The Centers for Medicare & Medicaid Services (CMS) has unveiled a one-to-five-star rating system for nursing homes to help consumers evaluate a nursing home's quality when selecting a facility. The ratings appear on the agency's Nursing Home Compare Web site.

A five-star designation means the facility ranks "much above average," four-star indicates "above average," three means "about average," two is a "below average" ranking, with a one indicating that a facility ranks "much below average." The rankings, which will be updated monthly, are based on a nursing home's performance in three areas: quality measures, nurse staffing levels and health inspection reports.

In this first round of quality ratings, about 12 percent of the nation's nursing homes received a full five-star rating, while 22 percent scored at the low end with one star. The remaining 66 percent of facilities were distributed fairly evenly among the two, three and four-star rankings. The ratings indicate that nonprofit nursing homes deliver a higher quality of care than for-profit facilities, according to an analysis by USA Today.

When the rating system was announced earlier this year, Toby Edelman, senior policy attorney with the Center for Medicare Advocacy, said that two of three criteria CMS uses for the ratings -- staffing data and quality measures -- are "self-reported by nursing facilities and are inaccurate." Edelman said, "Relying on nursing homes to describe accurately how well they are doing . . . just doesn't make sense."

The National Citizens' Coalition for Nursing Home Reform issued a statement saying it commends CMS for providing a new tool for long-term care consumers but urging consumers to "not oversimplify nursing home selection."

"In reviewing the Five-Star rating for a particular nursing home, consumers should compare the rating with their own experience during a personal visit to the home," the Coalition warned. "For example, staffing data that is used for the rating system is based on the two weeks prior to the nursing home's annual regulatory survey, an insufficient period of time to represent the usual staffing pattern of the home. Consumers should visit the home and review staffing data that is required to be posted for every shift, every day."

San Diego Elder Law Center also recommends as a resource the California Advocates for Nursing Home Reform’s web site (www.canhr.org). 
“CANHR’s website is a valuable tool,” says attorney Phil Lindsley.” “It allows you to review the citation, infraction and complaint history for a skilled nursing facility in California, sorted by counties and cities.  They also provide the state-wide averages for those measures so you can compare how a particular facility is doing compared to others in the community. “
Lindsley notes that the CANHR site also  tells you whether or not the facility takes Medi-Cal, and what type of supplemental services they offer.  Like the new CMS site, much of the data is self reported, so CAHNR admits that there are limitations.   Unlike the new CMS site, however, CANHR does not attempt to rate facilities, but is limited to  reporting the objective data on violations and complaints, and describing the facility in terms of size, programs and services.  Together, these tool should assist families in selecting a facility, but are no substitute for a visit and first hand observation.

For its part, the nursing home industry is not pleased with the rating system. In an opinion piece in USA Today, Bruce Yarwood, president of the American Health Care Association, a long-term care industry trade group, called the new rating scheme "a complex and inaccurate system that fails to provide the consumer with an appropriate tool to measure quality of care in our nation's nursing homes."

For a CMS press release on the new rating system, click here.

For a Washington Post article on the rating system, click here.

In the recent economic downturn, many homes have lost considerable value and stock portfolios have plummeted. If this is the case for you, do you need to change your will? What if your income and assets have increased significantly? If your finances have changed markedly since you wrote your will, you should check your estate plan to see if you need to make any changes.

If your will or estate plan divides your estate into percentages for beneficiaries, then changes in value won't affect how your estate is distributed. However, if you include specific bequests in your will, a fall or rise in your estate could have consequences. For example, if your estate plan gives $50,000 to your favorite charity and the rest of your estate to your children, a reduction in the value of your estate could mean your children won't get as much as you intended.

A change in value of assets could also affect your estate plan if you intended to treat your children equally by giving them assets of equal value. For example, suppose your will gives your house worth $500,000 to your daughter and your stock worth $500,000 to your son. If the value of either the house or the stock portfolio increases or decreases significantly in value, your children will no longer receive equal gifts. It is also important to update your estate plan if the overall nature of your assets has changed. For example, if you sold the stock and bought real estate instead, this will affect the distributions to your children.

In addition, if your estate has significantly increased in value, it is important to reassess whether your estate will be subject to estate taxes. In 2008, estates worth more than $2 million are subject to federal estate taxes. In 2009, estates subject to federal taxes must be worth more than $3.5 million. After that, it isn't clear what the estate tax will be, so it is important to be prepared for any eventuality.


For more insight into Estate Planning visit us.

Congress has passed and President Bush signed legislation that temporarily suspends the penalty for seniors who fail to take the required minimum distribution from IRA and employer retirement accounts in 2009.

But the penalty freeze, which is part of the Worker, Retiree, and Employer Recovery Act of 2008, does not affect required distributions for 2008, which are hitting seniors the hardest, and some contend that the suspension for 2009 will only benefit more affluent seniors.

Since the idea of retirement accounts is to encourage taxpayers to save for retirement, there is normally a penalty for failure to withdraw once the account owner reaches retirement age -- after age 70 1/2. Taxpayers generally must begin taking annual distributions from their retirement accounts by the April 1 occurring after they reach age 70 1/2 or pay a whopping 50 percent excise tax on the amount that should have been distributed but was not. The percentage that must be withdrawn is based on life expectancy and increases each year. For someone who is 70 1/2 years old, the required withdrawal would be 3.65 percent of the total retirement account balance.

But with the stock market plunge, about $2 trillion evaporated from workplace retirement plans between October 2007 and October 2008, according to the Center for Retirement Research at Boston College. To prevent seniors from being forced to sell stocks in a down market, Congress suspended the required minimum distribution rule for 2009.

If you turned age 70 1/2 before 2009, you would normally be required to take your 2009 distribution by December 31, 2009. If you will turn age 70 1/2 in 2009, you would normally be required to take your required distribution no later than April 1, 2010. In either case, under the Act you will not need to take this distribution. The new law also waives 2009 distributions for beneficiaries of inherited IRAs and employer retirement accounts. However, taxpayers still must take their 2010 distributions no later than December 31, 2010.

Many taxpayers will be hit with a double whammy because the required withdrawals are based on a percentage of what the IRA and 401(k) portfolios were worth at the end of 2007, when the Dow Jones Industrial Average was still well into five digits. If the account is heavily invested in stocks, it could have lost 30 percent to 40 percent in the past year.

"Seniors are getting hit both ways," said Angela Foreshaw, a spokeswoman for AARP Pennsylvania. "If their retirement accounts have fallen and they have to [make mandatory withdrawals] and pay taxes on a higher amount, it's putting them in a difficult financial bind."

Some have also pointed out that the people who will benefit most from a temporary freeze in the required minimum distribution rule are the more affluent taxpayers who don't need the money in their retirement accounts for daily living expenses. Those who are less well off and need the money to live on will make withdrawals whether or not they are required to do so -- and may take a big loss in the process.

For a background article in the Pittsburgh Post-Gazette click here.

For the Washington Post article on the Treasury and IRS decision not to waive the rule for 2008, click here