How CMS calculates hospital star ratings

For this year's ratings, CMS analyzed 46 hospital quality measures across five different groups:

•  Mortality (22%)
• Safety (22%)
• Readmission (22%)
• Patient Experience (22%)
• Timely & effective care (12%)

The percentage weights of all the measures are out of 100%. If a hospital had no measures in a certain group, the weighted percentage was redistributed proportionally to the other measure groups.

Depending on the measure, CMS used hospital data collected from July 2019 to March 2023 for its latest rankings. Hospitals' performance on quality metrics from the first half of 2020 during the pandemic was excluded.

How hospitals performed

Of the 2,834 hospitals that received a rating:

• 381 received a five-star rating, compared to 483 last year
• 766 received a four-star rating, compared to 803 last year
• 828 received a three-star rating, compared to 872 last year
• 595 received a two-star rating, compared to 668 last year
• 277 received a one-star rating, compared to 250 last year

An additional 1,811 hospitals did not receive a Star Rating due to a lack of sufficient data.

Commentary

According to Modern Healthcare, fewer hospitals received ratings this year. Compared with 2023, 227 fewer hospitals received ratings. This may be because hospitals were unable to report on enough measures for CMS to calculate a Star Rating. Critical access hospitals, which are not required to participate, may have also opted out of the Star Ratings.

Overall, most hospitals (51%) received the same Star Rating this year as they had last year. According to Akin Demehin, senior director of quality and patient safety policy at the American Hospital Association (AHA), a lack of changes in CMS' scoring methodology meant that there were fewer fluctuations in the ratings.

"As expected, this year's CMS Hospital Overall Star Ratings distribution looks largely like 2023 given that the methodology that hospitals are rated on has remained stable for the last few years," Demehin said.

"Multiple factors could contribute to a hospital experiencing a shift in ratings, including changes to underlying measures used to calculate the ratings, the time periods used to calculate performance and minor coding changes," Demehin added. "This year's ratings also continue to include data reflecting the profound effect the COVID-19 pandemic had on hospital operations."

Rick Kes, a healthcare senior analyst at consultancy RSM, said that it is surprising that Star Ratings are still trending toward the negative since facilities have made efforts to improve patient experience and care quality since the start of the pandemic.

However, Kes noted that the data for the 2024 ratings were pulled from several different points during the pandemic, and some hospitals may have been struggling with finances, staffing, and high patient acuity at those times.

"The recovery from the pandemic has certainly taken a significant amount of time," Demehin said

Some industry trade groups, including AHA, have also discussed CMS adding social risk factors to its hospital Star Ratings. Adding these factors would account for hospitals in marginalized communities whose patient outcome measures are disproportionately affected by homelessness, disability, and lack of access to care.

Currently, CMS' Hospital Value-Based Purchasing Program has a health equity adjustment that considers both a facility's quality performance and patients' social drivers of health to determine how a hospital is performing within the community it serves. (Devereaux, Modern Healthcare, 8/1; Gregerson/Twenter, Becker's Hospital Review, 8/1; Carbajal/Taylor, Becker's Hospital Review, 7/31; AHA News, 7/31; CMS Overall Hospital Quality Star Ratings, accessed 8/1)

Star Ratings are one of the most impactful levers for financial success in Medicare Advantage. But health plans can struggle to inflect their ratings due to shifting performance indicators. Learn four strategies to increase your plan's Star Rating performance and achieve long-term success.