Turning Compliance on a Dime

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With Round Two of competitive bidding winners set to be announced in winter 2013, HME providers are no doubt considering other ways to increase business if they don’t win certain contracts. For some, a valid Plan B might consist of subcontracting, where one billing provider contracts with another provider to fulfill specific services, such as cleaning and repairing equipment, billing for services, and delivering and instructing to the patient.

During Round One of competitive bidding, subcontracting was somewhat dismissed as impracticable because there wasn’t enough reimbursement to go around. Now that the bids are national, subcontracting might work for Round Two. The jury is still out, but for some, it could be an important move, if they can find an acceptable economy of scale.

If providers win their bids in several product categories, they may choose to contract out the least wanted and lucrative line to another provider in order to better concentrate on the products they choose. They may also contract services in general, such as delivery and instruction of all patients served. Another option is to use a subcontractor for a specific geography that is harder for the winning bidder to access.

To put it bluntly, subcontracting helps the bid winner and additional providers that did not win the bid to stay in the game. If this is the case, providers that are not prepared for subcontracting must start thinking about accreditation.

There are two different types of subcontractor: One that has a billing number and, therefore, is fully accredited in order to maintain that number. The second is a provider that just does piecemeal work, such as delivery and instruction and does not have a billing number. The latter example is accredited as well but only for delivery and instruction services. As far as accreditation goes, they only need to meet the quality standards that relate to delivery and instruction.

So do both parties need to be accredited for a particular product category?

In all cases of subcontracting and whether both parties need to be accredited for the particular product category, responsibility goes to the billing provider. Therefore, the bid winner would need to be accredited in those product categories. The subcontractor would no longer have the ability to bill for those items but it would be in the best interest of all if prior to not winning the bids they were accredited for those product lines. If the subcontractor was accredited as just a delivery and instruction provider, then there are no distinctions with product line for reporting purposes.

All subcontractors providing delivery and instruction must be accredited. If they are performing other services, such as repair, it is not required.

As for whether there will be a scramble to be accredited once winners are announced, experts say that there was a bit of a rush prior to bid submission. The truth is that all providers and their subcontractors should be accredited already.

“There is nothing quick about accreditation in my experience,” says Esta Willman, President, Medi-Source Equipment & Supply. She is also a Board Member, California Association of Medical Product Suppliers (CAMPS) and an Executive Committee Member, Committee to Save Independent Home Medical Equipment Suppliers (CSIHME). “It takes time to know the accreditor’s applicable standards and evidence of compliance with the standards, then they need to put everything in place — policy and procedures, operational aspects of compliance, etc. and have the required level (per the accreditor) of experience and patient interactions and appropriately licensed/educated/ experienced personnel hired, etc.

“My advice would be this: If suppliers think they may ultimately subcontract for a product category for which they are not yet accredited, and the subcontract service level is one that requires accreditation, don’t wait until the contract winner comes knocking on the door looking to subcontract. They should get the accreditation in place well before the timeline for bid winner announcement so they are prepared. Historically, CMS/CBIC has announced bid winners very near the implementation date, which leaves little time to work out the details of the subcontract agreement much less get accredited before those details can even enter into negotiation.”

If you are a provider looking for rapid accreditation in preparation for subcontracting work, the most important way to get through accreditation quickly is to be prepared. Other suggestions for helping the process move along quickly includes:

  • Choose an internal accreditation champion or project team dedicated to preparing the company for accreditation. This person (people) must help get the staff on board.
  • Consider hiring a third-party expert or purchasing a policies and procedures manual.
  • Discuss with the accreditation organization what help they may offer in getting you accredited quickly.

Providers must review the 10 deemed organizations on the CMS list of accrediting organizations and decide which one best meets their needs. Some of the accrediting organizations are better suited to help particular providers based on their specialties. It’s then up to the process of the accrediting organizations as to the steps needed. Once the preparation is complete the surveyor would then perform an onsite visit to verify and validate that they meet the CMS quality standards. They then are given a certificate of accreditation and it is reported to CMS.

Accreditation time varies based on the provider’s scope and scale of business, as well as the complexity of the policies and procedures it must integrate. Be realistic, as the process could last four to six months. Also, investigate whether your accrediting body offers any “accelerated tracks” to help you more quickly achieve compliance.

Finally, if a provider is servicing patients in an area not previously served, then state licensure is of utmost importance. A bidder would have needed appropriate licensure and credentialed staff as appropriate to state requirements to submit the bid.

Points to take away:

  • Subcontracting will likely be a viable revenue source with Round Two.
  • The two types of subcontractor are: one with a billing number and, therefore, is fully accredited in order to maintain that number, and, a provider that does piecemeal work and does not have a billing number.
  • The most important way to get through accreditation quickly is to be prepared.
  • Choose an internal accreditation champion or project team to help move the process through your company.
  • If a provider is servicing patients in an area not previously served, then state licensure is of utmost importance.

Learn More:

Accreditation Commission for Health Care Inc.

American Board for Certification in Orthotics and Prosthetics Inc.

Board of Certification/Accreditation International

Commission on Accreditation of Rehabilitation Facilities

Community Health Accreditation Program

The Compliance Team Inc.

Healthcare Quality Association on Accreditation

Joint Commission on Accreditation of Healthcare Organizations

National Association of Boards of Pharmacy

National Board of Accreditation for Orthotic Suppliers

This article originally appeared in the June 2012 issue of HME Business.


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