On Thursday, federal government released a new five-star rating system for home health agencies. The government hopes that the system will help provide clear picture of this part of the medical industry.

The new quality measure has been applicable on more than 9,000 agencies. Medicare stated that the ratings are based on factors like when visits started and improvement in patient's condition under their care, among other factors.

Almost 50% of the agencies have received average scores; 46% received 3 and three-and-a-half stars. Top rating was given to 239 agencies and 195 received one-and-a-half star.

The agencies play an important role in taking care of elderly. In that scenario, the ratings will prove beneficial. As per a data, 3.4 million Medicare beneficiaries had received home health services.

For government and patients, Medicare's home health visits are one of the most cost-effective ways of care. It is very difficult for patients and doctors to assess quality. Patients and especially elderly are not much aware of the home health agencies' reputation in comparison to hospitals.

This factor makes assessing quality even more difficult. Dr. Cheryl Phillips, an executive at LeadingAge, said, "You can call the agencies and find out a little bit about them and their philosophy of care, but even for an informed consumer like me, you're kind of stuck with whatever your physician has ordered".

Ratings could affect agencies financially and there are chances that some-low rated agencies may go out of the business. Hospitals, doctors and nursing homes may not suggest patients to such agencies that had received less than three stars.