According to The Medicare Improvements for Patients and Providers Act (MIPPA), providers who subcontract all or part of their delivery or instruction services must ensure that their subcontractors are accredited as well, or the providers risk their accreditation and will not be able to bill Medicare for the services those subcontractors help fulfill. This important distinction was only just uncovered at the June 4 Program Advisory and Oversight Committee (PAOC) meeting, according to Sandra Canally, president of the Compliance Team, who attended the meeting.

News of the clarification is particularly startling given that providers must be accredited by Sept. 30 in order to continue billing Medicare. For a subcontractor to start work towards accreditation certification now — typically a four- to six-month process — in hopes of making that deadline puts those providers’ funding for those services in jeopardy.

Likewise, for providers who are now in the middle of accreditation process, the accrediting organizations will not be able to give them accreditation certification, until their subcontractors gain accreditation for those services that they provide, as well, Canally said.

“The majority of DMEs don’t even know this, because this was just clarified  at the PAOC meeting,” Canally explained. “In the MIPPA language, it really looked like it was tied to competitive bidding. It [accrediting subcontractors] was brought up in the PAOC meeting. I asked the question to some of the people at the meeting, and [CMS] clarified and announced to everybody at the meeting that this is for all subcontractors, not just subcontractors for competitive bidding.”

It is not uncommon for providers to subcontract out specific pieces of their businesses, such as service and maintenance or delivery and instruction to third party companies. However, the number of providers that subcontract is unknown, Canally said, adding that from her experience, two key geographies with high incidence of HME providers farming out portions of their businesses are New York City and Los Angeles. 

Adding further complication to the issue is the fact that MIPPA went into effect July 2008, so accrediting organizations will need to go back to the businesses that were accredited last July to ensure that if they have subcontractors that those subcontractors are accredited, according to Canally. Other businesses potentially affected could be providers with reps in the field working as subcontractors, as those field reps would then need to become accredited.

Needless to say, the revelation that the accreditation language in MIPPA covers all providers, not just those affected by competitive bidding is nothing short of a bombshell given the looming Sept. 30 deadline.

“It’s huge … Time is of the essence,” Canally said. “It’s not only surprising, it really is significant and I don’t think enough attention is being placed on it. Granted, the majority of providers don’t have subcontractors, but certainly there is a large enough percent of the smaller businesses that subcontract that will be directly affected.”