Rule2026-12069
Medicare Program; Strengthening Oversight of Accrediting Organizations (AOs) and Preventing AO Conflicts of Interest, and Related Provisions
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Published
June 16, 2026
Effective
June 16, 2027
Issuing agencies
Health and Human Services DepartmentCenters for Medicare & Medicaid Services
Abstract
This final rule with comment period sets forth provisions to strengthen the oversight of Medicare national accrediting organizations by addressing conflicts of interest, establishing consistent standards, processes, and definitions, and updating the validation and performance standards systems. Additionally, this final rule with comment period revises the psychiatric hospital survey process, adds a limitation on terminated deemed providers and suppliers when reentering the program, and provides technical corrections for End-Stage Renal Disease facilities and Transplant Programs.
Full Text
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<title>Federal Register, Volume 91 Issue 115 (Tuesday, June 16, 2026)</title>
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[Federal Register Volume 91, Number 115 (Tuesday, June 16, 2026)]
[Rules and Regulations]
[Pages 36370-36468]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-12069]
[[Page 36369]]
Vol. 91
Tuesday,
No. 115
June 16, 2026
Part III
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Parts 488 and 489
Medicare Program; Strengthening Oversight of Accrediting Organizations
(AOs) and Preventing AO Conflicts of Interest, and Related Provisions;
Final Rule
Federal Register / Vol. 91 , No. 115 / Tuesday, June 16, 2026 / Rules
and Regulations
[[Page 36370]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 488 and 489
[CMS-3367-FC]
RIN 0938-AU88
Medicare Program; Strengthening Oversight of Accrediting
Organizations (AOs) and Preventing AO Conflicts of Interest, and
Related Provisions
AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of
Health and Human Services (HHS).
ACTION: Final rule with comment period.
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SUMMARY: This final rule with comment period sets forth provisions to
strengthen the oversight of Medicare national accrediting organizations
by addressing conflicts of interest, establishing consistent standards,
processes, and definitions, and updating the validation and performance
standards systems. Additionally, this final rule with comment period
revises the psychiatric hospital survey process, adds a limitation on
terminated deemed providers and suppliers when reentering the program,
and provides technical corrections for End-Stage Renal Disease
facilities and Transplant Programs.
DATES:
Effective date: These regulations are effective on June 16, 2027.
Comment date: To be assured consideration, comments on sections
VI., ``Collection of Information'' and VII., ``Regulatory Impact
Analysis'' must be received at one of the addresses provided below, by
August 17, 2026.
ADDRESSES: In commenting, please refer to file code CMS-3367-FC.
Comments, including mass comment submissions, must be submitted in
one of the following three ways (please choose only one of the ways
listed):
1. Electronically. You may submit electronic comments on this
regulation to <a href="https://www.regulations.gov/docket/CMS-2024-0016">https://www.regulations.gov/docket/CMS-2024-0016</a>. Follow
the ``Submit a comment'' instructions.
2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-3367-FC, P.O. Box 8010,
Baltimore, MD 21244-8010.
Please allow sufficient time for mailed comments to be received before
the close of the comment period.
3. By express or overnight mail. You may send written comments to
the following address ONLY: Centers for Medicare & Medicaid Services,
Department of Health and Human Services, Attention: CMS-3367-FC, Mail
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: CAPT Scott J. Cooper, USPHS, (410)
786-9465 or <a href="/cdn-cgi/l/email-protection#a4e5ebfbe5d4d4c8cdc7c5d0cdcbcad7e4c7c9d78accccd78ac3cbd2"><span class="__cf_email__" data-cfemail="db9a94849aababb7b2b8baafb2b4b5a89bb8b6a8f5b3b3a8f5bcb4ad">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
Inspection of Public Comments: All comments received before the
close of the comment period are available for viewing by the public,
including any personally identifiable or confidential business
information that is included in a comment. We post all comments
received before the close of the comment period on the following
website as soon as possible after they have been received: <a href="https://www.regulations.gov">https://www.regulations.gov</a>. Follow the search instructions on that website to
view public comments. CMS will not post on <a href="http://Regulations.gov">Regulations.gov</a> public
comments that make threats to individuals or institutions or suggest
that the commenter will take actions to harm an individual. CMS
continues to encourage individuals not to submit duplicative comments.
We will post acceptable comments from multiple unique commenters even
if the content is identical or nearly identical to other comments.
Table of Contents
I. Executive Summary
A. Purpose
B. Summary of the Major Provisions
II. Background
A. Legislative History
B. Regulatory Overview of CMS' Rules Regarding AO Programs
C. Congressional Report on the Oversight of National AOs and
CMS-Approved Accreditation Programs
D. CMS Validation Survey Pilot
E. Overview of Transparency and Oversight of Accrediting
Organizations
F. Prior Rulemaking--Accrediting Organizations Conflicts-of-
Interest Request for Information (RFI)
G. Conflicts of Interest--The AO Owner's, Surveyor's and Other
Employee's Interest in or Relationship With a Healthcare Facility
That the AO Accredits
H. Public Comment on Whether it Is a Conflict of Interest for AO
Board Members or Advisors To Have an Interest in, or Relationship
With, a Healthcare Facility That the AO Accredits
III. Summary of the Proposed Provisions, Public Comments, and
Responses to Comments on the Proposed Rule
A. General Comments in Support of the Proposed Rule
B. Comments Expressing General Opposition to the Proposed Rule
C. Add Definition of ``Unannounced Survey'' to Sec. 488.1
D. Conflicts of Interest
E. Comments on the Proposed Requirement That AOs Obtain and
Submit Surveyor Declarations of Any Interest in and Relationships
With Healthcare Providers the AO Accredits to CMS on an Annual Basis
(Proposed Sec. 488.5(a)(22))
F. Proposed Restrictions on Fee-Based Consulting Services
Provided by AOs to the Medicare-Certified Providers and Suppliers
They Accredit (Proposed Sec. 488.8(i))
G. Require AOs To Provide CMS With Information About the Fee-
Based Consulting They Provide (Proposed Sec. 488.8(i)(5))
H. Actions Against AOs Found To Be Providing AO Fee-Based
Consulting Services to the Healthcare Providers or Suppliers They
Accredit in Violation of the Restrictions in Sec. 488.5(i)(1)
Through Sec. 488.5(i)(3) (Proposed Sec. 488.8(i)(6))
I. Require Accrediting Organizations To Have Written Fee-Based
Consulting Firewall Policies and Procedures (Sec. 488.8(j))
J. Prohibit AO Owners, Surveyors, and Other Employees From
Involvement With the Survey and Accreditation Process for Healthcare
Facilities With Which They Have an Interest or Relationship (Sec.
488.8(k))
K. Require the AOs That Accredit Medicare-Certified Providers
and Suppliers To Use Medicare Conditions; and Strengthened Survey
Process Comparability (Proposed Sec. 488.4(a)(1) and (2))
L. Revise the Crosswalk Requirements at Sec. 488.5(a)(3)
M. Strengthen the Comparability of the Survey Process Between
the AOs and the States
N. Revise the AO Application Documentation Requirements Related
to the Survey Processes (Sec. 488.5(a)(4); Sec. 488.5(a)(4)(iii);
Sec. 488.5(a)(4)(v); Sec. 488.5(a)(4)(vii); Sec. 488.5(a)(4)(xi);
Sec. 488.5(a)(5); Sec. 488.5(a)(6); Sec. 488.5(a)(12); Sec.
488.5(a)(13))
O. Revisions to Sec. 488.5(a)(4)(v) (Survey Review Process)
P. Revision to Sec. 488.5(a)(4)(vii) (Correction of Identified
Non-Compliance)
Q. Revisions to Sec. 488.5(a)(4)(xi) (AO Training and Education
Programs)
R. Revisions to Sec. 488.5(a)(5) (Composition of Survey Team)
S. Revisions to Sec. 488.5(a)(6) (Adequate Number of Surveyors
for Size of Facility)
T. Revisions to Sec. 488.5(a)(12) (Complaint Survey
Documentation Requirements)
U. Revisions to Accreditation Decision-Making Policies and
Reporting Sec. 488.5(a)(13)
V. Require AOs To Provide CMS With Survey Findings (Sec.
488.5(a)(4)(viii)(A))
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W. Require That AO Surveyors Must Take the CMS Online Surveyor
Basic Training (Sec. 488.5(a)(8))
X. Establish Criteria for ``National in Scope'' (Sec. 488.1)
Y. Revise the Definition of ``Rate of Disparity'' and To Use the
Process and Outcome Disparity Rates and Performance Measures (Sec.
488.1)
Z. Require AOs To Submit a Publicly Reportable Plan of
Correction for Unacceptable Performance Measure Scores (Sec. Sec.
488.8(a)(2) and (4))
AA. Revisions to the AO Survey Validation Program (Sec. 488.9)
BB. Revise the Psychiatric Hospital Survey Process
CC. Limitation on Terminated Deemed Providers/Suppliers Seeking
Re-Entry Into Medicare/Medicaid (Sec. 489.57, Sec. 488.4(b) and
Sec. 488.5(a)(21))
DD. Finalizing Technical Correction for End-Stage Renal Disease
(ESRD) Facilities and Kidney Transplant Programs (Sec. 488.4(a)(4))
IV. Information Regarding Timeframes and Expectation for the
Submission of AO Applications
V. Severability of Provisions
VI. Collection of Information Requirements
A. Information Collection Requirements (ICRs) Related to
Conflict-of-Interest Requirements
B. ICR Associated With the Requirement That AOs Provide Detailed
Crosswalks Identifying Incorporation of the CMS Standards
C. ICRs Associated With the Requirement That AOs Use Survey
Processes That Are Comparable to Those Used by CMS and the SAs
D. ICRs Associated With the Establishment of a Definition for
``National in Scope''
E. ICR Associated With the Revision of the AO Performance
Measures and To Require a Publicly Reportable Plan of Correction
F. Summary of Estimated Burden
VII. Regulatory Impact Analysis
A. Statement of Need
B. Overall Impact
C. Detailed Economic Analysis
D. Alternatives Considered
E. Regulatory Flexibility Act (RFA)
F. Unfunded Mandates Reform Act (UMRA)
G. Federalism
H. E.O. 14192 ``Unleashing Prosperity Through Deregulation''
VIII. Waiver of Notice of Proposed Rulemaking
IX. Response to Comments
I. Executive Summary
A. Purpose
The Centers for Medicare & Medicaid Services (CMS) seeks to protect
the health and safety of all patients who receive services from
Medicare- and Medicaid-participating providers and suppliers, including
those facilities that are accredited by CMS-approved accrediting
organizations (AOs). We continue to review and revise our patient
health and safety requirements and our survey process requirements to
ensure that these regulations effectively drive the quality and safety
of the care our beneficiaries and all patients receive from these
accredited providers and suppliers.
