What are CMS Hospital Star Ratings and How Are They Calculated?

CMS Hospital Star ratingsCMS Hospital Star Ratings are a quick-reference guide to the performance metrics of more than 4,500 hospitals nationwide. Because of the way in which they are calculated, users of the Hospital Compare web portal are advised to do their own due diligence before relying on the CMS ratings to make a treatment decision, which could have implications for hospital leaders.

The Centers for Medicare and Medicaid Services (CMS) is a federal agency within the Department for Health and Human Services. One of the agency's goals is to improve the healthcare system in the United States by enhancing the quality of care provided to patients. To help achieve this goal, the agency created the Hospital Compare web portal in 2002 to provide information to healthcare consumers about how qualifying Medicare and Medicaid hospitals compare against each other.

What started out as a basic comparison site covering only inpatient care has evolved over the years. Consumer Assessments and Outpatient Quality Reporting were added in 2003 and 2008 respectively; and subsequent additions to the Hospital Compare web portal include a Readmissions Reduction Program and a Hospital-Acquired Conditions Reduction Program. Although star ratings were already in existence for specific medical disciplines, CMS Hospital Star Ratings were introduced in 2016.

How CMS' Hospital Star Ratings Work

Hospitals are required by law to report inpatient performance metrics to CMS, and are “incentivized” (*) to report outpatient performance metrics each year. Data are divided into seven categories, and the hospitals' performances in each category are weighted to give an overall Star Rating. In addition, data from each category are compared to the national average of each category, and a score of “above”, “same as”, or below” the national average is awarded to each hospital. The seven categories are:

• Mortality Rate (Weighted average of overall rating - 22%)
• Safety of Care i.e. hospital acquired conditions (22%)
• Unplanned Readmissions (22%)
• Patient Experience Surveys (22%)
• Effectiveness of Care (4%)
• Timeliness of Care (4%)
• Efficient Use of Medical Imaging (4%)

So as not to exclude small or specialized hospitals - or those unable to provide a full data set due to their unique characteristics - hospitals only have to report data in at least three of the seven categories including at least one of the “outcome” categories (Mortality Rate, Safety of Care, or Unplanned Readmissions) in order to qualify for a Hospital Star Rating. Each category has between five and eleven fields, and at least three fields must be completed in each.

When hospitals are unable to complete the required number of fields in all seven categories, the weighting is redistributed. For example, a specialist pediatric hospital would be unable to report performance metrics for Mortality Rates and Unplanned Readmissions as the fields in these categories relate to non-pediatric events. Consequently the percentage weightings for Safety of Care and Patient Experience Surveys would increase to 39.285%, while the other weightings would increase to 7.1433%.

(*) Hospitals that fail to report outpatient data can have the following year´s Medicare payment reduced by 2%.

CMS' Hospital Star Ratings for 2019

The most recent Hospital Star Ratings were published in January 2019. Of the 4,573 hospitals that submitted performance metrics, only 293 achieved the full five-star CMS' Hospital Star Rating. Although this represents just 6.41% of all qualifying Medicare and Medicaid hospitals, it was a slight increase in number from the previous Hospital Star Ratings in December 2017 due to a chance in methodology. There were also increases in the number of hospitals achieving four stars and three stars.

Overall Star Rating # of Hospitals Percentage of Total
5 Stars  293  6.41%
4 Stars  1086  23.75%
3 Stars 1264 27.64%
2 Stars 800 17.49%
1 Star 282 6.17%
Unrated 848 18.54%

Criticisms of CMS' Hospital Star Ratings

The primary criticism of CMS' Hospital Star Ratings is that hospitals can manipulate their overall scores by selective reporting performance data where the opportunity exists. An analysis of the data reveals, of the hospitals that achieved a five-star rating, thirty reported data in the minimum three categories, and only one of these achieve an “above national average” in all three categories. Conversely, it is claimed hospitals that file comprehensive performance metrics appear to be penalized for their honesty.

That's not necessarily the case as a high rating could be achieved due to the nature of the hospital's services. If you take the example of the pediatric hospital mentioned above, nearly 80% of the hospital's rating would be calculated on factors such as surgical site infections (relatively rare in a pediatric setting) and patient experience surveys (relatively positive in a pediatric setting). It would also be hard to fault the hospital's Effectiveness of Care, Timeliness of Care, or Efficient Use of Medical Imaging.

Due to the criticisms of the Hospital Star Ratings system, CMS has announced it will revise the system for the next series of star ratings and is currently accepting comments about the best way to go about making changes. Comments suggested so far include revising the categories and removing the weighting element so the Hospital Star Rating is based on average scores, and placing hospitals with similar characteristics (such as pediatric hospitals) into peer groups to facilitate more like-for-like comparisons.

Why You Shouldn't Disregard CMS Requirements Altogether

An important requirement was added to CMS rules in November 16, 2017, requiring all hospitals and healthcare institutions to have effective emergency response mechanisms and processes in place. During emergencies, a hospital mass notification system is important to quickly communicate timely information to management and
employees, obtain the status of employees, and alert employees of emergency situations. 

A recent survey found that within the last two years, 27% of healthcare organizations had encountered workplace violence incidents. The survey also revealed that hospitals and other medical facilities are using certain modes of communication more than others, yet not all of these methods are reaching their diverse communities. Find out more about healthcare emergency preparedness trends by downloading the survey report.
2018 Healthcare Survey Report

Andrea Lebron
Andrea Lebron

Andrea is Rave's Director of Digital Marketing, a master brainstormer and avid coffee drinker. Andrea joined Rave in August 2017, after 10 years of proposal and corporate marketing at an environmental engineering firm. You'll find her working with her amazing team in writing and producing blogs like this one, improving your journey to and through our website, and serving you up the best email content. When she's not in front of a keyboard, she's chasing after her three daughters or indulging in her husband's latest recipe. Andrea has a Bachelor's degree in Marketing/Management from Northeastern University and an MBA from Curry College.

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