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CMS Five-Star Ratings by Ownership Type: Nonprofits Average 3.55 vs For-Profit Corporations 2.90

CMS Five-Star averages by ownership type across 14,710 facilities, from nonprofit church-related homes to for-profit LLCs.

According to the federal National Provider Identifier Registry (CMS NPPES), PlainDoctor compiles more than 7 million U.S. healthcare-provider records, a registry maintained since May 2007, adding Medicare Part D prescribing from 2023 and CMS MIPS quality scores where reported, which you can search and compare; our methodology documents every federal source.

Research period:

Research Question

Do nursing homes run by nonprofits and government agencies earn higher quality ratings than those run for profit? We measured the CMS Five-Star overall rating across every ownership category, covering 14,710 nursing facilities in 53 states and territories, to see how a facility's ownership structure tracks with the score families rely on when choosing care.

Methodology

We used the 2024 release of the CMS Care Compare Provider Information file, which covers nursing homes including those that provide rehabilitation services. CMS assigns each Medicare- and Medicaid-certified facility an overall star rating from one to five, blending results from health inspections, staffing levels, and quality measures. For this analysis we grouped all rated facilities by their reported ownership category, then averaged the overall star rating within each category. Facilities without an overall rating were left out so they would not skew the averages. The result is a like-for-like comparison of average quality across the eight main ownership types, from large for-profit chains to small government-run homes.

Findings

Nonprofit and government homes sit at the top of the rating scale

The clearest pattern in the 2024 data is a steady gap between mission-driven operators and commercial ones. Government and nonprofit facilities cluster near the top of the overall star scale, while for-profit operators dominate the bottom. State-run homes lead the field with an average overall rating of 3.72 stars, edging out church-related nonprofits at 3.71. Both groups are small, but their scores are consistent enough to put real distance between them and the largest commercial chains.

Nonprofit corporations, by far the largest nonprofit category, average 3.55 stars across 2,295 facilities. That is a meaningful number because it is not a boutique sample. It represents a broad slice of the nonprofit sector performing well above the for-profit norm. Smaller nonprofit categories follow the same trend, with nonprofit homes classified as "other" averaging 3.45 stars across 330 facilities. CMS Care Compare, Provider Information, 2024 Together these groups show that nonprofit ownership, whether religious, corporate, or independent, tends to land on the higher half of the rating scale.

For families, the takeaway is practical rather than ideological. A facility's tax status does not guarantee good care, but on average a nonprofit or government home in 2024 carried a higher CMS rating than a comparable for-profit home. When two facilities are otherwise similar in location and services, ownership is one more signal worth weighing alongside the inspection history and staffing detail on each home's profile.

The largest for-profit categories average below three stars

The bottom of the scale tells the more sobering half of the story. For-profit limited liability companies, the single largest ownership category in the dataset, average just 2.68 stars across 4,765 facilities. For-profit corporations are close behind at 2.90 stars across 4,906 facilities. These two groups alone account for roughly 9,700 homes, meaning a large share of the entire industry rates below the three-star midpoint.

Other commercial structures fare little better. For-profit individually owned homes average 2.74 stars across 661 facilities, and for-profit partnerships reach 3.00 stars across 405 facilities. The contrast with nonprofit corporations is stark. A nonprofit corporation home averages 3.55 stars while a for-profit corporation home averages 2.90, a difference of roughly two-thirds of a star on a five-point scale. CMS Care Compare, Provider Information, 2024

Why does this gap matter when you are standing in a lobby deciding where to place a parent? A star rating compresses inspection findings, staffing hours, and clinical outcomes into a single number, and the ownership pattern suggests that financial incentives shape that number at scale. It does not condemn any one facility, but it does tell families to look harder at the underlying inspection and staffing data when a home is part of a large for-profit chain.

The ownership gap is wide enough to notice in a single ranking

Lining the categories up from best to worst makes the divide impossible to miss. State government homes at 3.72 stars and church-related nonprofits at 3.71 stars sit at one end. For-profit LLCs at 2.68 stars and individually owned for-profit homes at 2.74 stars sit at the other. The spread between the highest and lowest category averages exceeds a full star, which is a large difference on a scale that only runs from one to five.

The volume of facilities in each group sharpens the point. The high-rated leaders are small, with state homes numbering 153 and church-related nonprofits 284. The low-rated for-profit LLC and corporation groups are enormous by comparison. So the homes most likely to earn four or five stars are relatively scarce, while the homes most likely to fall short are the ones a family is statistically most likely to encounter. That imbalance is the heart of why ownership type belongs in any serious nursing home search.

None of this means a top rating is unreachable in the commercial sector or guaranteed in the nonprofit one. Plenty of for-profit homes earn five stars, and some nonprofits stumble. The averages describe the field, not any individual home. Used well, they tell you which direction the odds lean and where to apply extra scrutiny. You can compare facilities directly on the nursing home browser or drill into any state to see how local ownership patterns play out.

What this analysis cannot tell us

These averages compare ownership categories, not individual facilities, and they cannot tell you whether a specific home near you is safe. A category average smooths over enormous variation. Within the for-profit LLC group there are excellent homes and troubled ones, and the 2.68-star average says nothing about either. Always read a facility's own inspection history, complaint record, and staffing detail before deciding.

Group size also matters when reading the leaders. The state-government category rests on only 153 facilities, so a handful of very strong or very weak homes can move its 3.72-star average more than they would move a category with thousands of members. The same caution applies to nonprofit "other" at 330 facilities and for-profit partnerships at 405. The largest groups, the for-profit LLCs and corporations, produce the most stable averages precisely because they pool so many homes.

It is also worth remembering what the CMS overall rating actually is. The five-star scale is relative and percentile-based, calibrated so that ratings spread across facilities rather than measuring an absolute standard of care. A three-star home is roughly average for its peer set, not a fixed grade. The system is recalibrated over time, so a 2024 snapshot reflects how facilities compared in that period rather than a permanent verdict. Ownership categories are also self-reported to CMS and may lag behind recent mergers, sales, or management contracts. For the full description of how we handle this data, see our data methodology.

Related data

Sources