In 2015, we published a final rule in the Federal Register
entitled, ``Medicare and Medicaid Programs: Revisions to Deeming
Authority Survey, Certification, and Enforcement Procedures'' (80 FR
29796), hereinafter referred to as the ``2015 AO final rule'' to
clarify and strengthen the oversight of AOs, specifically to provide
additional criteria for AOs that apply for, and are granted,
recognition and approval of an accreditation program (see section ``II.
Background'' of this final rule with comment period for additional
background information). Since 2015, CMS has continued to evaluate the
effectiveness of these regulatory changes and the performance of AOs.
In our proposed rule, published February 15, 2024 (89 FR 11996), we
proposed multiple provisions to further strengthen our oversight and
enforcement capabilities of the AOs. The need for these provisions is
based on multiple factors, which include: (1) direct observation and
review of the AOs' accreditation programs for those AOs with CMS-
approved deeming programs; (2) media reports and complaints against
facilities that are deemed; (3) the CMS validation program and analysis
of disparity rates between State survey agencies (SAs) and the AOs; and
(4) our performance evaluations of AOs. Section IV. of the proposed
rule discussed each of the proposed provisions. More specifically, the
preamble provided background and analysis of why CMS proposed
additional provisions and revisions to existing requirements. CMS is
responsible for the oversight of the national AOs' Medicare
accreditation programs, and for ensuring that providers or suppliers
under CMS-approved deeming programs by the AOs meet the baseline
quality and patient safety standards required by the Medicare
conditions (please refer to section ``II. Background'' of this final
rule with comment period for additional information). Based on several
years of experience and data analysis, we proposed the revisions and
the new requirements in the February 15, 2024, proposed rule to
strengthen our oversight of AOs.
B. Summary of the Major Provisions
<bullet> We proposed at Sec. 488.1 to add the definitions of
``geographic regions'', ``national in scope'', ``outcome disparity
rate'', ``process disparity rate'', and ``unannounced survey''. In
addition, we proposed to revise the definition of ``national
accrediting organization,'' and remove the definition of ``rate of
disparity''.
<bullet> We proposed to establish a new requirement at Sec.
488.4(a)(1) that would require the AOs that accredit Medicare-certified
providers and suppliers to include the language of the applicable
Medicare Conditions of Participation (CoPs), Conditions for Coverage or
Conditions for Certification (CfCs), or requirements (collectively
referred to as ``Medicare conditions'') set forth in the applicable CMS
regulations for each provider and supplier type as their minimum
accreditation requirements. However, the AOs would be free to establish
additional accreditation requirements that exceed Medicare conditions,
as permitted by section 1865(a)(1) of the Social Security Act (the
Act).
<bullet> We proposed to add language at Sec. 488.4(a)(2) regarding
use of a comparable survey process approved by CMS, as outlined and
contemplated in Sec. 488.5.
<bullet> We proposed to add a new regulation at Sec. 488.4(b) that
would state that if Medicare terminated the participation agreement of
a Medicare-certified provider or supplier, then CMS would no longer
recognize the facility's AO accreditation for deemed compliance. At
proposed Sec. 488.4(b)(2), we would require a terminated provider or
supplier to meet all requirements set forth at Sec. 489.57 before
their new agreement for participation in the Medicare/Medicaid program
can be approved.
<bullet> We proposed to require AOs to develop a crosswalk between
their accreditation standards and the Medicare conditions, at proposed
Sec. 488.5(a)(3).
<bullet> We proposed to strengthen the requirements at Sec.
488.5(a)(4), Sec. 488.5(a)(4)(iii), Sec. 488.5(a)(4)(v), Sec.
488.5(a)(4)(vii), Sec. 488.5(a)(4)(xi), Sec. 488.5(a)(5) and Sec.
488.5(a)(6) related to the comparability of survey processes as
mentioned above. We also proposed changes under Sec.
488.5(a)(5)(viii)(A) related to survey reports. These strengthened
requirements would be applicable to initial and renewal applications,
effective 1 year after the effective date of the rule.
<bullet> We proposed at Sec. 488.5(a)(8)(i) through Sec.
488.5(a)(8)(iv) to require that AO surveyors complete the applicable
CMS online surveyor trainings.
<bullet> We proposed to add a requirement at Sec. 488.5(a)(10)
that the AOs must provide, as part of their initial and
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renewal applications, specific policies and procedures that would
address how the AOs would prevent and address conflicts of interest. We
proposed that AOs provide information on a number of specific policies
and procedures regarding conflicts of interest.
<bullet> We proposed to revise requirements under Sec.
488.5(a)(12) related to the AO procedures for investigating and
responding to complaints against accredited facilities.
<bullet> We proposed revisions to Sec. 488.5(a)(13) related to the
AO's accreditation status decision-making process, to strengthen the
comparability of the survey processes.
<bullet> We proposed to add a new requirement at Sec. 488.5(a)(21)
that would require an AO to submit a statement with its initial or
renewal application certifying that, in response to a written notice
from CMS notifying the AO that one of its accredited providers or
suppliers has been involuntarily terminated from the Medicare/Medicaid
program, the AO agrees to terminate or revoke its accreditation of the
terminated provider or supplier within 5 business days from receipt of
said written notice.
<bullet> We proposed at Sec. 488.5(a)(22) to require an AO submit
a declaration from each surveyor disclosing any interests or
relationships the surveyor may have in or with another survey agency or
in or with a healthcare facility the AO accredits (as defined in Sec.
488.5(a)(10)).
<bullet> We proposed at Sec. 488.8(a)(2) to expand the types of
accreditation survey validation activities included in CMS' performance
review.
<bullet> We proposed at Sec. 488.8(a)(4) to require an AOs submit
a plan of correction that would be subject to a public reporting
requirement, when the AO's performance on survey activities identify
disparity concerns, either through the outcome disparity rates or
process disparity rates.
<bullet> We proposed at new Sec. 488.8(i) to place restrictions on
the fee-based consulting services provided by AOs to the healthcare
providers and suppliers they accredit. At Sec. 488.8(i)(1), we
proposed that an accrediting organization or its associated fee-based
consulting division or company may not provide fee-based consulting
services to any healthcare provider or supplier prior to an initial
accreditation survey. At Sec. 488.5(i)(2), we proposed to prohibit AOs
from providing fee-based consulting services to healthcare providers
and suppliers they accredit within 12 months prior to the next
scheduled re-accreditation survey of that provider or supplier. At
Sec. 488.5(i)(3), we proposed that AOs may not provide fee-based
consulting services to a healthcare provider or supplier in response to
a complaint received by the AO regarding that provider or supplier.
<bullet> At Sec. 488.8(i)(4), we proposed circumstances in which
the restrictions to the provision of AO fee-based consulting services
would not apply.
<bullet> We proposed at Sec. 488.8(i)(5) to require AOs to provide
specific information to CMS on a bi-annual basis about the fee-based
consulting services they provide.
<bullet> We proposed at Sec. 488.8(i)(6) to take actions against
AOs for the provision of prohibited fee-based consulting services.
<bullet> We proposed at Sec. 488.8(k) that when an AO owner,
surveyor, or other employee, currently or within the previous 2 years,
has an interest in or relationship with a healthcare facility that the
AO accredits, the AO would be required to take steps to prevent the
surveyor from having any involvement with the survey of that facility;
having input into the results of the survey and accreditation for that
facility; having involvement with the pre- and post-survey activities
for that facility; and having contact with or access to the records for
the survey of that healthcare facility.
<bullet> We proposed at Sec. 488.9(b) to revise the types of
validation programs by adding a new type of validation survey to be
conducted by SA or CMS surveyors.
<bullet> We proposed a new paragraph Sec. 489.20(z) which would
require a terminated provider attempting to re-enroll to follow the
terms of proposed new Sec. 489.57(b) noted below.
<bullet> We proposed to redesignate the current Sec. 489.57(a) and
(b) and add a new paragraph (b) at Sec. 489.57, to require that
Medicare-certified providers or suppliers that have been involuntarily
terminated from the Medicare and/or Medicaid program must meet several
requirements before CMS will approve their new Medicare agreements.
Proposed Sec. 489.57(b)(1) would place the terminated provider or
supplier under the oversight of the SA for a reasonable assurance
period (with the length of time to be determined by CMS) for the
purpose of demonstrating compliance with the Medicare conditions.
Proposed Sec. 489.57(b)(2) would require the provider or supplier to
remain under the exclusive oversight of the SA until the SA has
certified and/or CMS has determined its full compliance with all
Medicare conditions, and CMS has approved the new agreement for
participation in the Medicare/Medicaid program. Proposed Sec.
489.57(b)(3) would require that while a provider or supplier was
terminated from the Medicare program, under the oversight of the SA,
and when a new agreement for Medicare participation was pending, CMS
would not accept or recognize deeming accreditation of that provider or
supplier from a CMS-approved accrediting organization.
