on the heels of a New York Times investigation that found the rating system is broken. The Times found that much of the information that nursing homes, including Brookdale’s, submit to the government is wrong, painting a badly distorted picture of the quality of care at many homes.

In the case filed Monday, the California prosecutors said that until April 2018, Brookdale won “undeserved higher star ratings” by submitting false information about its staffing. In particular, the lawsuit said, the company exaggerated the number of hours that registered nurses worked.

The prosecutors said that Brookdale continued to game the statistics even after CMS improved the way it collected staffing data in an attempt to crack down on nursing homes’ inflating their figures. Starting in 2018, CMS began using payroll records, which logged nurses’ daily hours, to calculate the homes’ ratings, rather than relying on nursing homes to report the amount of time nurses spent with patients. Prosecutors accused Brookdale of “falsifying its payroll-based journals.”

Heather Hunter, a spokeswoman for Brookdale, strongly denied on Monday that the company had “engaged in intentional or fraudulent conduct.”

President Joe Biden nominated Becerra, whose office brought the case against Brookdale, for secretary of Health and Human Services, which oversees CMS. The Senate has not yet voted on the nomination.