The Independent Pharmacist's Guide to CMS Star Ratings

Most independent pharmacies do not see a CMS Star Rating attached to their name. But the work happening behind the counter can still influence the ratings Medicare health plans earn—and the opportunities available to your pharmacy.

‍

CMS assigns Star Ratings to Medicare Advantage and Part D plans, not individual pharmacies. Yet pharmacy performance can affect key measures tied to those ratings, including medication adherence, medication safety, and other medication-use outcomes. Many health plans, PBMs, and pharmacy services organizations also track pharmacy-level quality performance, which may influence network participation or incentive opportunities depending on the program and contract.

‍

In this guide, we’ll break down how CMS Star Ratings work, why they matter to independent pharmacies, and practical ways to support the quality measures that can make a difference.

‍

What Are CMS Star Ratings?

‍

The Centers for Medicare & Medicaid Services (CMS) Star Ratings program is a five-point measurement system that evaluates quality across multiple healthcare settings, not just health plans. Hospitals, nursing homes and other long-term care (LTC) facilities, and Medicare health plans all get their own CMS Star Rating. Pharmacies are the exception as CMS doesn't issue a Star Rating for pharmacies directly.

‍

That gap doesn't mean pharmacies escape scrutiny, however. Medicare Advantage (Medicare Part C) and Medicare Part D prescription drug plans (PDPs) get rated annually on dozens of quality and performance measures, then assigned a rating between one and five stars. Five stars means exceptional, one star means there are problems. Many of those measures depend on how the plan's network pharmacies perform.

‍

The 2025 CMS Star Ratings raised the bar considerably. Only seven Medicare Advantage ( Medicare Part C) Prescription Drug (MA-PD) contracts earned a five-star overall rating, down from 38 the previous year, a sign that quality measures have become increasingly difficult to achieve. That leaves a lot of room for improvement, and a lot of pressure landing on the pharmacies, providers, and care coordinators those plans work with.

‍

Why Independent Pharmacies Should Care about CMS Star Ratings

‍

Here's the direct translation: health plans that earn four or five stars get significant financial bonuses from CMS.

‍

They can market their plans year-round (not just during open enrollment), charge higher premiums, and attract more members. Plans that fall below three stars for three consecutive years risk contract termination by CMS.

‍

That financial pressure flows downstream. Health plans improve their Star Ratings partly by building high-performance pharmacy networks. Pharmacies that help plans hit adherence and safety benchmarks get rewarded with preferred network status and better reimbursement terms. Pharmacies that underperform get excluded or de-preferred.

‍

A study published in the American Journal of Managed Care tracked over 100,000 Medicare Advantage (Medicare Part C) enrollees over three years and found a direct relationship between missed adherence measures and increased healthcare utilization and costs. Plans cannot afford underperforming pharmacies in their networks, and they're getting more sophisticated about identifying them.

‍

For independent pharmacies, this is both a risk and an opportunity. The same close patient relationships that define independent pharmacy practice, daily touchpoints, continuity of care, community trust, are exactly what it takes to drive the metrics that matter.

‍

The Measures That Matter Most to Your Pharmacy

‍

Not every Star Rating measure involves your pharmacy. Consumer Assessment of Healthcare Providers and Systems (CAHPS) surveys, health outcomes, and administrative measures are outside your direct control. But the pharmacy-adjacent measures are squarely in your hands.

‍

Medication Adherence (Triple-Weighted)

‍

These are the big three. CMS uses a calculation called Proportion of Days Covered (PDC) to measure how consistently patients fill their prescriptions throughout the year. PDC is defined as the percentage of days in a measurement period covered by prescription claims on file.

‍

The threshold that matters: 80% PDC. CMS considers a patient adherent if they have their medication on hand at least 80% of the time, which is the minimum threshold for most medications to achieve clinical benefit.

‍

The three PDC-based adherence measures are:

‍

‍

Each of these measures is triple-weighted, meaning they carry three times the influence of a standard measure on a plan's overall Star Rating. Together, they account for approximately one-third of a plan's Part D summary rating. For the 2026 measure year, CMS is temporarily reducing these to single-weighted (with an expected return to triple-weighting in 2027) and introducing sociodemographic status (SDS) risk adjustment to account for patient complexity factors like low-income subsidy status and dual eligibility.

‍

From 2024 to 2025, average ratings for all three adherence measures ranged between 3.2 and 3.4 stars, with two of the three declining year-over-year. There is significant room to move these numbers, and independent pharmacies are positioned to do exactly that.

‍

Medication Safety

‍

Plans are also measured on high-risk medication use in elderly patients, specifically:

• Use of High-Risk Medications in the Elderly (HRM): Tracks whether patients 65 and older are being dispensed drugs flagged on the Beers Criteria as potentially inappropriate.
• Polypharmacy Measures: Some plans track concurrent use of multiple CNS-active medications or opioid-benzodiazepine combinations.

‍

Catching these before the claim hits is where a pharmacist's clinical judgment directly affects plan performance.