<bullet> We also proposed to remove the reference at Sec.
488.4(a)(2) (inadvertently proposed as a revision to the proposed
recodification at Sec. 488.4(a)(4)) that currently excludes end-stage
renal disease (ESRD) facilities from the opportunity for accreditation,
to reflect a change included in the Bipartisan Budget Act of 2018 (Pub.
L. 115-123). Consistent with this same provision, we also proposed to
remove the reference restricting transplant programs from utilizing an
accreditation option.
<bullet> We proposed to integrate the acute care hospital and
psychiatric hospital survey processes for SAs to ensure that there was
a systematic and integrated survey of psychiatric hospital quality and
safety. We also proposed to expand the acute care hospital
accreditation program for AOs to include current psychiatric hospital
accreditation standards that would require AOs with existing CMS-
approved hospital programs to expand their existing hospital programs
to include survey activities of psychiatric services in psychiatric
hospitals.
<bullet> We solicited comments on whether CMS should limit the
number of times an AO could submit an incomplete initial application
for a new accreditation program. We sought comment on this question
because we recently received several incomplete applications which
required multiple pass backs due to the applicant's failure to provide
information about issues, such as their financial viability, survey
processes which appeared not to be operationalized, or similar
concerns.
<bullet> We note that the regulations have some minor phrasing
changes related to updated style guidelines.
II. Background
A. Legislative History
To participate in the Medicare program, providers and suppliers of
healthcare services must, among other things, be in substantial
compliance with the applicable statutory requirements of the Social
Security Act (the Act), as well as CMS' regulatory requirements related
to the health and safety of patients. These health and safety
requirements are generally called CoPs for most providers; Requirements
for Participation for skilled nursing
[[Page 36373]]
facilities (SNFs) and Medicaid Nursing Facilities (NFs) (collectively,
long-term care facilities); and CfCs for Ambulatory Surgical Centers
(ASCs), Rural Health Clinics (RHCs), Federally Qualified Health Centers
(FQHCs), ESRD facilities, and some types of suppliers (collectively
referred herein as Medicare conditions). A Medicare-certified provider
or supplier that does not comply with the Medicare conditions risks
having its Medicare provider or supplier agreement terminated. Medicaid
service providers or suppliers that are required by CMS or the State to
have Medicare approval would also be affected.
In accordance with section 1864 of the Act, the SAs or other
appropriate local agencies, under an agreement with the Secretary of
the Department of Health and Human Services (the Secretary), perform
surveys of healthcare providers and suppliers to assess their
compliance with the applicable Medicare conditions for the purpose of
certification for participation in the Medicare/Medicaid program. There
are several types of surveys conducted, including initial
certification, recertification, and complaint surveys. The SAs and CMS
also perform surveys in certain circumstances for the providers and
suppliers that are accredited by an AO and deemed to meet Medicare
requirements. For example, the SA performs complaint surveys for
healthcare providers that are accredited by an AO, if the complaint was
received by the SA directly. The SA also performs surveys of AO-
accredited healthcare providers that have had their participation in
the Medicare program terminated, that wish to be surveyed by the SA
instead of an AO, and for the purpose of validation of the results of
an AO's surveys. Rules, regulations, and guidance for the certification
process performed by the SAs are discussed in the CMS State Operations
Manual (SOM) \1\ or communicated via Quality, Safety & Oversight (QSO)
policy memorandums.\2\
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\1\ CMS Internet Only Manual, Pub. 100-07, available at <a href="https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/internet-Only-Manuals-IOMs-Items/CMS1201984">https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/internet-Only-Manuals-IOMs-Items/CMS1201984</a>.
\2\ <a href="https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/SurveyCertificationGenInfo/Policy-and-Memos-to-States-and-Regions">https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/SurveyCertificationGenInfo/Policy-and-Memos-to-States-and-Regions</a>.
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Some provider types may only be surveyed by the SA and cannot use
AOs while others cannot be surveyed by SAs pursuant to statute but can
only participate in Medicare if accredited by a CMS-approved AO. We
refer readers to section ``III. Summary of the Proposed Provisions,
Public Comments, and Responses to Comments on the Proposed Rule'' of
this final rule with comment period for additional information. For
those providers participating via State survey, based on the SA's
certification of a provider's compliance or noncompliance and
recommendation, CMS determines whether the provider or supplier
qualifies, or continues to qualify, for participation in the Medicare
program. Additionally, section 1865(a) of the Act allows most
healthcare facilities to demonstrate their compliance with the Medicare
conditions through accreditation by a CMS-approved program of an AO, in
lieu of being surveyed by SAs for certification. This is referred to as
``deeming'' accreditation. This is because CMS-approved AOs are
recognized by the Secretary as having accreditation programs with
accreditation standards that meet or exceed those of Medicare.
Therefore, any provider or supplier that is accredited by an AO under a
CMS-approved accreditation program is deemed by CMS to have also
complied with the applicable Medicare conditions or requirements. The
AOs perform initial, re-accreditation, follow-up, and certain complaint
surveys.
In December 2020, Division CC, section 407 of the Consolidated
Appropriations Act of 2021 (CAA, 2021) (Pub. L. 116-260), amended Part
A of Title XVIII of the Act to add a new section 1822 to the Act, and
amended sections 1864(a) and 1865(b) of the Act, establishing new
hospice program survey and enforcement requirements. CMS issued
implementing regulations for SAs and AOs in the CY 2022 Home Health
Prospective Payment System Rate Update (HH PPS) final rule (86 FR
62240). The HH PPS rule finalized changes to increase and improve
transparency, oversight, and enforcement for hospice programs under SA
and AO oversight. Additionally, the HH PPS final rule in part requires
hospice program AOs to measure and reduce inconsistency in the
application of survey results among all surveyors. The HH PPS final
rule: (1) requires AOs with CMS-approved hospice programs to use the
same survey deficiency reports as the SAs (Form CMS-2567, ``Statement
of Deficiencies'' or a successor form) to report survey findings; (2)
requires comprehensive training and testing of SA and AO hospice
program surveyors; and (3) prohibits SA and AO surveyors from surveying
hospice programs for which they have worked in the last 2 years (and by
which there might be a perceived or actual conflict of interest for
these surveyors).
CMS is responsible for: (1) providing ongoing oversight of AO
accreditation programs to ensure that a provider or supplier accredited
by an AO meets the required Medicare conditions; (2) ensuring that an
AO has formalized procedures to determine whether the healthcare
facilities deemed under its accreditation programs meet the AO's
accreditation standards (which must meet or exceed the applicable
Medicare program requirements); and (3) ensuring that the AO's
accreditation standards and practices for surveying providers and
suppliers meet or exceed the Medicare conditions and practices for
granting approval.
For some provider and supplier types, accreditation is voluntary
and seeking deemed status through an accreditation organization is an
option, not a requirement, for these Medicare-certified providers and
suppliers. A provider or supplier has the choice to seek deeming status
and accreditation from an AO with a CMS-approved program or
certification through the SA survey process. A nationally recognized AO
may have accreditation services which are not specifically related to
Medicare-participation or Medicare conditions and an AO may offer
accreditation services to a provider or supplier which Medicare does
not recognize for deeming status, such as long-term care facilities.
The AO may also provide accreditation with a deeming option, which is
that their deemed program is recognized and approved by CMS to meet or
exceed the Medicare program requirements. We refer readers to section
``III.K. Require the AOs that Accredit Medicare-Certified Providers and
Suppliers to Use Medicare Conditions; and Strengthened Survey Process
Comparability'' of this final rule with comment period for additional
context.
AOs typically charge healthcare facilities a fee for the
accreditation services they provide. AOs generally offer at least two
accreditation options, which include non-CMS approved accreditation,
and accreditation for the purpose of participating in the Medicare
program. By ``non-CMS approved accreditation'' we mean accreditation
that is offered by the AOs with an accreditation program but is not
approved by Medicare, and which is not used for Medicare purposes. Such
accreditation could be used for individual State accreditation purposes
or additional professional accreditations that a provider or supplier
seeks for business purposes, such as The Joint Commission's (TJC's)
Nursing Care
[[Page 36374]]
Center accreditation for skilled nursing facilities, which is not
recognized by CMS as an option for deemed status.
This final rule with comment period will apply only to the AOs with
CMS-approved programs that accredit Medicare-certified providers and
suppliers and those entities they accredit. The provisions of this
final rule will not apply to the following parties: (1) healthcare
providers and suppliers that are not currently accredited by AOs, such
as, but not limited to, nursing homes and comprehensive outpatient
rehabilitation facilities (CORFs); (2) healthcare providers and
suppliers that are certified by the SAs, such as those who elect not to
be deemed through an AO; (3) AOs that accredit non-certified suppliers;
(4) non-certified suppliers; and (5) AOs that accredit laboratories
(under the Clinical Laboratory Improvement Amendments of 1988 (CLIA)).
B. Regulatory Overview of CMS' Rules Regarding AO Programs
The current regulations at 42 CFR 488.4 set forth the general
provisions for CMS-approved accreditation programs for Medicare-
certified providers and suppliers. 42 CFR 488.5 sets out application
and re-application procedures for national AOs that seek to obtain CMS
approval of their accreditation programs, often called ``deeming
authority.''
The AO application and re-application procedures set forth at Sec.
488.5 for Medicare-certified providers and suppliers task CMS with the
responsibilities of approval and oversight of the AOs' accreditation
programs while ensuring that the accredited providers and suppliers
meet or exceed the Medicare conditions.
CMS conducts a thorough review of each accreditation program
application submitted by an AO for CMS approval. This review
establishes the ``comparability'' of the AOs accreditation standards
with Medicare, to determine whether the AO's standards meet or exceed
the Medicare conditions. The application review process also includes a
review of the AO's survey processes and procedures, the AO's surveyor
training, and their policies and procedures for the oversight and
enforcement of provider or supplier entities they accredit. The
application review team also reviews the qualifications of the AO
surveyor staff. In addition, CMS reviews the AO's financial status, to
determine their solvency and potential for longevity of operations.
