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What You Should Know about Accreditation
By John Latsko  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. 
Table Of Contents - May 2007
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