The Centers for Medicare & Medicaid Services (CMS) proposed rule for calendar year 2026, published in the Federal Register on July 2, provided extensive details on the accreditation changes the agency wants to see for DMEPOS suppliers who bill Medicare.
The proposed rule also expressed concern over actions by both accrediting organizations and suppliers, while dredging up familiar refrains on fraud and abuse.
“DMEPOS [durable medical equipment, prosthetic, orthotic and supplies] suppliers have long presented to the Medicare program an elevated risk of fraud, waste and abuse,” CMS said in the proposed rule. “In recognizing this threat, CMS over the years has established particularly stringent requirements that DMEPOS suppliers must meet to enroll and maintain enrollment in Medicare. For example, DMEPOS suppliers under 42 CFR 424.518(c) are one of only six provider and supplier types that are subject to the highest and strictest level of screening during the enrollment process.
“Despite these and other DMEPOS program integrity efforts we have undertaken, serious concerns remain. Indeed, numerous Office of Inspector General (OIG) reports since 1998 have noted such payment safeguard issues associated with DMEPOS suppliers.”
As examples, the proposed rule referenced a May 2024 OIG report about fraud, waste and abuse related to off-the-shelf orthotic braces, and a February 2025 OIG report describing how Medicare improperly paid suppliers for intermittent urinary catheters provided to Medicare beneficiaries from July 2021 through June 2022.
“This resulted in approximately $35.1 million in improper payments,” CMS said of the catheter example. The agency also cited “a considerable number of criminal convictions and other findings over the years involving DMEPOS suppliers,” followed by a list of 16 legal cases involving a range of DMEPOS, from power wheelchairs to braces and incontinence supplies.
The list, CMS contended, “indicates several things. First, DMEPOS fraud, waste, and abuse is still a very significant problem, putting hundreds of millions (even billions) of taxpayer dollars at risk and potentially resulting in patient harm, such as in cases where beneficiaries use unnecessary or substandard items. … Second, DMEPOS fraud schemes do not necessarily follow a consistent pattern, but can vary widely in their particular facts. Third, DMEPOS fraud, waste, and abuse is not restricted to certain types of items or certain areas of the country but occurs with numerous different product types and in many geographic areas. Considering the wide and ever-changing range of payment safeguard risks associated with DMEPOS supplies, we must continually take measures to address them.”
The role of DMEPOS accreditation
The proposed rule stated that DMEPOS suppliers “must be accredited by a CMS-approved accrediting organization (AO) to enroll in and bill Medicare. The main purpose of accreditation is to confirm that the supplier meets the DMEPOS quality standards. The accreditation process has been in effect since 2006.”
There are currently eight DMEPOS accreditation organizations, CMS said, and those AOs have requirements that include “completing the application process, which includes the submission of detailed information about the AO’s operations and procedures; undergoing various CMS reviews; and furnishing ongoing data to CMS about its activities, such as its accreditation decisions, complaints received about suppliers, etc.”
“In general, DMEPOS suppliers may choose the AO it wishes to accredit them,” the proposed rule said. “In performing its DMEPOS accreditation activities — and subject to CMS approval — an AO generally has some discretion in the operational aspects of its review of a supplier’s request for accreditation.”
A “critical and common component” of the reviewing process, CMS said, “is the AO’s performance of an on-site survey of the supplier. Along with the AO’s review of the information the supplier furnishes as part of its accreditation application, the survey enables the AO to examine first hand the supplier’s operations and credentials to help ascertain compliance with the quality standards.”
CMS lays out its concerns
CMS said it has proposed regulatory changes to the current DMEPOS accreditation process — which currently requires renewal every three years — because of several concerns, including “an increased number of reports of accredited suppliers not meeting the quality standards, which has raised questions as to the efficacy of some AO accreditation surveys and reviews.”
The proposed rule added that the “aforementioned AO discretion in various aspects of its DMEPOS accreditation processes” caused CMS to be concerned “that differences between the AOs in this regard could lead to inconsistencies in how quality standard compliance determinations are made.”
CMS also said that while surveys are often part of the accreditation process, not every DMEPOS supplier receives one. “This is especially true for large chain suppliers with 25 or more separately enrolled locations (such as chain pharmacies),” CMS said. “We believe this is a potential vulnerability in our enforcement of the DMEPOS accreditation requirement.”
In addition to recommending annual surveying and reaccreditation, CMS proposed “eliminating inconsistencies among AOs in how they oversee DMEPOS suppliers; and strengthening our ability to take action against poorly performing DMEPOS AOs. We believe these changes would help better ensure that DMEPOS AOs closely oversee DMEPOS suppliers for compliance with the DMEPOS quality standards.”
CMS listed various “scenarios” that it said a “strengthened” accreditation program could limit or prevent, particularly if supplier businesses are required to renew accreditation more frequently. Examples included an ownership change soon after accreditation; a supplier experiencing financial difficulties and starting to cut corners soon after accreditation; and a supplier who decides to begin defrauding Medicare soon after being accredited.
In those examples, CMS said, closer involvement by the AO could curtail supplier activities that are not in line with the agency’s policies.
