The U.S. Centers for Medicare and Medicaid Services (CMS) has once again stepped up its oversight of Accrediting Organizations (AOs).[1] On December 18, 2018, CMS issued a Request for Information (RFI) seeking to determine whether AOs have a conflict of interest between their governmental contract and their private business. See “Medicare Program: Accrediting Organizations Conflict of Interest and Consulting Services; Request for Information,” 83 FR 65331. CMS will accept responses to the RFI until February 19, 2019.

Partly in response to a 2017 article in the Wall Street Journal and to concerns voiced thereafter by Congress, CMS is now asking whether AOs may have a conflict of interest when they provide private fee-basis consultation services to healthcare providers in addition to determining whether those same healthcare providers satisfy the quality standards for Medicare/Medicaid certification. CMS is concerned that such a conflict of interest may undermine public trust in the integrity of Medicare/Medicaid certification. The types of private consultation services that CMS identified as potentially problematic are:

• Assistance for health care provider leadership in understanding the AO and CMS standards for compliance;
• Review of facility standards and promised early intervention and action through simulation of a real survey, similar to a mock survey to include comprehensive written reports of findings;
• Review of a facility's processes, policies and functions;
• Identification of and technical assistance for changing and sustaining areas in need of improvement; and
• Educational consultative services.

CMS asks the public to inform it whether healthcare providers find these AO consultation services valuable; whether other entities can perform similar services; whether AOs have sufficient firewalls between the governmental and private consulting functions to avoid conflicts of interest; whether AOs would remain financially viable if they were prohibited from performing private consultation functions; and whether other safeguards can and should be put in place. CMS intends to use the information gathered from the RFI to consider issuing a proposed rule addressing AO conflict of interest if it deems rulemaking to be necessary.

This RFI builds upon two other AO oversight initiatives that CMS announced earlier this year, which we reported on in October. CMS was concerned that AOs do not cite the same level of provider non-compliance with the Medicare/Medicaid quality standards that CMS-contracted State Survey Agencies do. For hospitals and psychiatric hospitals, CMS found that the discrepancy rate was about 45% in 2017. This resulted in concerns that AOs are not adequately performing their governmental contracts. Accordingly, CMS launched a new validation survey process to enable State Survey Agencies to shadow AOs in real time when they perform Medicare/Medicaid certification surveys, and implement immediate corrections to AO performance. CMS also began publicly reporting AOs’ performance scores.

Healthcare providers that rely upon AO “deemed status” Medicare/Medicaid certification may wish to weigh in on this new CMS concern. While there is presently no overt suggestion that CMS may eliminate the deemed status program, it does appear that CMS intends to more strictly control AOs than previously—potentially diminishing the value of deemed status for providers.

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[1]AOs are private organizations that are approved by CMS to determine whether healthcare providers meet the quality standards necessary to participate in the Medicare and Medicaid programs. These quality standards are known as Conditions of Participation, Requirements for Participation, and Conditions of Coverage for various provider types.