Only suppliers included in the first phase of a medical equipment competitive bidding program will need to be accredited by the beginning of 2007, CMS says.

According to a final rule, released Aug. 1, the agency will phase in accreditation requirements to ensure that the competitive acquisition program begins on schedule next year. The Medicare Modernization Act calls for the initiative to be operational in 10 of the largest metropolitan areas in 2007.

Although all suppliers of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) ultimately must be accredited to be eligible to submit claims to Medicare, "the first priority will be to accredit suppliers in the [competitive bidding areas] for 2007," the rule notes.

The competitive bidding provision, tucked into the fiscal year 2007 final inpatient rehabilitation facility final rule, details the groundwork for independent accrediting organizations that will apply quality standards for DMEPOS suppliers.

A proposed rule on the competitive bidding initiative was issued April 25 (¹ Also see "DME Competitive Bidding Program Detailed In Proposed Medicare Regulation" - Medtech Insight, 1 May, 2006., p. 6). The agency received more than 600 comments on the accreditation provisions.

CMS Eases Financial Burden For Small Suppliers

CMS estimates that overall accreditation costs for DMEPOS suppliers will amount to $93.1 mil. between 2007 and 2011. The agency says that a three-year accreditation will cost DME suppliers approximately $3,000. Prosthetics and orthotics suppliers likely will pay $2,000 to be accredited.

Due to the anticipated expense, the final rule includes multiple strategies aimed at reducing financial burdens for suppliers.

"We recognize that becoming accredited imposes a burden on DMEPOS suppliers, especially small suppliers," CMS notes. "We have attempted to minimize that burden."

As such, the rule includes separate accreditation procedures for small suppliers, which account for 90% of overall DMEPOS firms, according to the Small Business Administration.

As part of the application process, accrediting organizations will be required to submit a "plan that details their methodology to reduce accreditation fees and burden for small or specialty suppliers," the rule states. Accrediting bodies also are expected to reduce certification charges for suppliers with multiple facilities, according to the rule.

In addition, CMS expects to approve several accreditation organizations in order to meet the bidding dates and help lower the cost for suppliers.

"We believe that selection of more than one accreditation organization...will introduce competition resulting in reduction in accreditation costs," CMS explains in the rule.

The final rule also clarifies that the role of the accreditation organization is to ensure compliance with quality standards and that accreditation should not be contingent upon using consultation services or purchasing manuals.

Moreover, all surveys for DMEPOS suppliers will be unscheduled, the rule notes. "Therefore, there may not be a six-month survey preparation time and additional costs associated with preparation time."

Finally, the agency stresses that streamlined quality standards will ensure an efficient survey. In any case, "DMEPOS suppliers should already be complying with the standards," CMS says, which will prevent ramp-up costs.

Wanted: Updated Quality Standards

Meanwhile the agency has yet to release updated quality standards, the proposed versions of which have generated more than 5,600 comments since they were introduced last October (² Also see "Panel Advises CMS To Relax Quality Standards For DMEPOS Suppliers" - Medtech Insight, 3 October, 2005., p. 16).

"The delay in the release of quality standards and the perceived 'foot dragging' on accreditation is beginning to disturb many in the power mobility community," said the Power Mobility Coalition in Aug. 3 comments.

CMS says the quality standards will be released as soon as possible.

- Adosh Unni

CMS Details Competitive Bidding Supplier Accreditation Program

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