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How Many Stars Will It Take to Keep Your Business Afloat?

Friday, January 23, 2015  
Posted by: Christopher Lipson

This week at HCAF’s Winter Mini Conference, many attendees gained valuable information about CMS's new 5 Star ranking system for home health providers. The consensus of your colleagues was that the CMS plan was poorly designed and not applicable to today’s consumers. Many if not the majority of providers will find themselves sorely misrepresented and will pay the price in decreasing referrals not due to poor service or outcomes, but simply because the system being utilized to rank and convey their information is poorly designed. HCAF joined the National Association of Home Care and Hospice (NAHC) in creating a list of problems with this initiative and NAHC has submitted those in writing to CMS. For more insight, see the article describing these comments below:


The Centers for Medicare and Medicaid Services (CMS) held a Special Open Door Forum on December 17 to solicit stakeholder feedback on the proposed five star rating for home health agencies scheduled to start in 2015. During the call, CMS announced the quality measures it plans to use along with the proposed methodology for obtaining the five star rating. Comments were due Jan. 16.


The National Association for Home Care & Hospice (NAHC) submitted comments which addressed three main areas of concern with CMS proposed star rating system: the selected measures; the calculation methodology; and the next steps.


NAHC has concerns with CMS’ decision to include five measures that show improvement in functional status or clinical condition. The expected outcome for many patients admitted to home health care is to stabilize or prevent decline of a condition or functional limitation. In addition, the recent settlement in the lawsuit in Jimmo v. Sebelius   further confirms that the improvement standard does not apply to all Medicare home health patients. Further, an agency’s ability to affect a patient’s improvement in any measure depends largely on the services provided and the length of time the patient spends on service with the agency. The quality measures for home health agencies include data from four different payment sources: Medicare Fee for Service (FSS); Medicare Advantage (MA); Medicaid; and Medicaid managed care. Each such patient population and the applicable payers have widely varying utilization patterns.

NAHC recommended CMS include outcome measures reflecting care to patients who cannot and will not improve in any ADL or IADL function and add measures from the Home Health Consumer Assessment of Healthcare Providers and Systems (HHCAHPS) survey.

NAHC also expressed concerns with a star rating model that requires providers be placed in quintiles even when the performance variation between the providers may be slight. It compounds that weakness by grading “on a curve,” resulting in moving all agencies to a middle, 3 Star grade regardless of their unadjusted star rating. Poor performers could rate higher than their actual performance while good or excellent performers could rate lower than their actual performance, with the potential for both performers to be rated as the same 3 star grade.

A 3 star rating is universallyis universally recognized to mean an “average” rating. Using 2013 data, CMS projected that 58 % of agencies would receive a 3 star rating, with only 22% rating a 4 or 5. The resulting five star rating system is misleading and could have significant consequences for patients and home health agencies. Not only will consumers be misled, but private insurance plans, referral sources, and state survey agencies could misjudge the quality of care the agency provides.

NAHC recommends that CMS use a model that projects a star rating which more accurately reflects the agency’s actual performance. CMS should avoid using star ratings for measures where the distribution of scores lacks variation and is skewed.  CMS must also recognize that whatever model it chooses to use, it must measure consumer comprehension and interpretation based on like-kind models.

Going forward NAHC recommended that CMS use the formal rulemaking process for public notice and comment on any 5 star system. In addition, CMS should clearly disclose the schedule for publication of the star ratings and any updates. Finally, NAHC requests that CMS offer agencies sufficient time to review their star ratings prior to releasing this data to the public



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