What do Star Ratings have to do with pharmacies?

Although pharmacies aren’t directly awarded with Star Ratings from the Centers for Medicare and Medicaid Services (CMS) like providers and health plans are, pharmacy-related measures have a big impact on patient outcomes – and the Star Ratings can have a big impact on the pharmacy’s bottom line.
What are Star Ratings?

Star Ratings are awarded by CMS on an annual basis to Medicare providers (doctors and hospitals) and Medicare plans (insurance companies and pharmacy benefit managers) to help make it easier for patients to decide where to go for care. Medicare Advantage (Medicare Part C) and Medicare Part D prescription drug plans (PDPs) are rewarded for good clinical performance with 4- or 5-star ratings, or penalized for less-than-average performance with 1- or 2-star ratings. These ratings greatly impact reimbursement.


CMS’ Overall Hospital Quality Star Ratings were announced recently – giving 429 hospitals 5 stars and 192 hospitals 1 star. MA and PDP plans’ Star Ratings are released by CMS annually in October.


Dozens of quality and performance measures are used to formulate a Star Rating. For Medicare plans, these include operational measures (how members enroll in and navigate their health plan), provider measures (quality of care) and medication-use measures (treatment adherence and comprehensive medication review). Hospital ratings include measures in five groups: mortality, safety, readmission, patient experience, and timely and effective careCMS provides comprehensive background on why data points are selected, how they’re defined, what measures go into them and at what cadence, as well as weighting and Star Ratings calculations.


Given Medicare’s concentration on those ages 65 and older and with disabilities, the drug adherence performance measures are concentrated around three common chronic conditions: diabetes, cholesterol and blood pressure management.

What do pharmacies have to do with them?

Pharmacies can impact up to 50% of a PDP’s overall Star Rating. In fact, CMS’ drug adherence measures are more heavily weighted than other quality measures. Therefore, it’s no surprise that health plans want to work with pharmacies to develop and maintain pharmacy-specific performance measures that help the plans achieve coveted high Star Ratings.


Pharmacies are responsible for making sure patients are getting their prescriptions, exploring alternative therapies, and completing a comprehensive medication review (CMR) for patients who qualify, including a review of patients’ diseases, allergies, prescriptions and over-the-counter medications.


The benefit to pharmacies (beyond the obvious patient health benefits) is twofold:

  1. Increased likelihood of being including in plans’ networks in the future
  2. Lower Direct and Indirect Renumeration (DIR) fees

Adherence is the primary focus. Physicians commonly write maintenance medication prescriptions for 30-day fills, including 11 refills, so patients return for a checkup and reassessment of drug therapies on an annual basis. Adherence, therefore, is measured by the proportion of medication days covered, which is calculated based on how frequently a prescription is filled. In other words, consistent (most often monthly) Rx refills result in better medication adherence, improved patient outcomes and lower overall costs of care – not to mention more reliable pharmacy revenue.

If adherence is determined to be low (less than 80% refill consistency during the measurement period), pharmacies’ DIR fees go up. (Although DIR fees will go away in 2024 as part of drug transparency legislation, they continue to make a big difference in pharmacies’ bottom lines for the time being.)

What should pharmacies do to track Star Rating-related performance and progress?

To monitor pharmacies’ performance, plans periodically audit what’s happening in and coming out of will call, begging questions like: Are patients’ prescriptions being filled? Are they getting picked up? Do patients understand how to take them as prescribed? Are aged prescriptions being returned to stock in a timely manner and re-adjudicated, and are those patients engaged to understand why they weren’t picked up?

Pharmacies can take specific actions to perform well against medication-use measures. Some opportunities include:

  • Medication synchronization programs: By helping patients remember to fill prescriptions on time, and make it easy for them to fill all their prescriptions at one time, they’re more likely to adhere to recommended treatment plans.

  • Monitoring inventory and managing return-to-stocks: By diligently tracking what’s in will call for a given patient and returning aging prescriptions to stock (as well as communicating with patients to understand why their meds may not have been picked up), pharmacies better manage inventory in compliance with CMS’ and plans’ recommendations.

  • Relationship development, health coaching and consultation: Many factors can contribute to nonadherence, including social determinants of health (transportation, housing, etc.), lack of understanding of the medication, forgetting to order refills, forgetting to pick up filled medications, finding it inconvenient or impossible to make multiple trips to the pharmacy, forgetting to take each dose, changes or conflicts in recommendations from multiple prescribing physicians, etc. Finding and taking the time to talk with patients can make all the difference. Services may include medication counseling and consultation, refill reminders and follow-up calls, generic alternatives or cost-saving programs, etc.

Tools like scripClip can help not only with inventory and return-to-stock management, but also free up pharmacists’ valuable time to provide more attentive, revenue-generating med synch programs and clinical services.

Andrew Finney, PharmD., owner of Perkins Drugs (in Gallatin, TN; recently acquired by Walgreens) spoke to Bruce Kneeland about the benefits of scripClip. One of the biggies for him relative to Star Ratings was the return-to-stock feature that makes it easy to quickly light up all aged prescriptions in will call, issue patient reminder calls and ultimately increase Rx refills. Click here to read Finney and Kneeland’s take.

To decide where to start, get familiar with the Star Ratings of hospitals you support. Whether providers’ and health plans’ ratings are strong or on the weaker side, adoption of smart technologies and processes to enhance operational efficiency and patient safety could transform the pharmacy performance measures into hospitals’ and plans’ “golden child” of next year’s ratings – increasing profitability in the process.

To speak with a consultant about what scripClip could do in your pharmacy, call 888.872.5803 or request a one-on-one consultation and demo.