As the significance of Star Ratings grows in the world of community pharmacies, The iMedicare Team wants to bring you all more clarity on the best ways to improve your pharmacy’s rating, as well as a fuller understanding of the system as a whole.

We figured one of the best ways to do this is to bring in the expert themselves –David Nau, co-founder of Pharmacy Quality Solution’s EQUIPP, took the time to break down this topic for us in detail, and emphasize this rating system’s implications for pharmacies and the future.

It’s been ten years since the federal government launched Medicare Part D, the prescription drug benefit for Medicare beneficiaries. This program has provided greater access to medications for over 35 million older adults with more than 10,000 new beneficiaries added every day. The Part D benefit is administered by hundreds of private plans across the country and most beneficiaries have many drug benefit options from which to choose.

While having options can be good for tailoring your Part D benefits to your needs, Medicare beneficiaries often feel overwhelmed by the number of choices. Many beneficiaries have chosen their plan based on finding the lowest premium, it is also important to consider the quality of the Part D plan. Picking the lowest price plan may not be the best decision if that plan is not offering high-quality service or enabling providers to deliver the best quality of care. In order to help beneficiaries evaluate the quality of a Medicare plan, the federal government created the Medicare Star Ratings system.

The Medicare program assigns 1 to 5 stars to each Medicare plan (5 stars being best) based on the past performance of the plan on numerous “measures of quality.” The stars are updated every October and are displayed on the Medicare Plan Finder as beneficiaries select plans for the coming year. Most plans achieve 3 to 4 stars and are considered to have a range of good to very good performance. A small number of plans achieve 5 stars and these are considered the top quality performers in serving Medicare beneficiaries. At any time throughout the year, a beneficiary may switch into a 5 star plan if one is available. Conversely, low-performing plans (below 3 stars) are at risk of having enrollment blocked by the federal government or being removed entirely from the Medicare program.

The federal government provides additional incentives for Medicare Advantage plans to improve quality by tying “quality bonus payments” to the Star Ratings. If a Medicare Advantage plan achieves an overall rating of at least 4 stars, it can receive a bonus of 5% in its income from Medicare in the following year. For large Medicare Advantage plans, this can mean additional income of over $100 million. Due to the large financial incentives related to quality, many of the Medicare plans are incentivizing the physicians and pharmacies that serve their members. Thus, community pharmacies are starting to have a portion of their payment based on the quality of care provided to Medicare beneficiaries.

Pharmacy incentives related to the Medicare Star Ratings are usually focused on several quality measures that were developed by the Pharmacy Quality Alliance (PQA) for use in the Star Ratings. These quality measures include three measures focused on patients’ adherence to chronic medications for diabetes, high blood pressure and cholesterol. These measures track the regularity of refills obtained by the patient and are calculated as the Proportion of Days Covered (PDC) rate. The PDC rate indicates the percentage of patients who received at least 2 fills of the medication and who maintained a PDC of at least 80%. Because a patient is considered to be adherent when above a PDC of 80%, this means that small gaps in therapy (perhaps due to a brief hospitalization) don’t cause the patient to be categorized as non-adherent. Switches between brand and generic forms of medications within the same category (e.g., statin medications for cholesterol) also do not negatively affect the PDC for a patient.

Other quality measures that are relevant to pharmacies include the use of statin medications in persons with diabetes, and the completion rate for Comprehensive Medication Reviews (CMRs). The use of statins in persons with diabetes is based on recent clinical guidelines that recommend the use of statins in diabetic patients between the ages of 40 and 75 years old. This is to minimize the risk of cardiovascular events in these patients and is not dependent of the patient’s cholesterol levels. The CMR completion rate tracks the percentage of MTM-eligible patients who completed a CMR during the year in which they were deemed eligible. Typically, pharmacies are assigned CMR cases by an MTM company (e.g., Mirixa or OutcomesMTM) and are expected to complete the case within 30 days of assignment. Thus, the pharmacy CMR completion rate may focus on cases completed within 30 days.

All of the quality measures for pharmacies are predicated on the notion that pharmacists are health care professionals who have the ability to affect the use of medications by their patients. Although pharmacists do not generally have independent prescribing authority, they can work with the patient’s physicians to promote appropriate therapy (as in the case of statins for patients with diabetes), or can talk with their patients about the importance of maintaining regular use of chronic medications (which supports good PDC rates). Most of the quality measures are derived from prescription claims data and thus the non-submittal of a claim serves as evidence that the dispensing of a medication did not occur. Therefore, if a patient who is enrolled in Medicare Part D obtains a diabetes medication without the pharmacy submitting a claim to the patient’s Part D plan, it appears that the patient did not receive the diabetes medication and the quality measure calculation is negatively impacted. By not submitting a claim to the Part D plan when a patient is in the Medicare coverage gap, the patient also does not receive credit towards the True Out of Pocket (TrOOP) expenditure calculation and may not move out of the gap. As such, many pharmacies are re-examining their internal policies regarding non-submittal of claims for Part D patients who are refilling prescriptions for medications that affect the Star Ratings.

Medicare patients are increasingly using the Star Ratings as one factor in their selection of Medicare plans. This is especially true of younger “baby boomers” who may be more consumeristic than their older counterparts in their approach to selecting health plans, physicians and pharmacies. As more of the Medicare plans rate the quality of the pharmacies in their networks, and incentivize pharmacy performance on Star metrics, the implications of the Star Ratings for pharmacies will continue to grow. Thus, pharmacists should educate their patients on the importance of Stars in selecting a Medicare plan, but should also remain aware of their own performance on the quality measures used in the Medicare Star Ratings.