‍

Medication Therapy Management (MTM) Completion

‍

Plans must operate MTM programs for high-risk Medicare Part D patients. The MTM completion rate for Comprehensive Medication Reviews (CMRs) is a rated measure. When your pharmacy conducts CMRs through platforms like Outcomes or Mirixa, you're directly contributing to the plan's score, and many plans offer bonus payments for high MTM completion rates.

‍

Statin Use in Persons with Diabetes (SUPD)

‍

This measure tracks whether patients with diabetes are prescribed a statin. It's a prescriber-driven measure, but pharmacists who identify gaps and close them via therapeutic recommendations or collaborative practice agreements can influence the number.

‍

How Star Ratings Connect to Your Reimbursement

‍

This is where things get concrete for your P&L.

‍

Preferred Network Inclusion

‍

Health plans build preferred pharmacy networks based partly on performance data. Pharmacies with higher adherence scores and clean safety records are more likely to be included in preferred tiers, where patient cost-sharing is lower. Lower cost-sharing means plan members are steered toward your pharmacy. Higher foot traffic and fill volume follow.

‍

Performance Measures and Reimbursement Tiers

‍

Beyond Star Ratings, health plans set their own pharmacy performance measures, which can account for up to half of a plan's overall CMS Star Rating. These performance measures directly influence your pharmacy's reimbursement rates and continued network participation. Pharmacies that score well may receive bonus payments; pharmacies that score poorly face reduced reimbursement or network removal.

‍

The DIR Fee Legacy (And Why It Still Matters)

‍

Direct and Indirect Remuneration (DIR) fees were notoriously tied to Star Ratings-adjacent performance metrics. A May 2022 CMS Final Rule effective January 1, 2024 eliminated retroactive DIR fees in Medicare Part D, requiring all fees to be reflected at the point of sale rather than clawed back weeks or months after dispensing. This created clarity but also compressed margins for many pharmacies that had factored deferred DIR into their cash flow planning.

‍

While retroactive DIR is gone, performance-based fee structures have not disappeared. PBMs continue to use adherence metrics, generic dispense rate (GDR), and net promoter scores as benchmarks. Pharmacies that understand the connection between Star Rating measures and performance metrics are better positioned to negotiate contracts and anticipate reimbursement changes.

‍

What "80% PDC" Actually Looks Like in Practice

‍

The 80% PDC threshold is straightforward on paper. In practice, a lot of patient behavior works against it.

‍

Common PDC killers:

• Patient picks up a 30-day supply but doesn't come back for 40 days
• Patient fills at multiple pharmacies (claims split across providers)
• Early refills denied by insurance, creating coverage gaps
• Vacation supplies, samples, or manufacturer coupons not captured in claims data

‍

For a patient on a statin taking a 30-day supply, a single two-week gap in coverage can drop their annual PDC below 80%.

‍

The patients most likely to have PDC gaps are the same ones who need the most clinical attention: patients managing multiple chronic conditions, patients on complex regimens, elderly patients with transportation barriers or cognitive challenges.

‍

Plugging these gaps requires a combination of proactive outreach and streamlined internal workflows. Platforms built for independent pharmacy operations can automate the trigger points that matter most, flagging patients before a gap opens rather than after it already hurt your score.

‍

What Independent Pharmacies Can Do Right Now

‍

Below are direct interventions with measurable impact on your PDC scores, network standing, and reimbursement.

‍

1. Implement Appointment-Based Medication Synchronization (ABMS)

‍

Medication synchronization (MedSync) is the single highest-impact adherence intervention available to a community pharmacy. It bundles a patient's chronic medications to a single monthly pickup date, reducing gaps caused by missed refills and complicated schedules.

‍

A study published in the Journal of the American Pharmacists Association found that MedSync improved EQuIPP scores, increased prescription volume, and reduced high-risk medication use in elderly patients at independent pharmacies. A separate RAND study published in the Journal of Managed Care & Specialty Pharmacy (JMCP) showed statistically significant PDC improvements for statins (8.4%) and antihypertensive drugs (4.9%) after one year in a comprehensive pharmacy model built around adherence programs.

‍

The National Community Pharmacists Association (NCPA) offers a free MedSync program to help independent pharmacies get started.

‍

2. Get Into EQuIPP

‍

The Electronic Quality Improvement Platform for Plans and Pharmacies (EQuIPP), developed by Pharmacy Quality Solutions (PQS), is the performance benchmarking tool that health plans use to evaluate your pharmacy. It covers over 95% of community pharmacies and displays pharmacy-level adherence scores using adjudicated claims data from over 90% of Medicare Part D lives.

‍

EQuIPP lets you:

• See your PDC performance by measure and by health plan
• Identify which specific patients are non-adherent and by how much
• Benchmark your performance against other pharmacies in your state and the top 20% nationally
• Track improvement over time as you implement interventions

‍

3. Prioritize MTM Completions

‍

Every completed CMR through Outcomes or Mirixa contributes directly to a plan's MTM completion rate measure. High MTM completion rates improve plan scores and, increasingly, health plans are offering bonus payments to pharmacies that outperform benchmarks on MTM.

‍

Think of MTM not just as a clinical service but as a billable quality lever. A pharmacist completing two to three CMRs per week, consistently, can meaningfully shift a plan's MTM score over a measurement year.

