The Centers for Medicare & Medicaid Services (CMS) is the federal agency that administers Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP). To help consumers make informed choices, CMS developed a standardized quality rating system, presented as a 1-to-5 star scale. These ratings summarize complex data, allowing individuals to compare the performance and quality of various healthcare providers and insurance plans. A higher star rating, with five stars being the best, indicates a higher level of quality across defined metrics. CMS uses distinct methodologies to assess different sectors, ensuring measures are relevant to the specific type of care being evaluated.
Star Ratings for Medicare Advantage Plans
The Star Ratings system is applied annually to Medicare Part C (Medicare Advantage) and Medicare Part D (Prescription Drug) plans. Updated ratings are released each October to help beneficiaries assess a plan’s quality before or during the annual enrollment period. Scores are based on dozens of measures spanning nine major categories covering health and administrative performance.
Performance categories include measures related to staying healthy, such as screenings and vaccines, and metrics for managing chronic conditions like diabetes or high blood pressure. Customer service is also a significant factor, gauging how effectively the plan handles complaints, appeals, and overall responsiveness. Additional measures focus on drug plan performance, including member experience and patient safety related to prescription drug usage.
Plans achieving four or five stars are considered high-quality and may qualify for bonus payments from CMS, which can be used to offer additional benefits. CMS uses the ratings to hold plans accountable and can terminate contracts for those that consistently fail to achieve at least a three-star rating. The overall rating is a weighted average of the Part C and Part D measure scores.
The Nursing Home 5-Star Quality Rating System
The Nursing Home 5-Star Quality Rating System evaluates every Medicare and Medicaid-certified nursing home, with data publicly available on the Care Compare website. The overall rating is derived from three main domains, each receiving a separate star rating.
The first domain is Health Inspections, which is the most heavily weighted. This rating is based on the outcomes of the three most recent annual comprehensive inspections and findings from complaint investigations conducted over the last 36 months. The severity and scope of deficiencies found directly impact the score.
The second domain focuses on Staffing levels, measuring the amount of nursing staff time available per resident per day. This calculation is adjusted for the varying clinical needs of residents. The staffing rating considers hours worked by Registered Nurses (RNs), Licensed Practical Nurses (LPNs), and Certified Nursing Assistants (CNAs). Facilities receive a one-star rating for staffing if they report four or more days in a quarter without an RN on site.
The third domain is Quality Measures, which assesses resident outcomes using about 15 different clinical and physical metrics. These measures include rates of resident pain, mobility, unplanned weight loss, and the use of physical restraints. Separate quality measures evaluate care for both short-stay residents (typically receiving post-acute rehabilitation) and long-stay residents.
Hospital Star Ratings
CMS applies a Star Rating to acute care hospitals, summarizing quality information across five broad performance categories. This overall rating is updated at least once annually to provide a centralized comparison point for hospital quality nationwide.
The five measure groups are weighted differently based on their importance to patient outcomes. The categories are:
- Mortality: Assesses the percentage of patients who die within 30 days of being admitted for specific conditions (e.g., heart attack, pneumonia).
- Safety of Care: Focuses on the rate of hospital-acquired conditions, including surgical site infections and complications of care.
- Readmission Rates: Tracks how often patients return to the hospital within 30 days of discharge for the same or a related condition.
- Patient Experience: Based on patient surveys measuring communication with staff, responsiveness, and hospital cleanliness.
- Timely and Effective Care: Evaluates how often hospitals provide recommended treatments at the right time.
The Overall Star Rating is calculated using a statistical process that clusters hospitals based on their performance across all measure groups.
Interpreting and Applying CMS Ratings
A CMS star rating should be considered a starting point in the decision-making process, not the final word on a provider’s quality. Consumers should look beyond the single overall star rating and examine the underlying category scores.
For example, if choosing a hospital for surgery, the Safety of Care and Mortality scores are more relevant than the Patient Experience score. Similarly, a person with a chronic illness selecting a Medicare Advantage plan should prioritize the Managing Chronic Conditions category.
Ratings are updated on an annual or quarterly basis, depending on the provider type, so checking the most current information is important. Star ratings represent an average performance across a wide range of services; a facility may excel in one area, like short-term rehabilitation, but be average in another. Using CMS ratings alongside other information, such as facility visits and personal recommendations, provides the most complete picture.