The Center for Regulatory Effectiveness (CRE) has warned the Centers for Medicare & Medicaid Services that it needs to follow federal guidelines and the regulatory process for the creation and implementation of its five star rating programs. The CRE provides Congress with independent analyses of agency regulations, and is a clearinghouse for methods to improve the federal regulatory process.

Read also: Report shows how patient demographics influence dialysis facility star ratings 

CMS has applied the star rating system to many health care sectors, including dialysis facilities, nursing homes, and hospitals.

In a letter sent to CMS July 8, the CRE lists concerns it has with CMS’ rulemaking process and methodology for the star rating programs.

“The Part C and D Medicare five-star ratings system is a laudable concept in that it seeks to inform consumer choice in the market rather than attempting to regulate the market through command-and-control regulations. Nevertheless a number of entities have contacted CRE to express concerns regarding the manner in which the program is designed and implemented, including its burdens, its lack of compliance with the provisions of applicable law regarding notice-and-comment rulemaking and gaps in the transparency of the rating methodology.”

The CRE notes that “CMS has not been proceeding through Federal Register notice-and-comment rulemaking in promulgating the star ratings programs or use of the program in determining bonuses, rebates, and eligibility. Instead, it has issued annual proposals, calls for comments, and final rules through announcements posted on its websites. One important consequence of this lack of Federal Register rulemaking is that individual comments are not posted on www.regulations.gov so that interested persons cannot assess for themselves the validity of the comments and the agency response. Instead, the agency only posts summaries of comments and respond to its own summaries.” Not using the Federal Register is a violation of the Medicare and Administrative Procedures Act, the CRE warns.

Read also: Finding consistency in Medicare’s quality ratings for dialysis providers

The CRE also writes that the data collection process for the rating methodology is not properly approved by OMB’s Office of Information and Regulatory Affairs, and that the individual ratings may not be sufficiently reproducible by a third party.

“In view of the importance of the star ratings system, its complexity, and particularly since it is now used not only to inform consumer choice but also to determine eligibility, bonus payments, and rebates, we believe that it is time for an independent expert review and test of the validity of the methodology and the reproducibility of ratings. We believe this should be done by utilizing the peer review process under the DQA [Data Quality Act] peer review rules.”

In December, Dialysis Patient Citizens filed the first challenge to a CMS quality program under the Data Quality Act, contending that star ratings methodology failed to satisfy federal requirements for objectivity and utility in presenting information to the public.

“CRE believes the star ratings program is sufficiently important that CMS should take every practicable measure to ensure its quality and validity in the eyes of the public and service providers.”

Read the full CRE letter.

Source: NRAA July 17 Renal Watch