The Truth About Hospital Star Ratings and What Every HIM Professional Needs to Know

The Star Rating program for hospitals summarizes quality information on important topics, like readmissions and mortality, after admissions for conditions such as myocardial infarction (MI) or pneumonia.

The overall ratings are assigned by the Centers for Medicare & Medicaid Services (CMS) and range between one and five stars, outlining a variety of measures across five areas of quality and translating them into a single overall star rating for each hospital. The five measure groups include:

• Mortality;
• Safety of care;
• Readmission;
• Patient experience; and
• Timely and effective care.

Each qualifying hospital receives a summary score across 46 measures in these five measure groups.  Each measure group is allocated 22 percent of the total score, except for the Timely and Effective Care measure, which is allocated only 12 percent. 

What health information management (HIM) and quality care professionals need to understand about these star ratings is that the cohort their hospital is compared to is determined by how many measures the facility shares data for, with three measure groups being the minimum. This logically groups larger facilities together and puts smaller facilities into their own unique cohort.

But more importantly, risk adjustment is applied to the raw claims data submitted for each patient eligible for the measure, using standardized algorithms to normalize for differences in the population based on uncontrollable conditions that the provider cannot impact. But here is where it gets really fun: 40 percent of the diagnosis codes that risk-adjust patients in the comorbidity index used for hospital star ratings have no impact on the MS-DRG payment and are not complications or comorbidities (CCs) or major CCs (MCCs). Because of this, they are not always documented by hospitalists and surgeons, nor captured in coding.

When the July 2023 star ratings were released, 248 hospitals nationwide were rated a one-star hospital – that is around 5 percent of all qualifying U.S. hospitals. Ask yourself: would you rather seek care at a one-star or a five-star hospital? Hospitals also care about their ratings because there are financial penalties associated with measures that are disaggregated from the star ratings, to include the Readmissions Reduction Program, the Hospital-Acquired Conditions Reduction Program, and the Value-Based Purchasing Program. Hospitals can lose up 4 percent of their Medicare reimbursement and millions of dollars of revenue.

What can you do? First, it is important to harmonize your the approach because it truly takes a village. Coding, quality, clinical documentation integrity (CDI), and providers need to understand the confluence of work that needs to be done to improve performance. Too often, hospitals tend to focus on reducing the “O,” or observed number of patients in a measure, instead of the “E,” or the expected number of patients in a measure. Understanding whether you have a quality problem or a data problem is crucial to getting to the root cause.

Download the Agency for Healthcare Research and Quality (AHRQ) Measure Specifications and understand how the measures work. They contain information regarding which conditions are included and excluded from the risk adjustment algorithms. These can be downloaded from the CMS or AHRQ websites.

Second, look at how your hospital is performing now and set goals for how to improve for the next reporting period. You can find information on a free website called American Hospital Directory, located at www.ahd.com; look under the quality tab to see your hospital’s star rating and if it is being penalized in the mandatory reform programs. Unfortunately, the May 2024 report will be based on claims data from 2022, so be prepared to have a bit of delayed gratification in your efforts, but start today. 

Last, it is very important to develop a plan to incorporate risk adjustment into your CDI and coding programs. Provider engagement is necessary, as they need to understand why they are being queried for conditions such as hyperglycemia, drug dependence, and staging of chronic kidney disease. If a provider is in an Accountable Care Organization (ACO), how they perform in the readmissions reduction programs is important to their gain share incentives. Knowing how to engage providers is critical to success. Using every tool possible to motivate and energize your providers will have a lasting impact.

About the Author:

Michelle Wieczorek (RN, RHIT, CPHQ, CPUR) is an expert in clinical documentation integrity, medical coding, and risk adjustment. She assists providers with resolving issues in the clinical revenue cycle with special expertise in improving financial and clinical outcome measures performance. Ms. Wieczorek also works with organizations at improving adoption of artificial intelligence (AI) technologies in the clinical documentation and coding space. She is a Registered Nurse with certifications in health information technology, clinical documentation, and healthcare quality. Michelle holds two U.S. patents in clinical rules logic for a market-leading AI technology and has developed trademarked clinical content for risk adjustment. 

Contact the Author:

michellewieczorek08@gmail.com