CMS outlines long-awaited changes to hospital star ratings

care coordination
CMS has outlined several changes for the Hospital Compare star ratings, including making the methodology for the ratings easier to understand for providers. (Getty)

The Trump administration released a long-awaited proposal to change how their star ratings posted on the Hospital Compare website are calculated, saying they aim to make the new methodology simpler and address concerns held by the industry about the scoring.

The proposed change was tucked into a proposed payment rule released by the Centers for Medicare & Medicaid Services on Monday for outpatient hospital departments and ambulatory surgical centers. The rule touches on the use of latent variable modeling (LVM), which combines and summarizes multiple pieces of information and is used to calculate a hospital's star rating. 

A hospital’s star rating is based on the performance of specific quality measures. But some stakeholders have complained that the model is too unpredictable and complex. “We recognize that LVM may be challenging for stakeholders to understand and explain to others,” the rule said.

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Providers have called for a less complex methodology that can be “easily understood by their organization, explained to patients and used to identify areas for quality improvement,” the proposal said. Hospitals groups such as the American Hospital Association have pressed for changes to the methodology.

If finalized, the rule would discontinue use of the LVM for quality measure group scores and instead adopt a “simple average of measure scores to calculate measure group scores,” the proposed rule stated. “This method would average the measure scores a hospital reports within a given measure group, which have been standardized, to calculated the measure group scores."

CMS would take 100% divided by the number of measures reported to give the percentage that each quality measure would weigh. If a hospital reports all eight measures in the Safety of Care measure group, then the measure weights would be determined by calculating 100% divided by the eight measures that are reported.

The agency also wants to consolidate three measure groups: effectiveness of care, timeliness of care and efficient use of medical imaging into one process measure group: Timely and Effective Care. It would be part of a steady reduction of measures in the CMS quality programs, from 64 measures in the first publication of the star rating in 2016 to 51 in January of this year.

“This consolidation would be necessary to ensure a sufficient number of measures exist in this group,” the rule said.

The change could also allow more critical access hospitals to participate in the star rating program.

Currently, a critical access hospital must meet three measures in three groups, one of which must be a patient outcome group.

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But some hospitals don’t meet the minimum threshold to receive a star rating because they serve too few patients to report quality measures in each group. Now that the measure groups are consolidated, CMS estimates that another 157 critical access hospitals can get a star rating, in addition to the 1,149 critical access hospitals that already earn a star rating.

Hospital groups are holding a wait-and-see approach to the new changes.

The AHA said Tuesday that in light of the “substantial flaws with CMS’s current approach to hospital star ratings, we appreciate that the agency is exploring ways of improving the methodology.”

America’s Essential Hospitals was also cautiously optimistic about CMS “working to fix flaws in the hospital star ratings program,” according to a statement.

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