What You Should Know about Accreditation

In August of 2006, The Centers for Medicare & Medicaid Services (CMS) issued a final rule that established requirements for accreditation of DMEPOS suppliers in laying the groundwork for the Medicare DMEPOS Competitive Bidding Program. That rule detailed the process for selecting the independent accrediting organizations that would apply CMS quality standards to all DMEPOS suppliers.

Competitive bidding will be phased in over three years with ten of the largest metropolitan statistical areas (MSAs) starting in 2007. Eighty MSAs will be in the program by 2009 and other selected areas after 2009. In November, CMS named ten national accreditation organizations that will be eligible to accredit DMEPOS entities and have deeming authority for participation as a Medicare supplier. Many DMEPOS facilities are already voluntarily accredited by one or more of the organizations. Accreditation will be mandatory to obtain and maintain a Medicare supplier enrollment number. CMS has not yet set a deadline for suppliers to become accredited, except that those in the competitive bidding program areas will need to be accredited before submitting their bids.

What should a DMEPOS facility understand about accreditation and accrediting organizations? For openers, each supplier location requires separate accreditation, and accreditation contracts have seldom been negotiable. Accreditation means that the supplier meets the CMS clinical and business quality standards for the items and services offered. While there are ten approved accrediting organizations, they are not all the same. Accreditation from any of the ten will initially allow a supplier to file Medicare claims and submit competitive bids. CMS has developed quality standards for approved accrediting organizations to survey, and CMS will monitor the accreditors carefully. When accredited suppliers are identified through complaints or by not meeting CMS quality standards, the accrediting organization of these suppliers may be evaluated as well. It is possible that some current accrediting organizations could lose deeming authority. Therefore, it is important that a supplier pick an accrediting organization that has a solid reputation and long history for maintaining high standards, accredits entities that also have good reputations, and does not market itself as an "easy" accreditation.

The distinctions between voluntary and mandatory accreditation are immense. Mandatory accreditation contracts should limit the scope of services to accreditation alone. Avoid provisions that add related services such as quality-measurement reporting, data gathering, or other administrative services, even if desirable. Conflicts of interests are likely when the accreditation organization does business either directly or through an affiliate with a supplier it is asked to accredit or wants to use data obtained from the survey process for its own commercial purposes such as group purchasing.

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) puts accreditation organizations in a unique business-associate position. HIPAA requires that covered entities determine what information is necessary for a business associate to achieve its purpose and disclose only the minimum necessary amount of protected health information for the business associate to perform its services. Accreditation and business-associate contracts need to be specific when providing the information needed for the survey. Some accreditation contracts include an indemnification provision requiring the supplier to hold the accrediting organization harmless for all claims of professional liability. While not unreasonable, there should be a reciprocal hold harmless provision in the contract whereby the accreditation organization indemnifies the supplier under appropriate circumstances. Some suppliers stand to go out of business when they arguably meet all standards but are unexplainably denied accreditation. Be sure the appeal process for denial is fair and reasonable. The scope of services to be provided by the accreditation organization, and its accreditation standards should not significantly differ from the quality standards required by CMS. Operational policies and procedures must comply with the spirit and intent of both sets of standards.

While failure to achieve mandatory accreditation will be devastating, it will be almost as devastating to be accredited by an organization that fails to maintain its CMS deeming authority. CMS knows that all potential suppliers do not meet their quality standards. Some suppliers will look to the accrediting organization with the lowest cost, the least burdensome survey procedures, and highest "pass rate." That may be a mistake. Maintaining meaningful accreditation is what should be important to any supplier with a long-term vision.

Accreditation is intended to reflect a minimum level of quality and competence; however, that should not be your goal. It is only logical that Medicare will become more selective using its accreditation experience. Accreditation is one way for Medicare to enhance quality while minimizing the cost of DMEPOS. Supplier networks developed to service both the Medicare Competitive Bidding Program and managed-care organizations should consider mandating a particular accreditation organization in order to standardize a higher level of expectation and assure payers and their beneficiaries of quality, cost-effective products and services from network suppliers. After all, that is what accreditation is all about, is it not?

John Latsko is a partner in the health law practice of Schottenstein, Zox & Dunn, Columbus, Ohio. He can be contacted at 614.462.2329; jlatsko@szd.com .

What You Should Know about Accreditation

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