Navigating Star Ratings in the Pharmacy

I recently started researching into the workings of star ratings and what it would mean for all the community pharmacies.  To understand the pharmacies role in this new process, we must first start with the basics on what star ratings are. 

The Centers for Medicare and Medicaid Services (CMS) put in place the Five Star Quality Rating System to help educate consumers on quality and make quality data more transparent.  The plans are rated on multiple measures, with five specifically related to medication management, including: high risk medications, diabetes treatment, medication adherence for diabetes, medication adherence for hypertension, and medication adherence for cholesterol.  These five measures are weighted more heavily than others, resulting in almost half of a plan’s total star rating score provided by CMS.  Health plans want high star ratings from CMS for multiple reasons, including:

·      Quality bonus payments from the federal government for good star ratings.

·      5-star plans can be marketed year round to consumers and patient can choose to leave their current plan for a 5-star plan at any point during the year.

·      Patients will not be allowed to enroll in a plan if it received low scores for 3 consecutive years.

·      Patients are more likely to choose a plan with a higher star rating and typically plans with higher ratings have higher premiums.

Plain and simple, plans can get quite a bit of money for having higher star ratings.  So, the big question now is where does pharmacy fit in to all of this? 


First off, let’s be clear on who is giving pharmacy star ratings.  CMS does not give out star ratings to the pharmacy; they only evaluate the health plans.  However, health plans are able to see how pharmacies meet the five medication management measures.  These measures are solely based on claims billed from the pharmacy.  This gives the health plans a way to give pharmacies star ratings and evaluate which pharmacies are better at meeting the quality measures.  With the information plans receive about each pharmacy in their network, they are then able to utilize different strategies to increase their own star rating with CMS.  This can include reworking their preferred pharmacy networks to only include pharmacies that show high star ratings as well as send MTM cases to only the pharmacies that can show good outcomes with their patients.  The bottom line for pharmacies on this point is that the better your star rating are with health plans, the more patients you can potentially get and the more money you can make. 

After all of my research, I feel that there are multiple components of this system that can have some serious implications for pharmacies and patients.  The difference in payment between a 3-star and a 5-star plan averages $16 per member per month.  If a plan has 1 million members, that plan receives $192 million per year of additional revenue.    On top of that, MTMs are going to become a larger role in the pharmacies day-to-day operations (if they aren’t already).  With reimbursement being roughly $60 for sessions that can take up to an hour to complete, pharmacies could easily lose money in providing these services when on average, a pharmacist’s salary is $65/hour.  This doesn’t even consider other operational costs for the pharmacy for that one hour of time.  Community pharmacies are going to have to alter their businesses to be able to successfully provide these services and continue to be a part of health plans’ preferred networks.  

Another concern I have for community pharmacies is the ability to compete with mail-order when 3 out of the 5 measures being looked at with medication management deal with adherence.  With these adherence measures solely based on the medication possession ratio gathered from pharmacy claim information, it can be very easy for plans to make patients get their medications from a mail-order pharmacy.  Mail-order pharmacies are able to automatically refill and mail out medications for patients, even when the patient doesn’t need the medication due to real adherence issues such as missing multiple doses or taking the medication incorrectly; even though the patient is not adhering to the medication, the mail-order pharmacy has the claim billed with the health plan giving their pharmacy a higher adherence ratio.  In the community pharmacy, the pharmacy can automatically fill medications, but it is up to the patient to pick that medication up.   

Star ratings are here for pharmacies and it is very important for pharmacies to know what their star rating can do for their business.   Multiple medication adherence and medication synchronization programs are available to pharmacies that can help improve the pharmacy performance with adherence quality measures.    Also, with Comprehensive Medication Reviews (CMR) becoming a quality measure for star ratings in the future, pharmacies should fully utilize programs available(e.g. Mirixa, OutcomesMTM) to complete CMR cases and not hand cases off to a call center.  These programs along with an effective Drug Utilization Review (DUR) system can go a long way in raising your pharmacy’s performance in the medication management quality measures.

Heather Worthington

MPA Rotational Student

University of Missouri-Kansas City at MU


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