CMS proposed rule would strengthen oversight of AOs

By John Commins, HealthLeaders Media

The Centers for Medicare & Medicaid Services unveiled a proposed rulerequiring greater transparency when ownership changes occur at accrediting organizations.

The proposed rule establishes a process AOs with Medicare-approved accreditation programs must follow if there is a sale, transfer, and/or purchase of assets related to the ownership of an AO. CMS said the new rule is needed to ensure the effectiveness of accreditation programs.

“Accrediting Organizations are an important partner in our oversight of healthcare facilities across the country,” CMS Administrator Seema Verma said in a media release. “Today we are reinforcing our commitment to patient safety by proposing policy that would require accrediting organizations to notify CMS when the organization makes a change in ownership.”

“This rule builds on earlier steps we’ve take to strengthen federal oversight of accrediting organizations and ensure patients are receiving high quality, safe care at our nation’s healthcare facilities,” Verma said.

CMS grants AOs “deeming authority” to affirm that a healthcare facility’s safety standards meet or exceed those of Medicare. Only facilities and suppliers that have been deemed by state or AO surveyors to meet CMS’ standards may receive payments from Medicare.

Current CMS regulations governing AOs do not require them to provide CMS advanced notice of pending changes of ownership. CMS is first notified of an AO ownership change when an AO, under new leadership, applies for renewal of its agreement to CMS or it voluntarily notifies the agency.

This proposal would require AOs to notify CMS when they are contemplating or negotiating a change of ownership, CMS said.

CMS would also require prospective new owners to submit documentation and information confirming their ability to effectively perform the required accreditation tasks after the change of ownership takes place.

CMS said the proposal does not impede the sale of an AO, but instead gives CMS the ability to approve or deny the accreditation programs that are to be transferred as part of the sale or transfer.

Tuesday’s proposal is the latest in a series of actions CMS has taken to improve oversight of AOs. In 2018, CMS said it would AO performance data online and also began a more streamlined, efficient way to assess AOs’ ability to ensure that facilities and suppliers comply with CMS requirements.

In December, CMS raised questions about potential conflicts of interest between Medicare accrediting organizations and the healthcare facilities they monitor.

“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,” Verma said at the time.

The query was expected to include an examination of The Joint Commission, the nation’s largest hospital accrediting organization. In a media statement in December, The Joint Commission said it is reviewing CMS’s requests for comment, but said it is confident in the integrity of the “firewall” between its consulting and accrediting divisions.

“The Joint Commission recognizes the importance of assuring the integrity of the accreditation process, which we accomplish by prohibiting any sharing of information about consulting services for individual organizations with anyone involved in accreditation,” the statement read.

The agency also issued a Request for Information seeking comment on the financial relationships between CMS-approved AOs and the healthcare facilities they review and monitor.

As part of this process, CMS will determine whether revisions should be made to the AO application and renewal process to identify actual, potential, or perceived conflicts of interest.

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Accreditation, CMS