Specialty Hospitals Benefit More From CMS Star Ratings

An analysis from Modern Healthcare found that the Centers for Medicare & Medicaid Services’ (CMS) star-ratings formula disproportionately benefits specialty hospitals, compared with major teaching hospitals.

Researchers from consulting firm Sullivan, Cotter and Associates found that, of the 74 specialty hospitals that were reviewed in December 2017, 45 (61%) received a five-star rating and 16 (22%) received a four-star rating. Comparatively, of the 172 major teaching hospitals that received a star rating, 15 (9%) received a five-star rating and 25 (15%) received a four-star rating.

The analysis also found that specialty hospitals only reported about half (27.2) of the 57 measures CMS considers in its ratings, while major teaching hospitals reported an average of 51.4.

Specialty hospitals were able to achieve high ratings because the measures they were more likely to report were those that were weighted more heavily under the star-rating methodology.

CMS’ latest formula update, which involved clustering hospitals repeatedly into five groups, appears to have slightly flattened the usual bell curve of hospitals that receive star ratings. In doing so, more hospitals fell into the highest (5) – and lowest (1) – ratings categories.

Under this methodology, hospitals that perform below average on any of the four heavily weighted measures must perform above average on the other three measures to maintain 4- and 5-star ratings. This can be difficult for major teaching hospitals to achieve because they face comparison to hospitals with different patient populations.

Critics of the star-ratings formula say it should display a hospital’s performance on measures by specific conditions, which may be more relevant to patients.

CMS said it will continue to look for opportunities to improve the star-ratings formula and is expected to update it in July.

Source: Modern Healthcare, March 14, 2018.