Section 488.5(e)(1) requires that we publish a notice in the
Federal Register when we receive a complete initial or renewal
application from a national AO seeking CMS approval of its
accreditation program. The Federal Register notice identifies the
organization and the type of providers or suppliers to be covered by
the accreditation program and provides a 30-day public comment period.
CMS has 210 days from the receipt of a complete application to publish
notice of approval or denial of the application. Upon approval, any
provider or supplier subsequently accredited by the AO's approved
program would be deemed by CMS to have met the applicable Medicare
conditions and would be referred to as having ``deemed status.''
C. Congressional Report on the Oversight of National AOs and CMS-
Approved Accreditation Programs
We are required by section 1875(b) of the Act to submit an annual
Report to Congress \3\ on CMS' oversight of national AOs and their CMS-
approved accreditation programs. This report contains information
related to the AOs' activities in a fiscal year (FY) and provides a
comparison of these activities to the activities of previous years.
Within this report, we also measure the ``disparity rate,'' which is a
comparison rate based on AO findings of non-compliance during an
accreditation survey and the SA findings of non-compliance for the same
facilities found during a look-back validation survey.
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\3\ The most recent Report to Congress may be accessed at
<a href="https://www.cms.gov/files/document/qso-22-06-ao-clia.pdf">https://www.cms.gov/files/document/qso-22-06-ao-clia.pdf</a>.
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For certain types of healthcare facilities, there are three levels
of adverse findings on an SA survey: immediate jeopardy (IJ);
condition-level deficiencies; and standard-level deficiencies. Sections
488.1 and 489.3 define immediate jeopardy as a situation in which the
provider's or supplier's non-compliance with one or more of Medicare
requirements, conditions of participation, conditions for coverage or
certification ``has caused or is likely to cause, serious injury, harm,
impairment, or death to a resident or patient.'' When investigating a
potential immediate jeopardy situation, surveyors must find that there
is non-compliance by the provider or supplier, that serious harm has
occurred or is likely to occur, and that immediate action needs to be
taken by the provider/supplier (see Appendix Q of the SOM for
additional guidance). A condition-level deficiency means that for that
particular requirement under a Medicare condition of participation or
condition for coverage, also known as a CoP or a CfC respectively, the
facility's noncompliance is such that it substantially limits the
provider's or supplier's capacity to furnish adequate care or adversely
affects the health and safety of patients (Sec. 488.24(b)). Surveyors
may determine that a deficiency under a single standard alone may have
substantially limited a facility's capacity to furnish adequate care
and/or adversely affected the health and safety of the facility's
patients such that it rises to the level of a condition-level
deficiency. The manner and degree of the deficient practice is
considered to determine whether there is substantial noncompliance
(that is, a condition-level deficiency) or not. A standard-level
deficiency means that the provider is out of compliance with one or
more aspects of a regulatory condition or requirement that is not
severe enough to rise to the level of a condition-level deficiency. A
condition-level deficiency, however, is considered more serious in
nature and could lead to a facility being terminated from the Medicare
and Medicaid programs for non-compliance. Immediate jeopardy citations
are condition-level deficiencies that pose immediate jeopardy to
patient health and safety. On a validation survey, when the SA cites a
condition-level deficiency for which the AO has not cited a comparable
deficiency, the deficiency is considered by CMS to have been missed by
the AO and is a factor in determining the AO's ``disparity rate'' for
each facility type. The identification of one missed condition-level
deficiency by the AO results in the entire survey being counted toward
the disparity rate. The number of disparate surveys is divided by the
total number of validation surveys performed with respect to that AO by
various SAs, to determine the AO's disparity rate.
According to the most recent report, the FY 2020 Report to
Congress,\4\ average disparity rates for all CMS-approved AO programs
for the following facility types for the most recent year in the report
(FY 2019) are: Hospitals (42 percent); Psychiatric hospitals (45
percent); Critical Access Hospitals (46 percent); Home Health Agencies
(HHAs, 8 percent); Hospices (19 percent) and Ambulatory Surgical
Centers (34 percent). From FY 2018 to FY 2019, hospitals, HHAs and ASCs
had the only decreases in disparity rates, with a decrease of 5
percentage points, 11
[[Page 36375]]
percentage points, and 7 percentage points, respectively. The disparity
rates for psychiatric hospitals increased by seven percentage points
from FY 2018 to FY 2019. The disparity rates for Critical Access
Hospitals (CAHs) and hospices increased by 5 percentage points and 3
percentage points respectively from FY 2018 to FY 2019. The findings
and other information are consistent with previous reports, and no
other notable changes were observed in the FY 2020 Report to Congress
covering the FY 2019 period of activities. We note the impact of the
COVID-19 public health emergency (PHE) in relation to the decreased
representative validation survey sample size and disparity rates during
FY 2020, and the continued suspension of look-back validation surveys
since that point.
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\4\ <a href="https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/SurveyCertificationGenInfo/Downloads/QSO-19-17-AO-CLIA.pdf">https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/SurveyCertificationGenInfo/Downloads/QSO-19-17-AO-CLIA.pdf</a>.
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D. CMS Validation Survey Pilot
As part of our ongoing efforts to enhance transparency and our
oversight of the AOs, in 2018, CMS began a pilot for integrated
validation surveys for accredited hospitals, known as the Validation
Redesign Program (VRP) pilot. In a VRP pilot survey, the SA teams
accompany the AO survey teams on a reaccreditation survey for an
accredited facility for the purpose of evaluating the AO surveyors'
competency at performing surveys and overall effectiveness during the
survey process. The initial findings of the VRP pilot were discussed in
the proposed rule at sections IV.J. and IV.L.3. CMS plans to continue
to refine the validation process over the next several years to enhance
AO oversight and verify that providers/suppliers under deemed status
are in compliance with the Medicare conditions and focus surveys on key
quality concerns while reducing provider/supplier burden.
A national AO seeking approval of its accreditation programs in
accordance with section 1865(a) of the Act must apply for and be
approved by CMS for a period not to exceed 6 years. (See Sec. Sec.
488.5(a), (e)(2)(i)). An AO must submit a renewal application if it
wishes to seek re-approval of its accreditation program(s) before the
expiration date of its current CMS approval. Review of the AO's renewal
application in a timely manner allows CMS to ensure that there would
not be a lapse in accreditation for the providers and suppliers
accredited by the AO. Requiring the AO to submit a renewal application
periodically allows CMS to ensure that the providers or suppliers
accredited by that AO meet or exceed the Medicare conditions.
E. Overview of Transparency and Oversight of Accrediting Organizations
In September 2017, an article in the Wall Street Journal \5\ raised
concerns regarding the performance and transparency of AO surveys and
noted potential conflicts of interest between an AO's accreditation
services and its consulting services. As a result of this article, CMS
initiated an investigation into these allegations.
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\5\ The Wall Street Journal, ``Watchdog Awards Hospitals Seal of
Approval Even After Problems Emerge'' Stephanie Armour (September 8,
2017) <a href="https://www.wsj.com/articles/watchdog-awards-hospitals-seal-of-approval-even-after-problems-emerge-1504889146">https://www.wsj.com/articles/watchdog-awards-hospitals-seal-of-approval-even-after-problems-emerge-1504889146</a>.
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F. Prior Rulemaking--Accrediting Organizations Conflicts-of-Interest
Request for Information (RFI)
CMS is aware, from the information submitted with their
applications, that some AOs with CMS-approved accreditation programs
are also providing fee-based consultative services to Medicare-
participating healthcare facilities. Our understanding is that typical
AO fee-based consultative services include, but are not limited to, the
following:
<bullet> Assistance for clinical and non-clinical leaders
(including administrators) in understanding the AO standards and
Medicare conditions for compliance;
<bullet> Review of facility standards and promised early
intervention and action through simulation of a real survey, such as a
mock survey with comprehensive written reports of findings;
<bullet> Review of a facility's processes, policies, and functions;
<bullet> Identification of, and technical assistance for, changing
and sustaining areas in need of improvement; and
<bullet> Educational consultative services.
CMS acknowledges that independent fee-based consulting is a
valuable resource that can help providers and suppliers improve the
quality and safety of the care they provide. This does not mean that
the providers or suppliers who elect not to receive fee-based
consulting from an AO that offers it, or that providers or suppliers
that are accredited by an AO that does not offer this service would not
provide safe, quality care.
There are many third-party consultants that offer fee-based
consulting across all provider and supplier types. The availability of
third-party fee-based consultants give providers and suppliers access
to this educational service, if their AO does not provide fee-based
consulting. If a provider's/supplier's AO already offers fee-based
consulting, third-party consultants can offer such providers and
suppliers with an alternative, allowing providers and suppliers to
compare the effectiveness and quality of consultants to address their
needs within their cost limitations. The provider or supplier may also
be able to negotiate a price for educational services provided by a
third-party consultant, while this may not be an option with the AOs
that offer fee-based consulting. It is important to note there would be
no conflict of interest associated with the use of third-party fee-
based consultants because these consultants do not also make compliance
determinations about the provider or supplier.
Fee-based consulting services offered by AOs are not prohibited by
law or regulation. However, CMS is concerned that an AO's provision of
such fee-based consulting results in perceived or actual conflicts of
interests because of the contractual and financial relationship that
exists between the healthcare provider and the AO, which is a private
entity that profits from the performance of the inherently governmental
function of regulating healthcare providers through accreditation.
