5 Things About CMS' Controversial Hospital Stars Program

August 12, 2016

CMS unveiled the results of its new star rating system for hospitals amid great controversy. Here are 5 things to know about the new Medicare stars rating program for hospitals.

CMS unveiled the results of its new star rating system for hospitals amid great controversy. Hospitals that care for sicker, lower-income patients were concerned they would be unfairly penalized for doing so, the American Hospital Association and other groups had raised concerns about the rating system, and more than 280 members of Congress had sought a delay in the release of the ratings.

Here are 5 things to know about the new Medicare stars rating program for hospitals.

1. CMS just rolled out ratings for hospitals.

Health plans have been receiving star ratings for years. The ratings are supposed to help beneficiaries choose between plan options. In July, CMS released data on how hospitals ranked in its Hospital Compare Star Ratings.

The system is a composite of 64 individual quality measures covering things like how often patients wait in the emergency department infection rates, readmission rates, and more. Of the 3617 hospitals rated in the first hospital quality rating, just 102 hospitals received 5 stars, and many of the nation’s best-known hospitals received average or below-average scores.

2. The controversy behind the ratings

The American Hospital Association (AHA) and other groups felt the method of rating hospitals was unfair. Their concern was that safety net hospitals, which care for patients that have more acute health problems, would be unfairly penalized and lose needed federal funds. Teaching hospitals were also more likely to receive 1 or 2 stars compared with non-teaching hospitals.

As far back as September 2015, the AHA had released a statement that CMS should not try to retrofit the existing Hospital Compare measures with a star rating system.

3. CMS did initially delay the release of the ratings

In April 2016, CMS announced that the quality ratings would be held until July. Federal officials wanted more time to work with stakeholders on issues of methodology and fairness. At the time, CMS had been receiving pressure from not just hospitals, but also members of Congress to adjust the ratings.

4. Not every hospital is rated on every measure

While there are 64 measures total quality measures, there may not be data available for all measures for all hospitals. As a result, some hospitals could be rated based on less than 10 measures, while others are rated based on the full 64 measures, reported Becker’s Hospital Review.

5. Ratings should be taken with a grain of salt

While it might seem that the data presented in the ratings is objective, the data points used and how they are weighted can lead to contradictory conclusions, explained STAT. As a result, consumers may not have the easiest time understanding what the ratings really mean.

Mayo Clinic was the only hospital of US News & World Report’s top 5 hospitals that received a 5-star rating from CMS. Meanwhile, Johns Hopkins did not even receive a rating because of incomplete data. One professor of healthcare finance boiled down the discrepancies to the simple fact that some hospitals may be better at working the numbers than others.

“My guess is the safety net hospitals aren’t as good at it as richer hospitals,” he told STAT.