CMS: Accreditation to Begin With 10 MSAs

BALTIMORE--Mandatory accreditation for Medicare DME suppliers will start with the 10 metropolitan statistical areas where competitive bidding will take place in 2007, a CMS official said last week.

Confirming what insiders have been speculating for some time, the announcement that accreditation will be implemented in stages was made during a special CMS Open Door Forum on the newly released draft of quality standards for suppliers (see HomeCare Monday, Sept. 26). The forum, which included attendance of 65 and another 420 phone participants, was held last Monday as part of a scheduled meeting of the government's Program and Advisory Oversight Committee, a 22-member panel that is advising CMS on national competitive bidding.

Eventually all DMEPOS suppliers who want to participate in Medicare will have to meet the quality standards--including business and product-specific requirements--which will be applied by CMS-approved accrediting bodies as mandated under the Medicare Modernization Act.

But frustration and confusion with the proposed standards--and CMS--was apparent following release of the draft, developed by CMS contractor Abt Associates, Cambridge, Mass. Before the meeting started, stakeholders scrambled to make sense of the 104-page document, which was released on Sept. 23, the Friday before the Monday PAOC meeting.

"I appreciate the detail and the work that's gone into the document, but I was a little concerned that we only had in essence a business day to review a 100-page document to provide some comments," Don Clayback, senior vice president of networks for Lubbock, Texas-based The Med Group, told CMS during the forum.

CMS also announced a revised timeline for the process, raising new concerns that providers who want to take part in Medicare's DME bid may not have enough time to get accredited before 2007. According to Linda Smith, CMS project officer, the final quality standards now will likely be published in March or April of 2006, at the same time that the 10 MSAs where bidding is to begin will be announced. Only then, after the stardards are finalized, will the agency release information on how accreditation organizations can apply for "deemed status" to become official accrediting bodies.

Clayback estimated that, according to the CMS timeline, selection of the accreditors would occur in the summer or fall of 2006. Smith responded with few details: "When the rule is final and published, we will then provide the Federal Register notice to receive application from accreditation organizations. I cannot give you a specific date."

Previously, approved accreditors were expected to be named by the year's end or by early 2006 at the latest.

"It's not the progress we thought would be made by this time this year," said forum attendee Mary Ellen Conway, president of Capital Healthcare Group, a Bethesda, Md.-based health care consulting firm. "I think it's frustrating because it really doesn't move the process along in a timely manner."

Providers who are already accredited by one of several current HME accrediting bodies could be grandfathered in--but only if those organizations' standards meet the final CMS standards, according to Smith.

"How do they expect suppliers to go forward and prepare? CMS is not giving them the information they need," said PAOC member Seth Johnson, director of government affairs for Exeter, Pa.-based Pride Mobility. "There's a lot of apprehension out there to go forward with accreditation when [providers] are not confident the agency they're going with will be grandfathered."

About Those Quality Standards
Some industry stakeholders say that in their current form, the proposed supplier standards are both confusing and impractical. The draft document focuses on two areas: business standards and product-specific requirements for providers who specialize in particular categories, such as oxygen, support surfaces and power wheelchairs. Several proposed financial requirements were singled out by attendees as cause for concern.

"It was clear to me that, overall, the people who prepared the draft report had real gaps in understanding of HME operations and of health care," said Wallace Weeks, president of Weeks Group, a Melbourne, Fla.-based strategy consulting firm.

For example, he noted after the meeting, one of the financial requirements calls for an audited financial statement, something that he said is completely unrealistic for a small provider. Although the standards do not specify whether the audits need to be internal or external, it could cost a provider from $6,000 to $7,000 to have one completed by a CPA. "This is an asinine requirement," he said. "If providers are going to be required to have a CPA complete an audited financial statement on an annual basis, this will pose an insurmountable problem for the industry."

A requirement to notify CMS of "potential adverse financial operations" that could lead to delayed payments or bankruptcy disturbed Tim Pederson, president and CEO of WestMed Rehab, Rapid City, S.D. "That's very ambiguous, very vague, and it begs the question: Why is it included? All providers have financial issues like this," he told officials during the Open Door session. "Does this mean we'll be sanctioned or punished [or that] payments will be withheld, which would exacerbate the situation even more? I don't think there's a provider in this room that isn't behind in payments to one ... manufacturer or another."