Because of this, on December 20, 2018, we published a Request for
Information (RFI) in the Federal Register entitled, ``Medicare Program:
Accrediting Organizations Conflict of Interest and Consulting Services;
Request for Information'' (83 FR 65331), hereinafter referred to as
``2018 AO Conflict-of-Interest RFI'', in response to increasing concern
about potential conflicts of interest created by the accreditation and
consultative activities of the AOs. Specifically, we solicited public
comments to determine whether offering consultative services to the
same entities an AO accredits may create actual or perceived conflicts
of interest between an AO's accreditation program and its consultative
program. We stated that this dual function may undermine, or appear to
undermine, the integrity of the accreditation programs and could erode
public trust in the safety of providers and suppliers that have been
accredited by CMS-approved AOs. We further acknowledged that certain
consulting services offered by some of the AOs, such as quality
improvement work and training of facility staff, may be beneficial to
some facilities and result in improvements in operations or the quality
of care furnished and may be provided with the best of intentions. We
stated that circumstances could arise where an AO has recommended a
facility for deemed status through their accreditation
[[Page 36376]]
service, while the consultancy service of the AO was generating revenue
assisting the same facility in passing the AO's own accreditation
surveys. Some AOs have indicated that they establish firewalls between
the arms of their businesses, but we stated that these firewalls may
not be sufficient to ensure that no conflicts of interest result from
these activities.
We further stated that, similar to quality improvement organization
(QIO) and external quality review organization programs, any AO with a
Medicare-approved accreditation program has assumed a position of
public trust and is responsible for acting on behalf of the public,
because the AO is performing a function that assists in the Federal
government's enforcement programs. We also expressed our view that AOs
voluntarily take on this position and responsibility when they seek
accreditation approval from CMS to accredit providers and suppliers for
participation in Medicare. Because of the responsibility to maintain
public trust and public health, we continually ensure that all entities
and programs, including AOs and their accreditation programs that
require CMS approval, be held to high standards of ethical conduct so
that everyone can have complete confidence in the integrity of Federal
government certification. We stated that the AOs' decisions to accredit
facilities must be made without regard to any additional services that
a Medicare provider or supplier might obtain through the AO or its
subsidiaries. We stated that this policy would ensure and maintain
public trust in the Medicare certification program.
In the 2018 AO Conflict-of-Interest RFI, we solicited public
comments to gather information for potential future rulemaking and to
obtain insight on mechanisms to address this potential conflict of
interest. We were specifically interested in ways to potentially modify
Sec. 488.5(a), which sets out the required information to be submitted
with an AO's application. For example, Sec. 488.5(a)(10) states that
the application information from the AO include the organization's
policies and procedures to avoid conflicts of interest, including the
appearance of conflicts of interest, involving individuals who conduct
surveys or participate in accreditation decisions.
We stated that potentially expanding Sec. 488.5(a)(10) by adding
provisions that would require the AOs to disclose information about any
consultative services they offer to facilities could further enhance
our oversight of AOs.
In addition, we solicited comments on the following issues:
<bullet> With respect to fee-based consultative services provided
by AOs to the facilities they accredit--
++ How are these services provided and communicated to the
facilities?
++ Are potential conflicts of interest disclosed?
<bullet> Are there other entities that could provide this training
besides the AOs?
<bullet> Whether commenters perceive a conflict of interest in AOs
providing fee-based consultative services to the facilities they
accredit.
<bullet> Whether the ability of an AO to collect fees for
consultation services from entities they accredit could degrade the
public trust inherent in an AO's CMS-approved accreditation programs.
<bullet> What the appropriate consequences or impacts should be, if
a conflict does exist.
<bullet> What firewalls may exist within an AO between
accreditation and consultation services, or what firewalls would be
prudent, to avoid potential and actual conflicts of interest.
<bullet> Examples of positive and negative effects which may arise
as a result of a conflict of interest.
<bullet> What the potential impact, financially and overall would
be if CMS were to finalize rulemaking which would restrict certain
activities that might give rise to a real or perceived conflict of
interest.
<bullet> When and/or under what circumstances it would be
appropriate for AOs to provide fee-based consultative services to the
facilities which they accredit.
<bullet> Whether, and if so under what specific circumstances, CMS
should review a potential conflict of interest, and what factors CMS
should look at to determine if a conflict of interest exists.
<bullet> A list describing under what circumstances the AOs or
interested parties would believe there to be a conflict; and under
which circumstances a conflict does not exist.
<bullet> The type of information which would be considered
necessary, useful and/or appropriate in proving or refuting our
hypothesis of a connection between the use of consultative services and
preferential treatment of accredited providers and suppliers. (See 83
FR 65335.)
We received 128 public comments in response to the 2018 AO
Conflict-of-Interest RFI. Approximately half of the commenters
(consisting primarily of AOs and healthcare facilities that use
consulting services) supported the use of AO consulting services and
stated that there is no conflict of interest associated with fee-based
consulting. The other half of the commenters (consisting of
individuals, provider associations, medical advocacy groups and one AO)
stated that the provision of fee-based consulting by the AOs creates a
conflict of interest.
Several commenters stated that the benefits derived from AO fee-
based consulting far outweigh any potential or actual conflict of
interest that may result. Many commenters believe that AO consulting
services allow the facility to seek information and guidance that helps
them understand, interpret and comply with the Medicare conditions and
regulatory requirements. These commenters stated that use of the AO's
fee-based consulting services helped to improve the safety and quality
of the care provided by the healthcare facility.
Many commenters stated that there are already implemented checks
and balances between CMS and the AOs that are sufficient to ensure that
no conflicts of interest occur between the AOs and their accredited
facilities. These commenters stated that the AOs have robust firewall
policies and procedures in place to prevent conflicts of interest
related to fee-based consulting. Many commenters also stated that CMS
has a specific AO fee-based consulting firewall policy in place and
that this policy is adequate to prevent any conflicts of interest.
However, CMS does not currently have such a policy.\6\
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\6\ In section IV.B.6. of the proposed rule, we proposed to
require any AO that provides fee-based consulting services, or its
associated fee-based consulting division or company, have written
fee-based consulting ``firewall'' policies and procedures.
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Several commenters stated that AOs are commissioned to ensure
compliance with the Medicare conditions. These commenters stated that a
big part of compliance is not only being punitive but informational/
educational. One commenter suggested that AOs are in a unique position
to provide this education and technical assistance because they
understand the complexity of the Medicare conditions. One commenter
stated that if AO fee-based consulting services were not provided,
facilities could see additional deficiencies cited due to
misinterpretation of requirements and multiple rounds of surveys,
generating still more cost to the facility.
Several commenters stated that the financial benefit derived by the
AOs from providing fee-based education is not significant. Some of
these commenters also stated that the AOs gained no benefit from the
success or results of accreditation whether they had assisted the
provider to deliver better services or not.
[[Page 36377]]
One commenter stated that they are not aware of other organizations
that would be capable of educating and advising healthcare providers in
a similar fashion as the AOs' consulting services. Several other
commenters expressed concern about having fee-based consulting services
provided by an independent third-party. These commenters stated that,
while there are other entities besides the AOs, such as QIOs, that
could provide training, the focus would solely be on quality rather
than the outcome of an accreditation.
Many commenters stated that the integrity of the accreditation
process is of utmost concern for regulators, providers, and patients
alike and that AOs should position themselves to be above reproach
regarding overseeing patient care and quality of services that
healthcare facilities provide, so as to retain the trust of patients
and the public. Several commenters suggested that anything that may
undermine the integrity of accreditation programs or the public trust
in CMS accredited providers and suppliers be considered and addressed.
One commenter stated that the ability of AOs to provide both survey
services and consulting services is a conflict of interest, which
results in a decreased level of trust among providers, Medicare, and
the public.
Many commenters expressed concern about the financial and
contractual relationship that exists between AOs and the healthcare
facilities they accredit. These commenters expressed concern that the
existence of a financial relationship between AOs and healthcare
providers casts a veil of doubt over the entire CMS hospital
accreditation process, eroding the public trust in CMS to maintain the
standard of care at our nation's hospitals and to ensure that Medicare
patients are receiving safe, therapeutic care. One commenter opined
that the business connection between the provider and the AO creates a
relationship that the AO could have an incentive to manipulate.
In addition, several commenters expressed concern about the
significant financial interest the AOs have in the provision of fee-
based consulting. One commenter stated that since AOs are being paid by
the healthcare facilities for both accreditation services as well as
consulting services, it is obviously in their financial interest to
keep the healthcare facilities accredited and not to create too much
dissatisfaction to incite the organization to seek another AO. Several
commenters expressed concern that this financial relationship might
provide the incentive for the AOs to ignore or downplay deficiencies
during the survey of a consultative client to increase the apparent
efficacy of its consulting services. Or, perhaps, an AO could
exaggerate the deficiencies on surveys to increase the apparent value
of the consulting services to providers. Because of the previously
stated concerns, several commenters suggested that CMS prohibit the AOs
from providing fee-based consulting to the healthcare providers and
suppliers they accredit.
G. Conflicts of Interest--The AO Owner's, Surveyor's, and Other
Employee's Interest in or Relationship With a Healthcare Facility That
the AO Accredits
It is typical for an individual healthcare professional, such as a
physician or nurse, to have concurrent employment relationships with
more than one healthcare provider. Many healthcare professionals, such
as physicians, physician assistants, and nurse practitioners have
multi-setting practices or are employed at more than one healthcare
facility. For example, a registered nurse (RN) may work on staff at a
hospital but also work at other hospitals through a medical staffing
agency. In addition, as employees of a healthcare facility, these
healthcare professionals could possibly gain a financial interest in
the healthcare facility through means such as being a contributor to
the construction costs of a new wing of the facility or buying stock in
the facility or its parent corporation. Management employees could be
awarded stock or stock options for the facility or its parent
corporation as part of their compensation and benefits package.
AOs frequently hire surveyors that are also employed at one or more
outside healthcare settings because the professional associations,
expertise, knowledge and skills held by these healthcare practitioners
make them an asset as a surveyor. This might include, for example, an
RN who is employed by a hospital and also works as a surveyor for an
AO. This employment scenario does not generally violate CMS policy or
regulations. Furthermore, an AO surveyor having other employment does
not, in and of itself, necessarily create a conflict of interest.
