Policy & Regulation News

Is CMS’s Hospital Quality Star Rating System Non-Compliant?

By Jacqueline DiChiara

- The Hospital Quality Star Rating System from The Centers for Medicare and Medicaid Service (CMS) is facing scrutiny. Some industry-wide trepidation exists about whether or not CMS’s Hospital Quality Star Ratings System will result in actionable, knowledgeable decision making, as RevcycleIntelligence.com reported earlier this week. 

Hospital Quality Star Ratings System

A star rating system that forces hospitals to essentially keep patients happy by focusing more heavily on the patient experience may mean budgets detrimentally shift accordingly and quality care falls to the wayside. It is possible a hospital concerned with low star ratings may invest a heftier portion of its budget on thicker doors or softer sheets than on needed clinical advancements, as HealthITAnalytics.com reported. Also of concern is whether or not the general public will actively consider the ratings system, as RevCycleIntelligence.com stated.

Is this type of padded star ratings system the answer to advance and improve the healthcare industry? Not necessarily. According to a letter filed with CMS from the Center for Regulatory Effectiveness (CRE), the process of star development lacks compliance with the Administrative Procedure Act, the Paperwork Reduction Act, and the Data Quality Act. A variety of procedural flaws within the Star Ratings System for Part C and D Medicare, says CRE, violate Medicare and APA rulemaking requirements.

Deficiencies in how the ratings came to be require addressing to maximize their collective effectiveness and quality, says CRE in a July 8 letter addressed to Andy Slavitt, CMS’s Acting Administrator, and Patrick H. Conway, MD, MSc, CMS’s Acting Principal Deputy Administrator for Innovation and Quality. Although CRE claims the five-star ratings system is indeed a “laudable concept” of enhanced communication, the organization confirms there are many burdens and transparency gaps within the program’s overall design and implementation that in turn diminish its quality levels.

CRE advises Slavitt and Conway to implement several recommendations. First, since the Star Ratings System currently determines bonuses, rebates, and eligibility, CRE recommends CMS’s system adheres to Federal Register notice-and-comment rule-making procedures.

“To date, CMS has not been proceeding through Federal Register notice-and-comment rulemaking in promulgating the star ratings programs or use of the program in determining bonuses, rebates, and eligibility,” says CRE’s letter to CMS. “Instead, it has issued annual proposals, calls for comments, and final rules through announcements posted on its websites,” says CRE, adding that although the agency posts summaries of comments and responses to its own summaries, individual comments are not posted. This fosters a lack of validity in violation of the Medicare and APA rulemaking provisions, CRE confirms.

CRE suggests CMS allow the public to collectively comment on data collection and provide consolidated Information Collection Requests (ICRs) to OMB’s Office of Information and Regulatory Affairs – especially in regard to burden cost estimates. CRE additionally requests for an explanation as to why the burden costs shown are mainly zero. CRE says such information “does not appear credible” and “could be disguised by submission of information collection requests in a piecemeal fashion and by using differing titles and explanations for the ICRs."

“It appears that some of the information used in the star ratings methodology comes from third parties (such as the HEDIS data); however, if the party’s data collections were supported with financial assistance from the agency, they would be subject to the PRA regulations,” CRE maintains. “CMS should publish information on whether all of its star ratings data collections, and which ones, were approved by OIRA, along with the OMB control numbers and reference numbers,” adds CRE.

CRE additionally advises CMS to execute a formal, documented pre-dissemination review of the star ratings’ reproducibility, as the data collection process that currently stands lacks accuracy. “[It] appears that overall star ratings depend on the star ratings for individual measures, which in turn depend on the star-specific cut points for the individual measures,” CRE says. “Those cut points, in turn, appear to depend on the validity of the data collection inputs for individual plans or entities. The validity of those data inputs will depend on the validity of the data collection process under the Paperwork Reduction Act.”

Lastly, CRE suggests CMS administer a peer review plan for analytical components. Says CRE, “[There] is no indication that CMS has conducted or sponsored any peer review or posted peer review plans for a star rating program.”

CRE urges CMS to consider the aforementioned points and formulate a response about what proposed actions may follow to help ensure the star ratings’ excellence. CMS’s data should represent quality and validity to the public and to service providers, says CRE. It is hopeful CMS's Hospital Quality Star Ratings System will garner its own five-star approval rating and will concurrently promote the dissemination of quality data and knowledge.