CMS recently announced that providers must be accredited or have applied for accreditation by May 14, 2008, in order to submit a bid for the second round of competitive bidding, and that all providers must be accredited by Sept. 30, 2009, in order to continue doing business with Medicare.

Given these deadlines, now is an ideal time for all providers to sharpen their focus on some of the key issues associated with the overall HME accreditation process.

The direct and indirect costs involved in preparing for and maintaining accreditation continue to grow. In addition, providers are confronted with increasing challenges associated with a changing HME marketplace.

All providers, regardless of their current accreditation status, should seek to gain a better understanding of the issues and costs associated with preparing for and maintaining accreditation. Remember that the accrediting bodies are not the same: They do not have the same approach, the same process or the same fees.

Providers that plan well and do their research will be in a position to make more prudent choices among the various accreditation options. Moreover, they will be able to make more informed decisions on how to best utilize their scarce resources.

While it is not a given that competition among CMS' 10 approved accreditation organizations will increase with the recent deadline announcements, it is safe to assume that providers can (and should) expect more options and greater flexibility from accreditors when it comes to selecting an organization that fits their operational style and organizational structure.

Overall, most accreditation experiences tend to be favorable, yielding positive benefits for the majority of providers. However, the relationship between some providers and accreditation organizations has not always been smooth; stories of surveyors who are focused on tripping up staff or searching out flaws are not difficult to find.

Given the likelihood of increased accreditation options — and considering the challenging reimbursement environment — providers should expect a more customer-focused and educationally oriented approach to accreditation.

In short, providers need to ensure they are receiving real value from the process and not merely choosing accreditation in order to meet the Medicare requirement.

To gain a better insight into providers' thoughts on accreditation, HomeCare magazine, in collaboration with Lean Homecare Consulting Group, surveyed HME providers on both obtaining and maintaining accreditation.

Of 459 providers participating in the survey (which was fielded before CMS' round two announcement), a majority (61 percent) said they are currently accredited. Of those that are not, 86 percent said they plan to apply and, in fact, 35 percent have already begun the accreditation process.

Customer Service

With 56 percent of the survey's respondents operating in one or more of the MSAs in rounds one and two of competitive bidding, the choice to become accredited is an easy one.

For all providers participating in the survey, both those seeking accreditation and those who are currently accredited, “service provided by accreditor” is the top reason for selecting an accreditation organization. While unaccredited providers said the accreditation fee is an important factor, the quality of customer service is an even bigger consideration.

Providers that are already accredited said they based their selection on service and the type of survey process.

When comparing accrediting bodies, providers need to think of themselves as a customer of the accreditation organization — after all, they are paying for a service. As with any normal customer relationship, the customer has certain expectations they want to be met (or exceeded) based on their payment.

Quality customer service means the accreditation organization is responsive to questions and concerns. While it is important for providers to meet the required accreditation standards, they should also expect surveyors and their organizations to be flexible when unique situations arise.

To borrow a term from Medicare, a certain level of “inherent reasonableness” should apply to accreditation standards and surveyors' tactics. Providers should also expect to be treated in a courteous and respectful manner throughout the entire accreditation process.

Twenty-one percent of responding providers said they have changed accreditors for various reasons, including poor service and inflexible attitudes among surveyors. For example, weak customer service and too much focus on finding “dings” while offering little or no real improvement advice were cited by a number of providers as reasons for making a change.

Some providers who are already accredited commented they chose their accreditation organization because it was “geared toward” their business operation or was “understanding of our type of business.”

Understanding the survey process is also an important factor to consider when selecting an accreditor, meaning providers should have a good feel for the amount of paperwork and follow-up that will be required as a part of the process. This is another element of accreditation that can vary greatly among accrediting organizations. The complexity of an accreditor's standards and the frequency of revisions to those standards are other important aspects to consider.

Accreditation Economics

While it did not register as the most important selection factor, the cost of accreditation should certainly be on providers' list. For accredited providers participating in the survey, the total cost per location for one completed accreditation cycle averages $6,173. It appears that economy of scale does have some positive impact: For those providers with only one location, the average cost is $7,110, compared to $5,190 per location for providers with 10 or more locations.

When assessing total costs per location, it would be wise to include the cost of a compliance officer in any calculations. Accredited companies are more likely to have a compliance officer than those who are not accredited (94 percent vs. 65 percent).

And, while the explicit costs of obtaining and maintaining accreditation are straightforward calculations, providers must also consider the implicit costs associated with accreditation.

Implicit costs are less defined and more difficult to quantify. For example, time spent preparing for and maintaining accreditation is time that cannot be spent elsewhere in the operation. These “opportunity costs” are not reflected on financial statements, but they represent real costs nonetheless. Generally, opportunity costs will increase as the complexity of the accreditation process increases.

For example, here are some of the other costs that should be taken into account:

• Consultants

• Preparatory costs (including any overtime or hiring temps to assist, etc.)

• “Beautifying” your location prior to a survey (scrubbing floors, painting, detailing vehicles, etc.)

• Ongoing staff training

• Complying with current and new or changed standards

• Advertising your status as an accredited HME, and updating marketing materials

• Lost productivity preparing for an impending survey

• Addressing supplemental recommendations or conditional accreditation

• Benchmarking costs

• Purchasing accreditation materials/manuals/videos

• Data gathering/monitoring, and maintaining data (include any software/hardware required)

• Active costs (costs incurred during the actual survey)

In terms of preparing for accreditation, 64 percent of providers expect to receive assistance from their accreditation organization; 49 percent will buy materials from an accreditation preparation service; 18 percent plan to hire a consultant; and 20 percent expect to work through the accreditation process entirely on their own.