However, if the AO provides accreditation services to the healthcare
facility that employs the AO surveyor, this could cause a conflict of
interest if that surveyor is permitted to have any involvement in the
survey process for that healthcare facility.
CMS has recently encountered two situations in which an AO's
surveyor was also employed by the healthcare facility that was being
accredited by the AO. In one of these situations, an AO surveyor was
also employed in an administrative position at a rehabilitation
facility that was being surveyed by the AO. This situation was not
disclosed to CMS by the AO. Currently, CMS has no specific regulations
that would prohibit a conflict of interest related to an AO surveyor's
relationship with a healthcare facility that the AO accredits, except
for home health agencies and hospice programs.
Section 488.5(a)(10) of our regulations requires that an AO
provide, with its application seeking CMS approval of its accreditation
program, ``the organization's policies and procedures to avoid
conflicts of interest, including the appearance of conflicts of
interest, involving individuals who conduct surveys or participate in
accreditation decisions.'' However, Sec. 488.5(a)(10) does not provide
requirements for specific types of information or requirements that
should be contained in the AO's conflict-of-interest policies and
procedures. This regulation does not specifically prohibit or define
conflicts of interest and based on the comments to the 2018 AO
Conflict-of-Interest RFI, CMS proposed to revise this regulation to
more specifically address situations that should be included in the
AO's conflict-of-interest policy.
As noted previously, the SAs and AOs perform similar work. Section
4008 of the SOM describes examples of scenarios that would be conflicts
of interest for SA surveyors who have an outside relationship with a
facility that is surveyed by the SA.\7\ Currently, section 4008 of the
SOM applies only to SA surveyors and not AO surveyors.
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\7\ <a href="https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/som107c04pdf.pdf">https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/som107c04pdf.pdf</a>.
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Scenarios in which an AO surveyor has a relationship with a
healthcare facility that their AO accredits could represent a conflict
of interest. As CMS has no specific regulations that would proactively
address such conflicts of interest for AOs that accredit healthcare
providers other than home health agencies and hospice programs, we
proposed establishing several requirements to help mitigate such
conflicts of interest in section IV.B.7. of the proposed rule.
[[Page 36378]]
H. Public Comment on Whether it Is a Conflict of Interest for AO Board
Members or Advisors To Have an Interest in, or Relationship With, a
Healthcare Facility that the AO Accredits
As previously stated, it could be a conflict of interest when an AO
surveyor is involved with the survey of a facility with which that
surveyor has an employment, financial, business or other interest or
relationship. We note that in most cases, the AO board members do have
interests in or relationships with the healthcare facilities the AO
accredits. In many cases, the board members of the AOs frequently hold
upper management positions of a healthcare facility the AO accredits,
such as chief executive officer (CEO), director, or President. In the
proposed rule, we sought public comment as to whether it would be a
conflict of interest for an AO board member, AO advisor, or CEO or
other executive team members to also have a relationship with a
healthcare organization accredited by such AO. An AO advisor would be
an advisory committee member, advisor to the CEO, or an advisor to the
board of directors. We refer readers to the revisions related to an AO
owner's, surveyor's or other employee's interest in, or relationship
with, a healthcare facility the AO accredits in section III.J. of this
final rule with comment period.
We received comments in response to our request for public comments
on whether it is a conflict of interest for AO board members or
advisors to have an interest in or relationship with a healthcare
facility that the AO accredits. The comments and responses can be found
in section III.D. of this final rule with comment period.
III. Summary of the Proposed Provisions, Public Comments, and Responses
to Comments on the Proposed Rule
As stated in section ``I. Executive Summary'' and section ``II.
Background'' of this final rule with comment period, there are several
provisions related to oversight of AOs that we believe require
strengthening since we issued the 2015 AO final rule. Over the last
several years, we have worked closely with the AOs to establish and
implement an AO Liaison program in which we meet with each AO regularly
(at least on a quarterly basis). These meetings and discussions have
provided an avenue for CMS to also receive feedback on existing
Medicare conditions and our interpretive guidelines and allowed us an
opportunity to clarify our expectations for the AOs. Most importantly,
this experience has helped us to identify areas of our AO oversight
regulations in need of revision so that we might more clearly
articulate the requirements for all AOs with CMS-approved accreditation
programs. Therefore, we have become aware of the need to clarify,
reorganize, and amend our regulations to support a more efficient and
effective oversight process.
The proposed rule, titled ``Medicare Program; Strengthening
Oversight of Accrediting Organizations (AOs) and Preventing AO Conflict
of Interest, and Related Provisions'' (89 FR 11996 through 12064), was
published in the Federal Register on February 15, 2024, with a comment
period that ended on April 15, 2024. We received approximately 250
individual public comments from 58 separate commenters on our
proposals, including comments from AOs; ESRD facilities; national renal
groups, nephrologists, and patient organizations; patients and care
partners; manufacturers; healthcare systems; and nurses.
In this final rule with comment period, we provide a summary of
each proposed provision, a summary of the public comments received and
our responses, the policies and requirements we are finalizing for AOs
(including those for preventing AO conflicts of interest), and other
related provisions we are finalizing in this rule.
A. General Comments in Support of the Proposed Rule
Comment: Many commenters supported the provisions of the proposed
rule. They stated that the rule aims to protect patients, strengthen
oversight of AOs to ensure that the highest quality of care is being
delivered to all patients. Commenters also stated that this rule will
help to ensure that all AOs conduct their work in a consistent,
rigorous, and unbiased manner. The proposals made in the rule, if
finalized, will prevent conflicts of interest, streamline survey
processes and ensure more consistency between AOs and CMS or SA
surveyors. One commenter supported the proposed rule because they
believe it is imperative that as CMS seeks to improve oversight and
transparency of AOs, it avoids introducing unnecessary obstacles to the
ability of providers to seek accreditation through these AOs. One
commenter the proposal made in the proposed rule and further suggested
that CMS be more aggressive in their effort to strengthen the
requirements and process for deeming hospices eligible for Medicare
certification given the ongoing challenges related to hospice fraud,
waste, and abuse. Another commenter supported the proposed rule because
it will help the public know which healthcare facilities to choose from
and to be confident that any accredited facilities they do choose will
provide high-quality care.
Response: We thank these commenters for their support of the
provisions of the proposed rule.
B. Comments Expressing General Opposition to the Proposed Rule
Comment: Two commenters believe the proposed oversight will require
additional administrative work from CMS, which one commenter believes
is already concerned with existing staffing levels and which the other
commenter believes is only now returning to normal workloads after the
COVID-19 PHE.
Response: We appreciate these commenters' concerns for the
administrative burden on CMS staff to implement the provisions of this
rule. We will consider the potential for additional burden to CMS staff
when implementing these provisions. We anticipate a fully developed
workflow for the increased AO oversight provisions prior to
implementation of the rule.
Comment: One commenter opposed the provisions in the proposed rule
because they believe the extent of changes proposed are vast and far
reaching; they stated that many provisions contain ambiguities and
needed additional clarification.
Response: We thank this commenter for their comment. We appreciate
this commenter's concern for clarity. However, we are not able to
respond to this comment because the commenter did not provide enough
detail about the provisions they think were excessively far-reaching
and/or unclear.
Comment: Several commenters oppose the proposed rule because they
believe that CMS does not have the statutory authority to make such
proposals. One commenter stated that the Congress delegated only
limited authority to CMS to grant private AOs the ability to ``deem''
that a provider or supplier meets or exceeds the Medicare conditions
and that CMS' limited authority to regulate AOs must be tied to the
statutory purpose.
Another commenter believes that the Congress has not granted CMS
the authority to determine the AO's service offerings or to regulate
any aspects of the AO's operations, governance structure, or business
practices. In proposing that AOs only be allowed to provide certain
services at certain times, the commenter believes CMS has exceeded its
authority under the statute,
[[Page 36379]]
venturing into operational grounds with which the Congress never
intended the agency to interfere.
Response: We respectfully disagree. CMS is using the authority
established by the Congress under section 1865 of the Act to establish
certain requirements for AOs in this rule. The Congress gave CMS broad
authority for oversight over the AOs.
Comment: One commenter recommended that instead of implementing all
of the provisions in the proposed rule, we instead select provisions
for implementation that receive the least amount of negative public
comments, then at a later date, update the proposed changes that may be
viewed by some as more burdensome and imprecisely drafted, followed by
the issuance of a RFI with an extended comment period that allows time
for detailed and evidence-based responses. The commenter believes this
segmented approach will allow both CMS and the AOs to focus on
perfecting the selected changes without being overwhelmed and overly
burdened by the number of changes implemented at one time.
Response: We thank the commenter for their recommendations but
respectfully disagree with this approach to finalizing the rule we
proposed in February 2024. We note that we did publish an RFI on
December 20, 2018 (83 FR 65331), seeking public input on our oversight
of AOs, particularly with regard to AO conflict-of-interest issues. We
carefully considered the information received on the 2018 RFI as well
as the public comments received on the February 2024 proposed rule as
we developed this final rule with comment period.
C. Add Definition of ``Unannounced Survey'' to Sec. 488.1
We proposed to add a new definition of ``unannounced survey'' to
Sec. 488.1. The definition of ``unannounced survey'' would be
consistent with the definition of ``unannounced'' contained in the
Merriam-Webster dictionary, which is ``without previous notice or
arrangement and therefore unexpected''. Adding this definition of
``unannounced survey'' would support the existing requirements set out
at Sec. 488.5(a)(4)(i) and in our sub-regulatory guidance. This
proposal clarifies and codifies existing requirements under Sec.
