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Should Medicare Accrediting Organizations Also Provide Consulting?

CMS is calling on stakeholders to comment on whether consulting services offered by Medicare accrediting organizations are creating conflicts of interest.

Medicare accrediting organization

Source: Thinkstock

By Jacqueline LaPointe

- CMS is questioning if the financial relationships between Medicare accrediting organizations and providers are impacting the accreditors ability to accurately determine if providers are fit to participate in the largest public payer.

Many healthcare organizations rely on CMS-approved accrediting organizations to participate in and receive payment from Medicare. The accreditors have the ability to certify that healthcare organizations meet Medicare conditions of participation (CoP) or conditions of coverage or certification (CfC).

Some Medicare accrediting organizations also offer providers consulting services, such as compliance assistance, identification of and technical assistance for modifying and sustaining areas in need of improvement, and reviews of facility standards.

Healthcare organizations pay the accrediting organizations a fee for the consulting services.

In a new Request for Information (RFI), however, CMS is wondering if consulting fees imposed by Medicare accrediting organizations on providers for the services create conflicts of interest when the accrediting organization also assesses the provider for participation in Medicare.

“We are concerned that the practice of offering both accrediting and consulting services – and the financial relationships involved in this work – may undermine the integrity of accrediting organizations and erode the public’s trust,” CMS Administrator Seema Verma stated in a press release.

“Our data shows that state-level audits of healthcare facilities are uncovering serious issues that AOs have missed, leading to high ‘disparity rates’ between the two reviews. We are taking action across-the-board to ensure the quality and safety of patient care through strengthened CMS oversight of AOs, and today’s RFI is a critical component of that effort.”

The disparity rate is a key indicator of whether a Medicare accrediting organization is accurately identifying deficiencies in healthcare organizations.

Disparity rates are comparison rates based on the accrediting organization’s findings of non-compliance during their survey and the state agency’s findings of non-compliance for the same facility during a state validation survey, CMS explained. CMS counts whole surveys as disparate if the state agency finds just one missing condition in the accrediting organization’s survey.

According to the most recent data from CMS, disparity rates in FY 2017 were 46 percent for hospitals, 57 percent for psychiatric hospitals, 44 percent for critical access hospitals, 18 percent for home health agencies, 18 percent of hospices, and 35 percent for ambulatory surgery centers.

Healthcare stakeholders have been wondering if CMS is doing enough to improve disparity rates and the quality of reviews for Medicare accrediting organizations.

Specifically, a September 2017 Wall Street Journal report called out the Joint Commission, which provided accreditation for almost 80 percent of hospitals at the time.

The report stated that the Medicare accrediting organization rarely revoked or modified accreditation even when state inspectors found patient safety violations. For example, the Joint Commission did not modify the accreditation of a Massachusetts hospital despite a report from CMS citing the failure of quality medical care as the reason for three patient deaths.

Reporters posited that the Joint Commission’s consulting services may have influenced the accrediting organization’s modification or revocation habits.

The report prompted House Representatives to urge CMS in March 2018 to reevaluate the rigor of its accrediting organization survey process, which is used to approve or deny applications.

CMS is now asking stakeholders to recommend ways to improve the Medicare accrediting organization approval process to prevent organizations with conflicts of interest from certifying hospitals. The federal agency specifically wants stakeholders to comment on a potential alternative for conflicts of interest.

In the RFI, CMS suggested that the agency revise the review process for Medicare accrediting organizations to better identify actual, potential, or perceived conflicts of interest as part of the application and renewal processes.

“We believe that…by adding additional provisions which would require the AOs to disclose information about any consultative services provided by the AO to facilities which the AO accredits would further enhance oversight of AOs with CMS-approved accreditation programs; this would allow CMS to identify consultative relationships that create real, potential and perceived conflicts of interest,” the RFI stated.

“We are also considering adding similar provisions to the requirements for accrediting organizations that provide accreditation to providers and suppliers that must be accredited in order to receive payment from Medicare for services they furnish to Medicare beneficiaries.”

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