Navigating Compliance in Senior Living Communities: PBJ and CMS Ratings

Managing a senior living community is not for the faint of heart. Unlike traditional businesses, these facilities never close – they operate 24/7, 365 days a year – requiring constant staffing, seamless scheduling, and round-the-clock oversight.

If you think hiring and retaining employees is difficult, try doing it in an industry in which clinical staff shortages complicate recruitment, competitive pay incentives are necessary just to keep shifts covered, and a reliance on agency staff creates higher costs, scheduling chaos, and administrative headaches.

However, staffing challenges are just the tip of the iceberg. Senior living communities also operate in one of the most highly regulated industries in the country. Two of the most pressing compliance concerns these organizations must navigate are Payroll-Based Journaling (PBJ) and Centers for Medicare & Medicaid Services (CMS) ratings — both of which directly impact financial success, regulatory standing, and reputation.

What is Payroll-Based Journaling (PBJ)?

Created under the Affordable Care Act (ACA), PBJ requires long-term care and nursing home facilities to submit detailed staffing and payroll data to the CMS. The goal? Greater transparency and accountability. This requirement adds additional layers of red tape that, if mishandled, can lead to fines, penalties, and lower CMS ratings.

Why PBJ Should Matter to Your Organization

• Transparency impacts move-ins: Families use staffing data when choosing a facility, and CMS makes these numbers public.
• Regulators are watching: CMS uses PBJ data to determine whether your staffing meets minimum care standards.
• Your reputation is on the line: Facilities that report low staffing numbers risk poor CMS ratings, bad reviews, and fewer move-ins.

And here’s the kicker: Even small errors in PBJ reporting can lead to big penalties — including reduced Medicare reimbursements, citations, audits, and fines ranging from $50 to $10,000 per day. So, if PBJ reporting feels like a bureaucratic nuisance, just remember — it’s one of the most critical factors in keeping your facility compliant and financially stable.

What Data Needs to Be Tracked?

PBJ reporting isn’t just about counting staff members — it requires a painstaking level of detail. Facilities must report:

• Staffing hours: Exact hours worked for every employee, tracked from 12:00 AM to 11:59 PM.
• Employee roles & job codes: CMS requires facilities to categorize staff into 40 specific job roles.
• Shift assignments: Any changes in duties or shifts must be accurately reflected in reports.

If you think this sounds unnecessarily complicated, you’re not wrong. Most facilities track shifts, not 24-hour time blocks, making traditional workforce tracking systems inadequate for PBJ compliance. This is why many organizations invest in robust Time and Labor Management (TLM) systems — because without one, managing PBJ compliance is practically impossible.

How PBJ Affects CMS Ratings

PBJ reporting also has a direct impact on your CMS ratings. The CMS Five-Star Quality Rating System evaluates long-term care facilities based on three categories — health inspections, quality measures, and staffing, which comes from PBJ reports.

And here’s the bottom line: Staffing data is one of the most influential factors in your CMS rating. Here’s how PBJ reporting can make or break your CMS score:

• Not enough staff? Say goodbye to stars: Low staffing numbers = lower CMS scores.
• Families trust CMS ratings: Prospective residents and families heavily rely on these scores when choosing a facility.
• Errors in reporting = automatic penalties: If you submit incomplete or late PBJ data, expect an automatic downgrade in CMS staffing scores.

One bad PBJ report can trigger a chain reaction. Your CMS rating affects revenue, trust, and staff recruitment, so getting it right is essential. Think of a CMS rating like a hotel review — the higher the rating, the better the reputation. Conversely, a low rating can scare people away.

CMS ratings also influence Medicare and Medicaid reimbursements and staff recruitment and retention. Ultimately, a poor CMS rating can have a lasting impact, making compliance with PBJ requirements a business necessity.

Ensuring PBJ Compliance

If you’re running a senior living facility without the right tools, you’re basically trying to dig a foundation with a shovel when you really need a backhoe.

A Time and Labor Management (TLM) System is Essential

As PBJ requires organizations to track 40 CMS-defined positions, your TLM system must be able to:

• Track hours based on position, location, and activity (e.g., skilled nursing vs. memory care).
• Automatically split hours at midnight (without requiring employees to punch in/out).
• Ensure compliance with PBJ rules while also supporting labor allocation and revenue analysis.

A proper scheduling tool plays a major role in PBJ compliance. The right system will identify staffing gaps before they become compliance issues and help reduce overtime while minimizing reliance on expensive agency staff. As a bonus, a well-integrated scheduling tool can also reduce costs and improve operational efficiency.

Maintaining Compliance: More Than Checking a Box

At the end of the day, PBJ compliance and CMS ratings aren’t just bureaucratic tasks. They impact resident care, financial health, and your organization’s reputation. To stay ahead, facilities must invest in better workforce tools, automate compliance tracking, and ensure proper staffing coverage.

In this industry, compliance isn’t just about following the rules — it’s about running a facility that thrives. To learn more about how CBIZ can help your organization maintain compliance with complex requirements and streamline key human capital management processes, connect with our team.