Few U.S. hospitals attain five-star quality of care

Only 2.2 percent of U.S. hospitals earned a five-star quality rating from CMS in its Overall Hospital Quality Star Rating (Star Rating) system, which reflects the level of patient care received. According to a CMS data brief preview and evaluation, 934 hospitals, or 20.3 percent, received a four-star overall hospital quality star rating. The most common rating was three stars, which was received by 1,770 hospitals, or 38.5 percent. Two stars were given to another 723 hospitals, or 15.7 percent, and 133, or 2.9 percent, received only one star.

Notably, another 937 hospitals, or more than 20 percent, were not assigned a rating. No star rating is assigned to hospitals that do not report or do not have the requisite minimum amount of data, which can occur for small or new facilities.

CMS’ Star Rating takes 62 existing quality measures already reported on the Hospital Compare website and summarizes them into a unified rating of one to five stars. Quality measures range from the routine care an individual receives when being treated for heart attacks and pneumonia to quality measures that focus on hospital-acquired infections, such as catheter-associated urinary tract infections.


CMS believes that star ratings spotlight excellence in health care quality and make it easier for consumers to use the information on the Hospital Compare website (see Care to compare? Hospital five-star rating system now available, Health Law Daily, April 16, 2015). This is consistent with the call for transparent, easily understood, and widely available public reporting found in the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). The ratings also support using quality measures as a key driver of health care system improvement.

CMS had previously delayed its intended April 21, 2016, release of overall hospital quality star ratings on its Hospital Compare website until at least July 2016. The delay was partly attributable to efforts raising concerns about whether the involved methodology for star ratings provided a fair, accurate, and meaningful representation of hospital performance.

Lawmakers and associations, alike, noted that a number of the quality measures that are the ratings’ foundation impact teaching hospitals that treat patients of low socioeconomic status, treat more complex patients, and perform various complicated surgeries (see Lawmakers’, hospitals’ wish upon star ratings temporarily granted, Health Law Daily, April 21, 2016).

Premium-supported Medicare proposal spawns many questions, no solid answers

Medicare currently makes payments based on specific services, but policy discussion is swirling about changing the program to a premium support system that operates on capitation payments, or payments per person. The Kaiser Family Foundation (KFF) offered some answers to common questions that are now swirling after Rep. Paul Ryan (R-Wis) released a Republican health reform proposal that includes partially privatizing Medicare (see Ryan proposes ‘A Better Way’ to repeal Obamacare, Health Reform WK-EDGE, June 29, 2016). The KFF warned that out-of-pocket costs for beneficiaries could either rise or fall under the proposed plan, depending on various factors.

How would it work?

The new system would involve a federal payment made for each beneficiary toward a health plan purchase, either a private plan (like under Medicare Advantage), or traditional Medicare. Beneficiaries would be able to choose their plans. The KFF emphasized that that various premium support proposals provided over the last few years have key differences in how policies would work, including benefit specificity, health insurer rules, and payment setting.

The price tag

A premium payment system’s particular design will determine the amount of premiums and out-of-pocket payments. Premiums for covered services would vary by geography and plan. The Congressional Budget Office (CBO) found that total cost to beneficiaries would decrease if the federal payments were tied to the average plan bid but would increase if tied to the second lowest plan bid. A general decrease, however, does not mean that every beneficiary’s payments will go down. Most beneficiaries who remain in traditional Medicare would pay more.

One of the primary aims of such a system is to reduce federal spending. If plan competition increases and results in decreased premiums, and beneficiaries are incentivized to choose the most cost-effective health plan, long-term federal spending on the program could decrease. Like beneficiary costs, federal government costs depend on plan structure.

Effects on beneficiaries and providers

The preservation of particular benefits is currently unknown, as some proposals differ. Currently, Medicare Advantage plans must offer at least the amount of benefits a beneficiary would receive under traditional Medicare, but premium support proposals have not clearly established this requirement. Some proposals offer subsidies for low-income beneficiaries, but these may be insufficient to allow such individuals to select the plan they want. They may also need to switch plans frequently to avoid premium hikes. KFF believes that a premium support plan may erode traditional Medicare enrollment so much that providers may have fewer incentives to enroll in accountable care organizations and other payment reform efforts, and subsidized providers like teaching hospitals may not receive the financial support to which they are accustomed.

Highlight on Michigan: Medicaid expansion did not cause crowding

The expansion of Michigan’s Medicaid program—the Healthy Michigan Plan—did not impede access to care, according to a University of Michigan Health System study. Despite concerns that new rules and growth would be detrimental to those signed up for both the Healthy Michigan Plan and private insurance, according to the study, there was no significant increase in wait times for either group. In addition to not hindering access, expansion improved access for some individuals. For Healthy Michigan enrollees, the odds of getting an appointment increased in the first year of expansion.