488.5(a)(4)(i), which requires that surveys must be unannounced, which
means that the facility must be unaware of the survey until the time
that the survey team arrives, and that the provider or supplier would
not receive notice of the survey until the survey team arrives at the
facility. Our long standing policy behind the term ``unannounced
survey'' is within Chapter 2, Section 2700A of the SOM, outlining the
expectation that all surveys of providers and suppliers (other than
clinical laboratories) must be unannounced to the provider or supplier
being surveyed. This means that the provider or supplier to be surveyed
would not receive notice of the survey until the survey team arrived at
the facility for the survey, as is also currently the AO's process for
complaint surveys. The proposed definition for ``unannounced survey''
would also state that unannounced surveys must be scheduled by the AO
in a manner so that their timing and occurrence will not be predictable
to the healthcare facility being surveyed.
One of the primary reasons surveys conducted by either the SA or
the AO are required to be unannounced is to prevent the provider or
supplier from making unusual preparations for the survey that would not
represent the ongoing typical condition of the provider, and the true
nature and quality of care provided. Examples of these activities would
include unusual cleaning activities, painting, clearing obstructions
from halls and entrances, denying leave to staff during that time or
calling staff back to inflate staffing availability, and re-reviewing
medical records outside of what is normally done. If a provider or
supplier knows the exact time a surveyor will be onsite, it may
temporarily adjust its typical practices such as staffing, which would
provide an unrepresentative picture to surveyors of the quality of care
typically provided to patients or residents. Any notice to facility
leadership via organizational websites, emails, or phone calls prior to
surveyors arriving onsite is considered a violation of CMS regulations.
In 2009, CMS clarified this expectation in the Survey &
Certification Policy Memorandum 09-41,\8\ to advise that announcing of
surveys was in conflict with CMS regulations. In the effort to align AO
survey processes with CMS survey processes (which are followed by the
SA surveyors), as outlined in section IV.C. of the proposed rule, we
determined that additional clarity regarding this prohibition was
needed. Defining the term ``unannounced survey'' within the regulation
as opposed to our SOM (sub-regulatory guidance) would provide clarity
regarding our expectations, and would mirror the processes used by the
SAs, who do not announce their surveys (except for clinical
laboratories); as noted, any AO practice of announcing surveys could
undermine the integrity of the survey process. While we recognize that
some AOs may have provided up to a 60-minute advance notice of the
survey team arriving onsite for initial and reaccreditation survey
activities, this practice is inconsistent with the processes followed
by our SAs and inconsistent with the AOs' own survey processes for
complaint surveys (which are always unannounced). Therefore, in
accordance with Sec. 488.5(a)(4)(i), which requires unannounced
surveys, as well as our long-standing policy in Chapter 2, Section
2700A of the SOM, we proposed to define ``unannounced survey'' to
clarify through this definition that all surveys of providers and
suppliers (other than clinical laboratories) must be unannounced and
any advance notice to facilities would be prohibited. This definition
would ensure clarity in the requirement that applies to AOs as well as
SAs and further support our initiative to bring consistency to survey
practices as outlined in section IV.C. of the proposed rule.
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Furthermore, the definition of ``unannounced survey'' ensures that
the timing of recertification surveys is also unpredictable. AOs
generally complete comprehensive re-accreditation surveys of their
client providers and suppliers every 32 to 36 months. However, some
providers or suppliers have informed us that they know when an AO is
scheduled to survey the facility--the AO may schedule the facility for
survey within the same week or month every survey cycle, or has
narrowed its schedule via the use of blackout days, or informed the
facility close to the time of the survey via administrative contact
from the AO, such as payment collection, confirmation or change of
address notification or other facility-AO specific information. All of
these practices undermine the integrity of the unannounced survey
process.
We received several comments, with a majority of the comments in
general support of our proposed definition. The comments and our
responses to the comments are set forth below.
Comment: We received several comments supporting our proposal for
unannounced surveys, restricting blackout dates and ensuring the
unpredictability of surveys. One commenter stated that an unannounced
survey will enable the surveying organization to more effectively
assess the organization in its normal state, identify areas of risk and
subsequently
[[Page 36380]]
improve patient care. One commenter supported our proposed definition
of ``unannounced survey'', highlighting that unannounced surveys would
not only provide more consistency among AOs and SAs, but also may
impact the proliferation of fraudulent hospices. Another commenter
stated that announcing any survey allows companies time to prepare and
that unannounced surveys will ensure that surveyors receive honest
results. One commenter also stated that all surveys should be
unannounced without the facility being aware of the survey until the
arrival of the survey team. One commenter also stated that among CMS'
proposals for increased comparability, the most important aspect was
use of the unannounced survey to avoid rigging of the system.
Response: We appreciate the commenters support of the proposed
definition of ``unannounced surveys''. We agree that adding the
definition will help ensure more consistency among AOs and SAs and the
integrity of survey results.
Comment: We received one comment noting that the proposed
definition of ``unannounced surveys'' and the preamble discussion
within the proposed rule are consistent with CMS' 2023 notice letter to
AOs (discussing unannounced surveys and blackout dates). The commenter
stated that CMS overestimated the actions facilities could take to
improve the results of an impending survey on short notice. The
commenter urged CMS to consider allowing hospitals a 24-hour notice of
the survey to ensure appropriate staff would be available during the
survey and to maximize access to hospital leadership and other staff
who could answer surveyor questions. The commenter suggested that this
would allow for a more efficient survey process and that survey results
would be more useful and reflective of the care provided by the
facility. The commenter stated that a 24-hour window would not allow
sufficient time to make outcome-changing preparations. Finally, the
commenter also suggested that when AOs combine complaint investigations
with the required 36-month reaccreditation survey the type of survey is
frequently not identified by the surveyor. The commenter implied that
this process is confusing for hospital staff and risks conflating the
results and urges CMS to ensure surveyors clearly identify the purpose
of the survey with outreach to hospital staff to address issues which
may arise.
Response: While we appreciate the commenter's concern, we note that
we proposed to add a definition, which does not change the requirement
at Sec. 488.5(a)(4)(i) that was discussed in the 2023 letter the
commenter mentioned, which is a letter from our Quality, Safety &
Oversight Group Director that was sent to the AOs through our AO
liaisons. Surveys are intended to assess the daily operations of the
facility at any time. Facilities should always have processes in place
to ensure continuity of care and operations in the event that
leadership is not available or onsite. Therefore, we believe that
advance notice could give leadership an opportunity to appear involved
in the facility, when in normal operations, leadership could be absent
or not as involved as made out to appear. Additionally, a 24-hour
notice could allow for a facility to increase staffing for the day of
the survey or clean areas of the facility which otherwise would have
not been changed. As for the commenter's concern that when complaint
investigations are incorporated into a recertification/reaccreditation
survey, we note that Chapter 5 of the SOM allows both SAs and AOs to
combine complaint investigations into the next survey activity if the
complaint was triaged as low-priority. However, we understand the
commenter's concerns for the need of a transparent process and believe
that adding a regulatory definition for ``unannounced survey'' will
further that goal.
Comment: We received several comments raising concerns about
unannounced surveys and the potential for this to disrupt operations.
One commenter specifically stated that unannounced surveys disrupt the
daily operations of healthcare facilities, potentially affecting
patient care and staff workflows. The commenter also stated that this
is a resource burden where facilities may need to allocate more
resources to maintain constant readiness for survey. Another commenter
stated that some individuals who support regulatory surveys may not
work onsite at the facility and that certain departments such as
infection prevention, quality or others may be covered by individuals
working in multiple locations, especially in rural locations.
Alternatively, one commenter stated that surveys should not be delayed
more than 30 minutes of the reported opening time. Finally, two
commenters also advised that notification on the initial day of survey
is critical to ensure key members are present, negate interruptions in
the facility's operations, and ensure coordination, especially for
multi-site institutions. One of the two commenters specifically stated
that same-day notification would protect patient and workforce safety.
Response: While we appreciate the commenters' concerns, we note
that CMS has expected that all survey activities from the SAs and AOs
are to be unannounced and has reiterated this expectation in Sec.
488.5(a)(4)(i), the SOM, and other subregulatory guidance.\9\ This
long-standing requirement ensures that surveyors can observe a
facility's daily operation and that facilities do not make adjustments
to pass the survey, as implied by the commenter. Surveyors are flexible
and are required to work around the facility's schedules and its daily
requirements to provide patient care. For instance, if a Registered
Nurse is assisting a survey team with record reviews but needs to see
patients, the expectation is that patient care takes priority over
survey activities. Similarly, should a facility have staff which
support the daily operations but may be off-site, surveyors will wait
for their arrival and conduct other survey activities during that time,
or even conduct telephone interviews should the individual not be able
to travel to the facility on the survey date(s). We agree with the one
commenter related to delay of survey activities upon arrival beyond 30
minutes should not be the norm; however, we believe that the facility's
verification of the survey team and beginning the survey processes
(including the facility gathering required documentation) should not be
significantly slowed. Surveyors may delay the formal entrance
conference to await leadership or staff the facility may want present,
especially in situations with multiple locations.
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Comment: One commenter advised that unannounced surveys and the
inability to provide blackout dates would pose challenges for hospitals
and accreditation specialists. Specifically, the commenter suggested
that blackout dates and announced surveys offer crucial preparation
time, the ability to allocate resources efficiently, conduct self-
assessments and identify deficiencies proactively. The commenter also
stated that lack of prior knowledge of the survey amplifies stress
among the facility's staff and hampers productivity and morale in a
hospital setting. The commenter also suggested that announcing survey
activities in advance would allow for continuous improvement and ensure
high standards of care.
[[Page 36381]]
Response: We thank the commenter for expressing concerns related to
unannounced surveys and blackout dates. While we understand unannounced
survey activities can pose a challenge, this has been a long-standing
requirement. Unannounced survey activities are intended to assess a
facility's quality of care provided on any given day and to prevent the
provider or supplier from making special preparations for the survey
that would not represent the ongoing typical condition of the provider
and true nature and quality of care provided, such as increasing
staffing that would not usually be scheduled; adjusting records and
practices; and unusual cleaning or changes to its physical environment.
