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August 20, 2019

Why CMS is revamping its star ratings (and why hospital groups aren't pleased)

Daily Briefing

    CMS on Monday announced the agency in early 2020 will update hospital star ratings using its current methodology, despite pushback from providers who say the methodology is flawed. CMS also said by 2021 it will release a proposed rule aimed at changing the methodology.

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    How CMS' hospital star ratings work

    CMS' Hospital Compare website's Overall Hospital Quality Star Ratings rate more than 4,000 U.S. hospitals on a scale of one to five, with five stars being the highest. The overall hospital star ratings are based on 57 quality measures across seven categories:

    • Effectiveness of care;
    • Efficient use of medical imaging;
    • Mortality;
    • Patient experience;
    • Readmissions;
    • Safety of care; and
    • Timeliness of care.

    However, several studies have questioned the agency's methodology, and hospital groups have raised concerns about the ratings' accuracy.

    CMS updated the star ratings in late February, after a 14-month hiatus. In response to providers' concerns, CMS in the February ratings relied less on patient experience and put more weight on prompt care and readmissions rates. CMS in the February update also used k-means clustering, under which the agency repeatedly categorized hospitals into the five star-rating groups until the hospitals in each group were sufficiently similar to each other and distinct from hospitals categorized in other groups.

    CMS said it continued to weigh each hospital's average score for each of the seven quality categories in the same way as in previous methodologies.

    The agency in February also suggested it was considering additional changes to the hospital star ratings methodology, though it said those were "long-term" considerations that would not take effect until the 2020 quality reporting year or later. For example, the agency in a 48-page request for feedback wrote that it was considering replacing its current model with a more explicit approach, such as using an average of the quality measurements on which the ratings are based.

    CMS received 800 comments in response to the request—including 145 letters from hospitals, health systems, hospital associations, and medical universities—with recommendations on how the agency could simplify the ratings system. A majority of stakeholders recommended the agency use more precise measures to allow consumers to make direct comparisons between hospitals. Others called on CMS to replace the methodology's latent variable model, which is a statistical method that emphasizes certain measures over others in the star ratings based on factors such as variation in performance or the correlation between measures.

    A CMS spokesperson last month announced that the agency would not release updated hospital star ratings in August as expected.

    CMS to release star ratings in early 2020, overhaul ratings by 2021

    CMS on Monday said it plans to release updated hospital star ratings in early 2020 based on the agency's current methodology, as the agency works to develop a new methodology. CMS said few stakeholders who responded to the agency's request for feedback "recommended removing or suspending the Overall Star Ratings from Hospital Compare until changes are made."

    However, CMS also said it plans to release a proposed rule in 2020 that would permanently change the methodology the agency uses to calculate the star ratings. The agency did not provide details on what changes it plans to propose, but said it will use the feedback it collected from stakeholders to help guide the proposed rule. In addition, CMS said it will hold a listening session on Sept. 19 to discuss the feedback it collected. CMS said patients, patient advocates, providers, and quality measurement experts may attend the session.

    The agency also said it will create a panel of about 15 to 20 technical experts—including consumers, hospital quality leaders, measurement developers, purchasers, and statisticians—to help develop a new methodology for the star ratings. CMS accepted applications for the panel until Aug. 19, and said it plans to begin working with the panel in the fall.

    The agency said it hopes to finalize the proposed rule before it issues new star ratings in 2021.

    CMS Administrator Seema Verma said, "Transparency is the cornerstone of the Trump administration's commitment to patients. President Trump knows the status quo doesn't work, and has directed us to enhance transparency for patients. CMS is delivering by refreshing and updating the Hospital Star Ratings."


    Provider groups expressed disappointment that CMS plans to update hospitals' star ratings in 2020 based on its current methodology.

    Ashley Thompson, SVP of policy at the American Hospital Association, in a statement said, "While we appreciate that CMS is working on potential improvements to the rating methodology, we strongly believe CMS should not refresh the ratings until those improvements have been vetted and are ready for implementation. Republishing the flawed ratings in 2020 will not advance the goal of providing the public with accurate, purposeful information about quality."

    Bruce Siegel, America's Essential Hospital's president and CEO, said, "The agency's plan to refresh data using a methodology that is under review for its shortcomings is misleading to patients" (Pifer, Healthcare Dive, 8/19; Castellucci, Modern Healthcare, 8/19; Morse, Healthcare Finance News, 8/19; AHA News, 8/19; Commins, HealthLeaders Media, 8/19).

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