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Performance Measures, Star Ratings, and What They Mean for Your Pharmacy

If you’re a player in the pharmacy industry, you’ve probably heard the words “Star Ratings” and “performance measures” a time or two. Both are metrics used to measure quality and performance, and if you’re not sure what the differences between them are, don’t worry, you’re not alone. 

The distinction between Star Ratings and performance metrics is often times unclear to many, causing the misconception that they can be used interchangeably. However, this is far from accurate. The Star Rating System, created by the Centers for Medicare & Medicaid Services (CMS), is used to evaluate the quality of services Part D health plans provide. Performance measures, on the other hand, are set by plans and used to assess a pharmacy’s ability to meet certain standards. Simply put: Star Ratings evaluate health plans, while performance metrics evaluate pharmacies.

Although they technically gauge different things, the connection between each of these ratings systems does impact your pharmacy. Additionally, your pharmacy’s performance plays an important role in how both are determined. With that in mind, here’s a look at what each means and how they affect your pharmacy.

Star Ratings

In 2008, CMS created the Five-Star Quality Rating System or Star Ratings, to help beneficiaries compare Medicare Drug Plans based on quality, cost, and coverage. 

The Star Ratings System is designed to hold plans accountable for the quality of services they provide patients. These ratings incentivize plans to provide a high quality of care through rewards for high-scoring plans and penalties for plans on the other end of the spectrum. Rewards for good ratings include major incentive bonuses (only for Medicare Advantage Prescription Drug or MA-PD plans) and the ability to enroll patients year-round (for five-star health plans). Penalties for poor ratings include not being eligible for bonuses (MA-PD plans) and no longer being a Medicare plan (for poor ratings over a period of time). 

A Medicare Drug Plan’s rating summarizes a plan’s performance in four categories:

  1. Drug Plan Customer Service: how quickly and well a plan addresses questions or calls in customer service areas. 
  2. Member Complaints and Changes in the Drug Plan’s Performance: how frequently members have issues with the plan or choose to leave a plan, and how much the plan’s performance has improved over time (if at all).
  3. Member Experience with the Drug Plan: how well the plan performed on Medicare’s member experience survey which includes ratings about the convenience of getting prescriptions filled and a general rating of the plan. 
  4. Patient Safety and Accuracy of Drug Pricing: the accuracy of the plan’s pricing information and how often members are prescribed drugs in a safe and clinically recommended way for their particular medical condition.  

Information about the quality of a plan is taken from member surveys, billing, and other information plans submit to Medicare as well as Medicare’s regular monitoring activities. Each year, Medicare reviews plan performances and releases new Star Ratings in the fall.

Performance Measures

Although Star Ratings were implemented to evaluate a plan’s performance, pharmacies still take on the pressure of high performance as their actions have a significant impact on a health plan’s ratings. This is where performance measures come in. Performance measures are determined at the discretion of health plans and may be related to their Star Ratings. In fact, these measures can account for up to half of a plan’s CMS Star Rating and influence a pharmacy’s future participation in the plans’ networks and its level of reimbursement and DIR fees. 

Generally, performance measures fall into three categories: medication adherence, medication safety, and completion of a medication therapy management (MTM) program for comprehensive medication reviews. 

  • Medication Adherence: Adherence, or the percentage of time when a patient has a medication available, is most commonly measured in two ways: medication possession ratio (MPR) or proportion of days covered (PDC). MPR is calculated by dividing the sum of the days’ supply for all fills of a drug in a particular time period divided by the number of days in that period. PDC looks at the number of days a patient is covered by a given medication and divides that by the total days in a specific time period. In the latter measure, a patient is considered adherent at 80% of days covered. Non-adherence to three chronic disease categories —  oral diabetes medications, statins for cholesterol, and hypertension medications — also impacts a pharmacy’s adherence score.
  • Medication safety: This is evaluated based on the appropriate use of high-risk medications in the elderly, and the type of blood pressure medication used by patients with diabetes. 
  • MTM: These are services provided to patients to educate them about their medications and improve outcomes. MTM programs require coordination between patients, pharmacists, and other healthcare providers to ensure proper use of medications and prevent any inappropriately treated conditions.  

Understanding Where You Stand 

Performance measures have a more direct effect on your pharmacy than Star Ratings and are influenced by whether they are calculated at the store level or the PSAO level. At the PSAO level, plans aggregate each metric, so an organization’s entire network of pharmacies is treated as one entity. Here, a pharmacy may have a hard time significantly influencing results as it is grouped with thousands of other pharmacies. By comparison, at the store level, the performance of each store is measured individually.

Regardless, there are still steps you can take to move the needle on your performance in a positive direction. Focusing on metrics that are weighed at the store level and addressing outliers will be beneficial for your pharmacy. Additionally, completing MTM programs, communicating with physicians, and counseling patients to increase adherence levels go a long way toward improving performance (not to mention lowering DIR fees). Investing in technology platforms (such as Amplicare) can also help you identify medication adherence intervention opportunities and patients that need the most attention. By reducing the impact of outliers on your pharmacy, you keep your performance measures high and ultimately improve your bottom line. 


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FDSRX is now part of EnlivenHealth®