Going, Going, Not Sold?
Since the passage of the Medicare Modernization Act of 2003,
industry experts have been advising DMEPOS providers to become
accredited. But with a recent statement by CMS that only 30 percent
of providers are accredited, we wonder why people have been
In 2005 and 2006, providers said they were waiting to find out
who the recognized accreditors would be. The accreditors were
announced in November of 2006, but still they waited. At that time,
many stated the reason for their delay was that they wanted to see
where the first 10 MSAs selected for competitive bidding would be.
Even though they were announced in April 2007, providers outside of
those 10 areas continued to wait.
Their next “postpone-the-process” reason was to see
if they were included in the 70 MSAs chosen for round two of
bidding. Those cities were announced in December of 2007 along with
the “drop-dead” accreditation date for all providers of
Sept. 30, 2009.
And now we hear that many of the providers who delayed becoming
accredited for any or all of these reasons want to sell their
business rather than become accredited. But a surprise announcement
from CMS in January of this year has many in this group kicking
The agency announced that any provider seeking to obtain a new
NSC number after March 1, 2008, would have to be accredited first.
This applies to the opening of a new business location as well as
the purchase of an existing business.
With this ironic twist, these providers are stuck. Without the
business being accredited, a buyer (with less than 25 stores)
cannot obtain a new NSC number for the purchase of an existing
business. How can this be? CMS is looking to curb the activities of
fraudulent providers who can close up shop in one location and
quickly set up in another before their abuse of the system is
By requiring that providers be accredited before they can obtain
a new NSC number, the expectation is that the bad apples will be
rooted out. Yet again, however, this hurts the good guys as
Some of CMS' recognized accreditation organizations can award
“conditional” or “provisional”
accreditation to a new site when they have already accredited the
parent location, but this award is subject to the unannounced
on-site survey. (Some accreditors don't offer this kind of
recognition at all.)
An unannounced survey can take from two to four months once the
accreditor is notified of the new location or that the purchase is
final. We also know that if a provider is starting the
accreditation process from scratch and the parent location is not
accredited, the process can take from four to six months to
Additionally, most state Medicaid programs require that
providers have a Medicare number first before they can receive a
Medicaid provider number. The same thing holds true for many
managed care and third-party payers.
Can we all guess what the value of a non-accredited business
that services Medicare beneficiaries for identified Part B items
and supplies became on March 1? And does this business have any
value between now and Sept. 30, 2009, if it is not accredited? We
know the answer after that date since all providers must be
accredited by that time, but now the tide has changed well before
that “drop-dead” date.
It looks like CMS just gave us the last and most important
reason to become accredited as soon as possible. Your deadline is
2009, sooner if you intend to bid in round two — and now
critical if you intend to sell your business at any
It continues to appear that CMS is throwing the baby out with
the bath water in efforts to curb fraud and abuse. While these
efforts will limit the ability of fraudulent providers, they have
just decimated the market for small, non-accredited HME businesses
that wish to sell.
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