The Healthcare Effectiveness Data and Information Set (HEDIS) is a tool used by more than 90 percent of American health plans to measure performance on important dimensions of care and service. HEDIS consists of 81 measures across five domains of care. The National Committee for Quality Assurance (NCQA) collects HEDIS data directly from health plan organizations and providers for multiple purposes via the Healthcare Organization Questionnaire (HOQ), and non-survey data through the Interactive Data
Submission System (IDSS). Commercial HEDIS data is used to calculate national performance statistics and benchmarks, as well as   to set standards for NCQA Accreditation. Commercial data is also
included in the NCQA’s Quality Compass® tool. The NCQA also collects Medicare HEDIS data on behalf of the Centres for Medicare & Medicaid Services (CMS), and Medicaid HEDIS data on behalf of state agencies. In addition, NCQA collects commercial statistics on behalf of some states and the U.S. Office of Personnel Management for health plan report cards. The CMS requires all Medicare Advantage managed care plans to report HEDIS information. The Federal Employees Health Benefits program has
also recently adopted HEDIS reporting initiatives, and numerous states that offer Medicaid managed care plans are also required to report HEDIS performance measures.

Health plans annually collect HEDIS statistics for reporting in the upcoming year. Analysing this  information makes it possible to compare the performance of health plans on a verifiable and credible basis. Medicare Advantage plans are given a yearly Star rating based on its performance on pre-defined HEDIS measures, with other various plans and marketplaces also providing ratings based on HEDIS measurements as well. These ratings are published in the open market A hypothetical impact of HEDIS on plan reimbursement is noted below: to help consumers pick plans that meet their requirements. A higher rating helps the organization earn bonus payments and rebates from the government.