Star Ratings: What pharmacists need to know

star ratings

An update on Star Ratings

In brief:

  • In the shift to value-based care, Medicare plans are rewarded for good clinical performance and penalized for poor performance. Star Ratings are how Medicare plans are measured.
  • Pharmacy can impact up to 50% of a Prescription Drug Plan’s (PDP) overall Star Rating and the Star Rating of a Medicare Advantage Drug Plan (MADP).
  • Plans want to work with pharmacies that help them achieve high ratings.
  • Pharmacies need to understand changes in quality measures.
  • Health Mart® has multiple tools to help pharmacies perform well.

This update on Star Ratings is based on a presentation from McKesson ideaShare 2017 reviewing the basics of Star Ratings, delivered by John Gregg, Pharm D, co-founder of Thrive Pharmacy Solutions.

The big picture — A shift to value

Historically, payment in healthcare has been based on VOLUME. But a major shift is underway to pay based on VALUE. In value-based care, clinical outcomes are what matter most.

CMS Star Ratings

Star Rating

Performance Level

4Above Average
2Below Average

The Centers for Medicare and Medicaid Services (CMS) is pushing the entire healthcare industry to focus on value and has set a goal that in 2020, 90% of Medicare expenditures will be tied to value.

One effort to emphasize value is to rate Medicare plans based on the value they provide. This rating by CMS of Medicare plans is done using a star system, with ratings ranging from 1 to 5 stars. (Note: It is PDP and MADPs that are rated, NOT PHARMACIES — pharmacies do not have Star Ratings.)

Health plans care a great deal about their Star Rating because there are significant rewards for health plans with good ratings and penalties for health plans with poor ratings.


for good ratings

for poor ratings

  • Eligible for major incentive bonuses*
  • 5-star health plans are able to enroll patients year-round
  • Not eligible for bonuses*
  • Poor ratings over a period of time can result in a health plan being kicked out of being a Medicare plan

*Only MADP plans are eligible for bonuses

How Star Ratings are calculated

Star Ratings hold Medicare plans accountable for the quality of services they deliver to patients. There are up to 44 quality and performance measures used to create a Medicare plan’s Star Rating. Ratings are based on:

  • Operational measures — This includes measures such as how long a patient is on hold when calling a plan and how enrollees rate a plan. (Operational measures are not heavily weighted.)

  • Provider measures — Several measures focus on the quality of care provided by a Medicare plan’s providers, especially doctors.

  • Medication-use related measures — These are weighted heavily, as performance on pharmacy measures can impact up to 50% of a Medicare PDP’s overall Star Rating.

Pharmacy quality measures

The pharmacy quality measures currently used to determine Star Ratings fall in two main categories — adherence measures and comprehensive medication reviews:

  1. Adherence — Adherence is determined based on the proportion of days covered (PDC). If a patient has filled prescriptions for statins, non-insulin diabetes (oral anti-glycemics), and RAS antagonists to cover 80% or more of the days in the period being measured, they are deemed to be adherent. If the PDC is less than 80% of the days covered, for a prescription that is filled at least twice, the patient is deemed as not adherent.

    Pharmacies need to make sure that patients with ongoing prescriptions in these clinical categories are refilling their prescriptions and are adherent.

  2. Comprehensive Medication Review (CMR) — This measure calculates the percentage of eligible patients for whom a CMR was completed. This measure has been added to Star Ratings after being a “display measure” for several years.

    Pharmacies want to make sure to complete a CMR for any patients who qualify.

In addition, there are other measures of pharmacy quality that are currently display measures. Display measures are not used in determining Star Ratings, but data is collected and pharmacies still want to perform well on these measures. Important display measures include alternative therapy and statin use in diabetes.

  1. Alternative therapy — This is essentially a measure of the use of high-risk medications among elderly patients, including drugs like Ambien and Lunesta, muscle relaxants, and estrogen replacement therapy. For 2018, this measure was removed from Star Ratings and is not included in plan ratings, but plans will still look at this measure to facilitate quality improvement.

  2. Statin use in diabetes — This measures the percentage of diabetes patients ages 40–75 who receive a statin. This is based on updated clinical guidelines published in 2014. Pharmacies need to make sure that any patient receiving a medication for diabetes also receives a statin. This requires flagging diabetes patients not on a statin and contacting their physician to recommend that a statin be prescribed.

    This is currently a display measure that CMS plans to make a full measure in 2019.

Measuring and improving pharmacy performance

While Star Ratings measure plan performance, not pharmacy performance, Medicare plans want to work with top-performing pharmacies that help them achieve good performance. The benefits to top-performing pharmacies include:

  • Increased likelihood of being included in plans’ networks in the future
  • Lower DIR fees (See “Dealing with DIR”)

It is important for pharmacies to know how they are performing and which patients are negatively impacting their performance.

The EQuIPP™ dashboard shows pharmacies how they are performing on all key measures for plans that provide data to EQuIPP. For plans who provide outliers, it also provides the ability to drill down to identify patients that are hurting performance, so action can be taken to intervene and improve performance. Outliers are updated weekly with some plans providing daily updates.


EQuIPP dashboard


Health Mart tools

In addition to being able to access EQuIPP through the myHealthMart website, Health Mart provides other tools including:

  • Health Mart Toolkit Performance Resources
  • Health Mart University℠ courses
  • Health Mart Performance Support team
  • Pharmacist’s Letter® that provides clinical references and support

In the past, pharmacy profits were based on prescription margins. Going forward, patient care and performance will impact profits. Take advantage of the tools from both Health Mart and EQuIPP to help your pharmacy improve performance.