Accreditation Twist: Pharmacy Chains Can Opt Out Branches

BALTIMORE — CMS held a Special Open Door call Oct. 13 to
clarify confusion over pharmacy exemption from DMEPOS accreditation
requirements under new provisions of the Affordable Care Act (ACA),
and the steps pharmacies should take now.

Sandra Bastinelli, senior technical advisor of CMS’ Center for
Program Integrity, said accreditation requirements will not apply
to pharmacies if they meet all of three criteria: 1) total billings
for DME sales must be less than 5 percent of total pharmacy sales
for the previous three calendar years; 2) the pharmacy has been
enrolled as a DMEPOS supplier with a provider number for at least
five years; 3) no final adverse actions have been imposed on the
pharmacy over the last five years, and the pharmacy has not been
revoked from any federal programs.

The National Supplier Clearinghouse will send a letter to
pharmacies that are not currently accredited attesting to
the fact that they are not required to be accredited — as
long as they meet the three criteria. Pharmacy owners can expect to
get these attestation letters by the end of October.

Upon receipt, they must confirm the facts, the letter must be
signed by the company’s authorized official and it must be sent
back before Jan. 1, 2011. The NSC will follow up with those that
have not properly completed the attestations.

For pharmacies that won’t receive the letter since they
are currently accredited, CMS’ Barry Bromberg said a copy
of the attestation letter would be posted and available for
download on the NSC website (www.palmettogba.com) by mid-November. The
letter needs to be completed and submitted to the NSC to request
the exemption.

Beginning next year, CMS will randomly audit 10 percent of
pharmacies determined to be exempt from the accreditation
requirement to make certain they actually do meet the attested
criteria. According to Bromberg, the ACA does not actually specify
10 percent, but CMS thought the number was “appropriate.” Bromberg
also reported that the NSC has already prepared a list of eligible
pharmacies.

The CMS officials advised pharmacies planning to drop their
accreditation to wait until an exemption letter from the NSC has
been received.

The biggest news from the Open Door call, however, is that under
the new health reform law, pharmacy chains — which had been
designated as those with 25 or more locations — can now opt
out individual locations from the accreditation requirement.

“Each location has an enrollment number. If the location is part
of a larger company as in a chain, the location must still
individually meet the exemption criteria,” Bastinelli said. Since
all chains are currently accredited, she noted, they would not
automatically receive the attestation letter and would have to send
it in to apply for the exemption.

“If those locations are accredited and you believe that some,
but not all, meet the exemption, once the attestation letter is up
on the Web, you can certainly send in that attestation and get that
stamp of approval, so to speak, from the NSC,” Bastinelli said.

Added Bromberg, “The plan is that if you send in an attestation,
we will send you a confirmation by mail. And that confirmation will
either say we accepted it, or if for some reason we do not agree
with what you have sent in, we will give you an explanation as to
why we disagree. For those [letters] that we are sending out,
invariably I think it is going to be extremely few that we are ever
going to challenge, because we have already prescreened to see that
you have met [the criteria].” However, he added, attestation
letters from those pharmacies not on the NSC’s list could draw
additional scrutiny to make sure the exemption criteria are
met.

Accreditation consultant Mary Ellen Conway, president of Capital
Healthcare Group in Bethesda, Md., wondered if the individual
location exemption would work for smaller chains as well.

She questioned Bastinelli on the following scenario: “How would
that work for an organization that is not a large chain
organization, but a group of pharmacies that are small regional
players that might have 20 or so offices, 15 of which they have had
for the last five years. And they are accredited right now, but
they will be looking at renewal in the next few months trying to
decide if they should renew. What if they buy a new store at some
point? Obviously all new stores have to be accredited. Do they have
to maintain the accreditation for that entire group, or can they
drop individual locations?”

Replied Bastinelli, “Because the law has changed since the
accreditation requirements became imposed … and since the ACA
does state very clearly by enrollment number, and since enrollment
number is by location, we are going to have to allow pharmacies to
ask for an exemption for those stores that they believe meet all of
the criteria.”

Contacted after the call, Conway said, “The big thing, which I
find amazing, is that from day one we had a rule that common
ownership required accreditation of every piece of the puzzle. You
had to look at every common ownership opportunity and make sure
that every DME location was accredited. Now, an organization with
common ownership of any number of locations can opt out any of
their locations. That is a huge takeaway from the Open Door
Forum.

“The requirement has always been that whether you had 25 or 300
stores, you had to be sure that every one was accredited, because
common ownership was the criteria,” Conway said, “and that is what
the accreditors required.”

CMS said a replay of the call would be posted to the Special Open Door website around Friday, Oct. 22.