Home health is one of the nation’s fastest-growing health care sectors. To help patients find high-quality home health agencies, the Centers for Medicare & Medicaid Services (CMS) released quarterly Quality of Patient Care star ratings, summarizing 9 quality measures beginning in July 2015 on its Compare website. In subsequent years, CMS added the requirement that inpatient providers must give patients postacute care quality information, with the expectation that the Compare website be used. As the federal government’s premier guide for those seeking high-quality home health care, it is imperative that the star ratings provide good advice to most patients.

It is unclear, however, whether the star ratings contain meaningful information. One concern is that these ratings are based on outdated data. Another is that the risk adjustment procedures are insufficient, leading to inaccurate ratings. Third, most of the measures used to create the ratings are documented by home health agencies, which could be unreliable. Understanding whether the star ratings predict quality is crucial due to the growing number of people wishing to age-in-place and increasing referrals to home health under value-based purchasing.

This study investigates whether using the highest-rated home health agency available to a ZIP code improves patient outcomes. It further examines whether outcomes were better in places where the highest-rated agencies were above average or much better than the next-best agency, hypothesizing that the effects should be more pronounced for these subgroups. In addition, to gauge the applicability of the findings, I separately examine postacute and community-entry, and rural and nonrural residents. I use a quasi-experimental instrumental variable (IV) method to examine the first 4 quarters of star ratings, using variation in patient proximity to the nearest highest-rated agency as an instrument. The main outcome measure is the number of days independently at home in the 180 days after the end of the initial home health episode. Secondary outcomes include health care setting-specific days and days deceased, and risk of hospitalization, emergency department use, and institutionalization.