Going forward, CMS said, it wants companies applying to become AOs to submit “a detailed description of the organization’s operational, survey and other accreditation processes to confirm that the suppliers it accredits meet or exceed the DMEPOS quality standards and Medicare program requirements. We believe this expanded data would give us a broader understanding of the AO’s procedures in full, instead of those simply relating to operations.”
AOs would also be required to explain its policies for avoiding conflicts of interest “involving individuals who conduct surveys or participate in accreditation decisions.” And an AO would need to “describe its processes for identifying and correcting deficiencies within its accreditation program.”
On that latter point, CMS added, “It is important for AOs to very frequently review their accreditation programs for vulnerabilities and weaknesses. Without this, AOs may perform their functions in a substandard manner. This risks the possibility that suppliers receive inadequate scrutiny, which, in turn, could lead to them furnishing items and services while non-compliant with the quality standards.”
AOs would also need to explain how it uses its data to ensure that its accreditation program conforms to Medicare requirements. “Since we need to ensure that the AO will adhere to all of the provisions in § 424.58, we believe an understanding of how the AO will use data to maintain this compliance is necessary,” CMS said.
Under the new rule, DMEPOS AOs would also need to document their “knowledge, expertise and experience” with durable medical equipment, similar to the current requirement that home infusion AOs demonstrate that knowledge.
“Despite the volume of information required per existing § 424.58(b), there is no specific requirement that the AO detail its credentials and experience in the DMEPOS arena,” the proposed rule said. “Put otherwise, the current data furnished under § 424.58(b) does not, by itself, give us adequate assurance that the AO understands the intricacies of, for example, the quality standards, DMEPOS enrollment and payment, etc.”
And AOs would be required to submit information on their policies and procedures for determining if and when a survey is performed, and ensuring that all on-site surveys are unannounced.
When AOs apply a corrective action plan (CAP) to a supplier’s accreditation due to failure of the supplier to meet quality standards, CMS now wants to know, for example, “the circumstances under which an AO will impose a CAP and, if a CAP is applied, why the AO chose this approach instead of, as applicable, denial or termination of accreditation.”
CMS also wants to know the AO’s procedures for starting, monitoring and ending a CAP, how the AO oversees the supplier’s efforts to comply with the CAP, and how the AO establishes the terms of the CAP. CMS additionally wants AOs to be required to explain what they consider to be supplier deficiencies: “We are concerned that the meaning of ‘deficiency’ and any AO-identified levels thereof may differ among AOs, resulting in inconsistent determinations. Therefore, we believe we must understand the AO’s policies regarding deficiency classifications.”
AOs would also be required to share its processes for detecting and addressing instances of fraud, waste and abuse by suppliers, and to report misconduct to CMS and law enforcement if applicable.
Examining the accreditors
CMS said it is concerned that it has not reissued approval of any AO since DMEPOS accreditation for suppliers billing Medicare began in 2006 — and the agency believes it’s time to change that.
“Considering this nearly two-decade period, we believe it is imperative to commence a reapproval process for all current AOs as soon as possible after the effective date of any finalization of our proposals. Therefore, we propose in § 424.58(d)(1)(ii) that CMS may require AOs to submit reapproval applications under paragraph (d) any time after January 1, 2026, which would be the effective date of our revisions to §§ 424.57 and 424.58. The application would have to be submitted within 60 calendar days of CMS’ submission request; if it is not, CMS terminates the AO’s DMEPOS accreditation approval.”
The proposed rule would require AOs to perform surveys “of all supplier locations for which the supplier seeks accreditation or reaccreditation with the AO,” thus replacing the current policy that allows AOs to “undertake sampling for large supplier chain surveys” unless CMS has otherwise directed or permitted. AOs would not be allowed to accredit a supplier location before the survey is conducted and the AO has determined the location to be in compliance with quality standards.
CMS would also be empowered to order AOs to perform surveys of accredited suppliers at any time. “We do not believe surveys should be restricted to initial accreditation and re-accreditation situations, especially considering the aforementioned three-year time gap between them,” the proposed rule said. “Suppliers must at all times be compliant with the quality standards and not merely upon initial accreditation and reaccreditation. To help verify that such adherence is consistently maintained, we believe we need discretion to direct an AO to conduct a survey at any given time.”
CMS said it also “may survey suppliers to validate the AO’s survey process. Such surveys can be comprehensive or focus on certain standards or requirements.”
CMS calls for accreditation feedback
Acknowledging the large number of accreditation changes it’s proposing, CMS said, “We would appreciate feedback thereon from AOs, DMEPOS suppliers, and other stakeholders.”
CMS also referenced the “net cost burden associated with our DMEPOS accreditation provisions. We project that it would exceed $128 million annually. We understand the financial impact this could have on the DMEPOS community. However, this would be more than offset by the over $660 million in annual savings to the Medicare trust funds and the taxpayers due primarily to the removal of fraudulent and non-compliant DMEPOS suppliers from the Medicare program.
“Of no less importance, we believe that more frequent surveys, ad-hoc surveys, and stricter requirements for AOs will encourage DMEPOS suppliers and AOs to be much more vigilant in maintaining and verifying compliance with the quality standards.”