Earlier research

The study, published in the American Journal of Managed Care (AJMC), is an extension of an earlier study that examined primary care appointment availability and wait times for new patients with Medicaid and private insurance before and 4 months after Michigan’s Medicaid expansion on April 1, 2014. In those first four months, the researchers found an initial increase in primary care appointment availability for new Medicaid patients and no lengthening of wait times.


The subsequent study—like the earlier research—used a simulated patient or “secret shopper” method. Trained research staff called a random sample of primary care practices, before and after Medicaid expansion, to request a new patient appointment. Wait times were calculated as the difference between the date of the call and the appointment date. The study evaluated 295 clinics.

Appointment availability

The percentage of clinics accepting new Medicaid patients increased from 49 percent, before expansion, to 55 percent 12 months after expansion. The availability of appointments for privately insured individuals fell from 88 percent of clinics before expansion to 86 percent after expansion. The number of Medicaid appointments scheduled with non-physician providers increased from 8 percent before expansion to 21 percent 12 months after expansion. For individuals with private insurance, the proportion of appointments scheduled with non-physician providers increased from 11 percent before expansion to 19 percent 12 months after expansion.

Wait times

For clinics accepting Medicaid patients, median wait times remained stable over the first year of Michigan’s Medicaid expansion. For those with private insurance, median wait times increased from 7 to 10 days in the first year after expansion. Additionally, median new patient wait times were within two weeks. According to the study, 95 percent of new patient wait times satisfied the Health Michigan Law’s requirement that Health Michigan beneficiaries have access to an initial day primary care appointment within 90 days of enrollment.


Medicaid expansion in Michigan had a largely positive impact on patient access to care. With the exception of small increases in wait times for some privately insured individuals, the Health Michigan Program served to improve, rather than hinder, the likelihood and timeliness of care. The researchers concluded that increases in appointment availability for new Medicaid patients was likely attributable to increases in the number of non-physician appointments. As such, the study recommended that future research should examines other team-based approaches—like the use of non-physician appointments—to further improve primary care access.


Hearing hits Obama Administration over Cost Sharing Reduction funding

The Obama Administration unlawfully funded the Cost Sharing Reduction (CSR) program under the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), according to a House Ways and Means Oversight Subcommittee hearing led by subcommittee chairman Peter Roskam (R-Ill). The hearing included witness testimony from agency officials regarding the propriety of the Administration’s spending on a program with disputed appropriations. The hearing was accompanied by the release of report containing the findings of a 17-month oversight investigation into the Administration’s funding of the CSR program.


Ways and Means Committee Chairman Kevin Brady (R-Texas) emphasized what he called an unprecedented level of obstruction by the Obama administration and described the hearing as an important step towards transparency. Representative John Lewis (D-Ga) expressed concern that the hearing was another partisan attempt to “roll back health care reform.” Lewis asserted that because the CSR funding issue was being decided through ongoing litigation in federal court, it was not the place of a congressional committee to litigate the issue. Chairman Brady contested assertions that the hearing was improper as a result of ongoing litigation, noting that the power of the purse is not limited by ongoing litigation between Congress and the Executive branch. Additionally, he noted that the dispute was not about health care but, instead, the separation of powers.


Mary Wakefield, Acting Deputy Secretary of HHS, explained that the CSR program was designed to defray the cost of health coverage for low-income individuals. She explained that it limits out-of-pocket costs for low-income individuals because, in many cases, out-of-pocket costs are the factor that prohibits access to care. She explained that, often, those costs serve as a barrier to care because low-income individuals are forced to choose between two essential expenditures—for example, housing and health care. She testified that 6.4 million people are benefitting from the CSR program as of 2016. Roskam objected to her characterization of the program, noting that the CSR subsidy is a subsidy for insurance companies and not “poor people.” Representative Joe Crowley (D-NY) called Roskam’s characterization unclear, explaining that the CSR program benefits patients “at the point of care.”


Roskam asserted that, by law, the CSR program requires an annual appropriation. However, he said, in the absence of a congressional appropriation, the administration decided to fund the CSR program with a permanent funding appropriation (31 U.S.C. §1324) that was designed to support the ACA’s premium tax credit. John Koskinen, Commissioner of the Internal Revenue Service, acknowledged that under the IRS’ charge to implement the tax provisions of the ACA, the IRS decided to use the Section 1324 appropriation for the CSR program. The agency officials asserted that the funding decision was appropriate, in part, because the CSR program is integrated with the other ACA subsidies like the premium tax credit. In response to requests for further legal justification for the funding source, all of the agency officers referred lawmakers to the briefs of the ongoing litigation between House Republicans and the Obama Administration (see Court sides with House Republicans, finds no appropriation for cost-sharing reductions, Health Reform WK-EDGE, May 18, 2016).


In response to questions regarding obstruction and agency compliance with subpoenas, Mark Mazur, Assistant Secretary for Tax Policy at the Department of Treasury, Michael Deich, Senior Advisor for Budget at the Office of Management and Budget, and Wakefield testified that they have responded to subpoenas and will continue to work with Congress regarding requested documents.