‍

4. Screen for High-Risk Medications in Elderly Patients

‍

Before dispensing, run a Beers Criteria check on every patient 65 and older. Your pharmacy management system (PMS) may already flag these. If not, most MTM platforms and some PDC tools include HRM screening. A single intervention — calling the prescriber, recommending an alternative, documenting the recommendation — can prevent a negative measure event and protect the patient from unnecessary risk.

‍

5. Identify and Close PDC Gaps Proactively

‍

Don't wait for EQuIPP to tell you a patient is non-adherent. Use your dispensing data to flag patients who are approaching a coverage gap. Standard triggers:

• Patient hasn't refilled within five days of when they should have run out
• Patient's last fill was a 30-day supply and it's been 28+ days
• Patient missed a MedSync pickup

‍

A direct phone call from a pharmacist or tech, not an automated text, is consistently more effective at driving refill completion. For patients with significant barriers, a conversation about 90-day supplies or mail order may also close the gap.

‍

The pharmacies consistently hitting preferred network benchmarks aren't doing this manually. They're building repeatable outreach workflows that run in the background of daily operations, so no at-risk patient slips through without a touchpoint. That's where purpose-built pharmacy operations platforms earn their keep.

‍

2025 and 2026: What's Changing

‍

CMS updates the Star Ratings methodology annually, and the 2026 changes are significant enough to require attention now.

‍

Sociodemographic Risk Adjustment on Adherence

‍

Starting in measurement year (MY) 2026, CMS will adjust adherence scores to account for sociodemographic factors: age, gender, low-income subsidy (LIS) status, disability, and dual eligibility. This is a meaningful shift that recognizes pharmacies serving higher-complexity populations have historically faced a structural disadvantage in adherence benchmarks.

‍

Temporary Reduction in Adherence Weighting

‍

For MY 2026 only, the triple-weighted adherence measures will be reduced to single-weighted. The expectation is a return to triple-weighting in 2027. This is a one-year window where adherence measures carry less influence on plan scores, but it does not mean you should reduce focus. Health plans will still track PDC internally, and network decisions are made over multi-year performance windows, not single snapshots.

‍

IP/SNF Stay Removal from PDC

‍

Days during which patients are hospitalized or in skilled nursing facilities (IP/SNF stays) will no longer be excluded from PDC calculations in MY 2026. Historically, these days were removed, which meant hospital stays didn't hurt a patient's adherence score. Going forward, they will count against coverage. For your patients with significant acute care utilization, expect PDC scores to be more volatile. This puts a premium on fast re-engagement after discharge.

‍

The Independent Pharmacy Advantage

‍

Here's something that doesn't get said enough: independent pharmacies are structurally better suited to drive adherence than chain pharmacies, when they use the right tools.

‍

The patient relationships, the continuity, the community trust, the pharmacist who knows a patient is having a rough month financially, none of that exists in the transaction model that defines high-volume chain dispensing. Research consistently shows that lower-income, older, and rural patients are more likely to rely on independent pharmacies and demonstrate stronger adherence when they do, particularly in communities where independent pharmacies are the primary point of care.

‍

The gap is in operationalizing that advantage. MedSync, EQuIPP tracking, proactive PDC gap outreach, and MTM completion are the infrastructure that turns relationship-based care into measurable performance data that health plans can see and reward.

‍

Key Takeaways for Independent Pharmacy Owners

‍

• CMS rates health plans, not pharmacies directly. But health plans rate your pharmacy using the same measures, and those scores determine preferred network access and reimbursement tiers.
• The three triple-weighted adherence measures (diabetes, hypertension, statins) account for roughly one-third of a plan's overall Star Rating. They are your highest-leverage performance targets.
• PDC 80% is the threshold that separates adherent from non-adherent. One missed refill in a 30-day supply cycle can drop a patient below it.
• EQuIPP is your report card. If you're not using it to monitor your performance by plan and by measure, you're missing the tool that health plans already use to evaluate you.
• MedSync is the highest-impact adherence intervention available in a community pharmacy setting, with peer-reviewed data backing the PDC improvement.
• MY 2026 brings changes including SDS risk adjustment, temporary single-weighting of adherence measures, and IP/SNF removal from PDC exclusions. Plan for them now.

‍

Star Ratings were built to measure health plans, but they function as a performance review for every pharmacy in a plan's network. Independent pharmacies that understand the mechanics, monitor their EQuIPP scores, and build adherence-focused workflows around their patient populations will hold their preferred network positions, protect their reimbursement rates, and make a credible case to health plans that they're worth keeping. The ones that don't will keep losing scripts to competitors who do.

‍

Sources: CMS 2025 Star Ratings Technical Notes | AJMC: Medication Adherence Star Ratings Measures | AnewHealth: Driving Medicare Star Ratings with Medication Adherence | Arine: Medicare Advantage Star Ratings MY2026 | EnlivenHealth: Performance Measures, Star Ratings, and What They Mean for Your Pharmacy | Pharmacy Times: Benefits of Medication Synchronization | PQS EQuIPP Welcome Guide | Frier Levitt: Post-DIR Planning for Independent Pharmacies

‍