Seeing Stars: Medicare’s Rating System Comes to Home Health Agencies

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Karen Utterback By Karen Utterback 
Former Vice President, Product Marketing and Strategy, McKesson (Retired)
People holding their hands together in the shape of a star

Preparing to leave the hospital is an extraordinarily complex task for elderly and chronically ill patients. Choosing a home health care provider is just one of many decisions made during that busy, confusing time.

“You give [patients] as much information as you can [about home health agencies], but they’re not really in a receptive mode,” Alex Alvarez of Montefiore Care Management Organization told Kaiser Health News in a recent article. “They just want to go home.”

Making those decisions easier is a main reason behind CMS’s new program that assigns one to five stars to home health agencies based on self-reported data and Medicare billing records.

In July, Medicare released Star Ratings for more than 9,000 agencies. About half received average scores (3 or 3.5 stars); 28% received below average ratings. Medicare plans to eventually use the same or similar data to pay bonuses and apply penalties to agencies based on performance.

The Medicare star ratings were based on:

  • How quickly someone from the agency visited the patient
  • Whether they explained the drugs to be taken to the patient or caregiver
  • Whether they made sure a patient got a flu shot for the season
  • How much patients improved skills such as walking, bathing, getting in and out of bed, bathing, breathing and being able to move around with less pain
  • How many patients had to be admitted to the hospital

Since this program is new to home health agencies, it’s unclear precisely how it will affect the industry. Dr. Kate Goodrich, director of the quality measurement program at CMS, struck an upbeat tone, saying “What this indicates to us is a large proportion of home health agencies are performing reasonably well.”

However, the National Association for Home Care and Hospice has expressed concern over the methodology of the Star Ratings system, saying the ratings are adjusted so that agencies are grouped toward the middle.

Going forward, lessons may be learned in the patterns uncovered by the Kaiser Health News analysis. For example, the highest proportion of one- or two-star agencies were in Alaska, Arkansas, Minnesota, Ohio, Oregon, Texas, Wyoming, and DC. In those places, four out of 10 agencies (or more) received less than three stars.

In addition, home health agencies run out of skilled nursing homes and agencies run or paid for by local governments tended to perform poorly while visiting nurse associations and agencies with religious affiliations tended to get the most stars.

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