CRE: CMS’ Five-Star Quality Rating System is a Violation of Medicare and APA Rulemaking Requirements

CMS’s Five-Star Quality Rating System for Part C and D Medicare is laudible concept for using informed consumer choice rather than command-and-control regulation to improve the healthcare market. However, because the Star Rating System is now used to determine bonuses, rebates, and eligibility, CMS is statutorily required to implement the ratings through Federal Register notice-and-comment rulemaking proceedings.

In the letter to CMS attached here, the Center for Regulatory Effectiveness explains the deficiencies in how the ratings were developed. CRE concludes that CMS should

1. Follow Federal Register notice-and-comment rulemaking proceedings for the star ratings programs.
2. Provide notice in the Federal Register, and submit Information Collection Requests (ICRs) to OMB’s Office of Information and Regulatory Affairs in a consolidated form, particularly with regard to burden cost estimates, so that the public can comment on the program’s data collection as a whole.
3. Conduct a formal, documented pre-dissemination review of the reproducibility of the star ratings before it proposes star ratings rules for notice and comment.
4. Issue a peer review plan for the analytical components of the Star Rating System, designating the program as “highly influential” (HISA), and sponsoring an independent, expert, external peer review in accordance with the OMB/OIRA peer review requirements.

CRE requests in the letter that CMS notify it of the agency’s responses to the above points and any actions it will take to ensure and maximize the quality of the Five-Star Ratings System.

See CRE Letter to CMS here.