WASHINGTON--Tripped up by the competitive bidding final rule, officials with CMS have done an about-face on the issue of subcontractor accreditation.

For weeks, providers were told that subcontractors involved in Medicare competitive bidding had to be accredited. But it turns out that the final rule implementing the program does not include that requirement.

"The final rule says they are not requiring subcontractors to be accredited at this point," said consultant Mary Ellen Conway, president of Capital Healthcare Group, Bethesda, Md.

"CMS has said they will not evaluate subcontractors to determine if they meet the accreditation quality, financial and eligibility standards," added Walt Gorski, vice president of government affairs for the American Association for Homecare.

The discrepancy prompted Louis Feuer, president of Dynamic Seminars and Consulting, Pembroke Pines, Fla., to question the government's methods in ensuring quality service and products for all providers to Medicare patients.

"It is astounding that the consumer is not going to be guaranteed that they will be working with an accredited company," Feuer said. "Hundreds of companies are working diligently, investing both time and money to improve their company operations, while others will apparently be allowed to service the consumer without receiving national recognition by an approved accrediting organization."

According to the final rule, CMS is apparently relying on its contract suppliers to carry the standards banner--and will hold them responsible if the subcontractors somehow fail.

"We believe that the eligibility standards, applicable accreditation standards and financial standards will ensure that contract suppliers are reputable, viable businesses and not just companies that subcontract their work," the rule reads. "In addition, we will hold the contract supplier responsible for meeting all the terms and conditions of its contract, whether or not one of those terms is actually performed by a subcontractor."

Providers depending on subcontractors must therefore be cautious about the companies they contract with, experts said.

Gorski and Conway also cautioned that providers should not see the situation as a long-term accreditation loophole.

While CMS has set an Aug. 31 deadline for accreditation of those who win contracts in the initial 10 competitive bidding areas, it has yet to set a date for accreditation of all HME providers. Conway believes the absence of a subcontractor accreditation requirement could push CMS into deciding on that date sooner rather than later.

"They are going to give us that date, and that will be someday soon," she predicted.

And just because CMS is not requiring subcontractors to be accredited now does not mean the issue is resolved. "This is a very interesting issue, the reason being that this may be left up to the individual accreditor to determine," Gorski suggested.

Sandra Canally, president of The Compliance Team, Spring House, Pa., agreed. "I thought there had to be a mistake there," she said of the final rule. But she pointed out that does not mean accreditors "are not requiring something of subcontractors. We've actually specified in our application that if what subcontractors are doing relates to patient services and equipment management, they need to meet our standards as well.

"In some cases," she added, "we are visiting the subcontractor."

News of the "mistake" did not appear to curb accreditation applications, according to Canally.

"We're down to the wire and we're still taking them," she said, noting that this week will be the cutoff for providers to get their applications in and have any hope of being accredited by the Aug. 31 deadline.

Tom Cesar, president of the Accreditation Commission for Health Care, Raleigh, N.C., said that after CMS issued the final rule in April, applications for the quarter increased more than 200 percent. While he could not guarantee accreditation, Cesar said, "what we are assuring applicants is that if they submit all of the required preliminary evidence with application and deposit by July 6, we will survey them and have results by Aug. 31."

Meanwhile, Conway advised all providers, including potential subcontractors, to start the accreditation process even if they are not in one of the initial CBAs.

"The second round is coming," she said. "They should start in September and get done by April."

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