Subcontractor Accreditation? Not Right Now, According to Rule

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.”