We do not want to provide an opportunity for facilities to demonstrate
a different picture to surveyors from how the facility normally
operates. Additionally, we expect that facilities are survey-ready,
meaning always in compliance with the Medicare conditions, at all
times. Therefore, allowing facilities to choose dates that they wish
not to be surveyed further compromises a true depiction of how the
facility operates on any normal business day. Related to the
commenter's suggestion that announced surveys allow for continuous
improvement and ensure high standards of care, we believe by adding the
definition of ``unannounced survey'' and continuing the requirement for
unannounced surveys should have no bearing on facilities providing
high-quality care to patients.
Comment: We received two comments raising concerns specific to our
discussion and restriction of blackout dates. One commenter stated that
prohibiting blackout dates would make it very difficult for
organizations to successfully support survey activities while
maintaining day-to-day operations. The commenter stated that
organizations may not always have the bandwidth to support multi-day
regulatory surveys, as staff or leaders must escort surveyors, answer
questions, and attend meetings all while supporting and providing
patient care. Another commenter voiced significant concerns with the
prohibition of blackout dates, highlighting the drastic workforce
shortages as the result of the COVID-19 pandemic and a strained health
system. This commenter implied the burden associated with staff having
to provide care to patients while providing support to surveyors and
that the ability for a facility to request blackout dates, as well as
pre-survey contact with the AO, ensures that the facility has the
necessary resources, to include staff, files, manuals, and policies,
when the survey team arrives. Additionally, the commenter raised
concerns related to unannounced surveys, as some facilities may be
supported by individuals who cover multiple locations.
Response: We appreciate the commenters' concern related to blackout
dates and the challenges which could arise regarding adequate staff to
support the survey teams. The existing regulations 42 CFR
488.5(a)(4)(i) require unannounced surveys, as well as our long-
standing instructions in Chapter 2, Section 2700A of the SOM. If a
provider or supplier knows the exact time a surveyor will be onsite,
even shortly before their arrival, it may temporarily adjust its
potentially noncompliant and typical practices (for example, regarding
staffing). This can lead to findings that are not representative of the
quality and the safety typically provided to the facility's patients.
Allowing facilities to request dates when they wish not to be surveyed
is not consistent with our survey expectations. Furthermore, some AO
blackout date policies provide the caveat that the wishes of the
facility may not be guaranteed, we believe this practice is
inconsistent with the requirements and policies for unannounced surveys
and the expectation that a provider/supplier must be always ``survey
ready''. If an AO learns that a facility has a situation that would
decrease the efficacy of an onsite survey (such as a sole practitioner
who will not be at an ASC and no surgeries will be performed that day),
the AO may pick an alternate date. This decision, however, rests with
the AO and should not be driven by the facility. We appreciate the
commenter's concerns surrounding staffing shortages in a post COVID-19
environment and the challenges for supporting survey activities.
Surveys are intended to assess the normal day-to-day operations of a
facility and are not intended to be disruptive. We recognize staff
participating in survey activity may need to pause assisting surveyors
to provide patient care or manage the facility's operation. Surveyors
and processes are intended to be flexible when onsite and patient care
and safety is our number one priority. However, it is imperative to use
unannounced surveys to assess the daily operations at the facility, and
to also ensure that patients receive quality care and sufficient staff
are available to the patients to provide a safe environment.
Comment: We received several comments raising concerns related to
the physical security and safety of staff. One of the commenters noted
that AOs had adopted pre-arrival notifications because health systems
experienced incidents of individuals impersonating surveyors accessing
a facility with fake credentials; the commenter also cited Bureau of
Labor Statistics data showing an increase in the number of healthcare
workers physically attacked. Another commenter noted that violence
against healthcare workers is on the rise, and pre-arrival notification
would allow proper identification of surveyors. A few commenters also
stated that a 30-minute to 60-minute pre-arrival notice would not allow
sufficient time for usual preparations to be made. Another commenter
echoed the comment regarding safety risks and stated that The Joint
Commission's process for pre-notification includes a survey agenda,
letter of instruction, biography, and picture of the surveyors for
facilities to verify and validate the surveyors are legitimate. Another
commenter stated that pre-survey notifications allow facilities to
maintain the physical security of the facility. This commenter stated
that notification ensures that health systems can inform their security
personnel and receptionists to expect the survey team.
Response: We appreciate the concerns related to unauthorized
individuals who may attempt to gain entry using fake credentials,
however, we note that this occurrence has not been reported by any non-
deemed facilities under various SAs' jurisdictions. SAs present
credentials at the time of arrival for authentication and entry into
the facility. We would expect AOs present their credentials as is
currently customary upon arrival. Furthermore, allowing a one-hour
notification to the facility could provide sufficient time for the
facility to adjust schedules or make certain environmental changes
which would not represent the true picture of the facility.
Additionally, with respect to the one AO's process for notification
(including photographs, biographies, and a survey agenda), AOs may
implement these types of processes upon arrival and entry to the
facility. Facilities are not restricted from verifying the survey team,
whether the survey team is from the SA or an AO; facilities may request
that surveyors wait until identification and verification is complete.
Furthermore, we note that complaint surveys are unannounced, therefore
arrival procedures and processes should not be different for initial or
reaccreditation surveys. We encourage AOs to develop processes to
ensure the integrity of unannounced surveys is maintained, while
accounting
[[Page 36382]]
for processes which allow facilities additional time to verify surveyor
identities.
Comment: One commenter, while in general support of the proposed
provision, also urged CMS to include instructions or guidance to
surveyors to be prepared with all the necessary identify verification
documentation immediately upon arrival and to allow some period of time
for hospitals to verify those identities before commencing the survey.
This commenter emphasized the importance of safety of patients and
staff.
Response: We appreciate the commenter's general support of
unannounced surveys, and we appreciate the commenter's concerns on
verification of identities. As outlined in the SOM program appendices,
surveyors are already expected to present their identification upon
entry at the facility. For example, Hospital Appendix A, Task 2 states
``The entire survey team should enter the hospital together. Upon
arrival, surveyors should present their identification.'' AOs must have
comparable processes. Furthermore, we note that some AOs have already
put identify verification processes in place, such as upon entry of the
surveyor, the surveyor lead uploads identification information and
survey notifications into portals accessible by their deemed
facilities. We encourage AOs to develop processes that ensure identity
verification and arrival procedures that align with CMS' expectations
of unannounced surveys.
Comment: We received several comments related to the predictability
of surveys and the requirement that AOs conduct surveys at least every
36 months. One commenter suggested that facilities roughly are aware of
the timeframe of their reaccreditation window. Multiple commenters
observed that the requirement for surveys every 36 months makes surveys
somewhat predictable.
Response: We thank the commenters for their concerns, and we agree
that while an accreditation/deeming cycle provides some level of
predictability, surveys must be unannounced with no prior notice of
arrival to the facility to maintain the integrity of the survey
process. The intent of the proposed provision and definition of
``unannounced survey'' is to ensure an AO's administrative contact with
facilities is variable and does not specifically address or imply the
survey dates or month.
Comment: We received several comments related to pre-survey contact
for administrative purposes. One commenter also stated that
administrative contact an AO has with its deemed facility is critical
to ensuring that the size and complement of survey teams, and the
length of surveys, are appropriate. This commenter stated that contact
prior to survey ensures that the AO has the facility's application
information, list of documents that will be required during the survey,
contact information, hours of operation, and surgical schedules. The
commenter stated that this maximizes the efficiency of the survey
process. Another commenter stated that small, solo practitioner, and
low-volume ambulatory surgical centers (ASCs) may operate with
significantly smaller staff or may be closed during regularly scheduled
hours due to illnesses of staff or due to vacations or personal matters
of the practitioner. The commenter suggested CMS did not account for
these operational challenges for pre-survey contact and pre-arrival
notifications. One commenter stated that the proposed definition of
``unannounced survey'' is counterproductive and penalizes responsible
providers from engaging with the AO for a productive survey. This
commenter stated that communication between the AO and the provider is
crucial to seamless execution of an unannounced survey and that surveys
are resource-intensive, therefore by prohibiting preparatory dialogue
would waste valuable time during the survey. The commenter also stated
that pre-communication does not compromise the integrity of the survey
process; operational preparations, including the logistical and
operational scope of the survey should occur in advance for an
efficient survey process.
Response: We appreciate the commenters' concerns related to pre-
survey contact, specifically administrative contact with a facility.
Our proposal aims to ensure administrative contact with facilities
prior to surveys is variable. We are not restricting AOs from
contacting facilities to verify application details or request
additional information, such as their current operating hours, upcoming
surgical schedules, any extension locations, or providing the
facilities with an agenda. However, contact prior to survey to gather
additional information must not suggest when the survey will occur. For
example, facilities due for a survey in December (near the end of their
accreditation cycle), should not be contacted each September and
surveys should not always be scheduled exactly in the same weeks of
November or December. We note that the proposed provisions do not
intend to limit an AO from communicating with their respective
organizations prior to the survey to gather certain administrative
information, such as operating hours and surgery schedules. The intent
is for AOs to vary their preparatory contacts in a manner which is
unpredictable and to ensure onsite surveys are unannounced. AOs must
survey facilities at least every 36 months; therefore, we would expect
any contact to be made 6 months, 3 months, 1 month or 2 weeks prior to
onsite surveys randomly. We also appreciate the commenter's concerns
and those challenges which may present due to small volume provider
types with limited hours of operation, such as ASCs that operate once a
week or a few times a month. We believe these requirements would not
inhibit an AO from gathering needed information to facilitate planning
for an unannounced survey.
Comment: We received one comment that the proposed definition for
``unannounced survey'' does not reflect the flexibility of Section
2700A of the SOM. The commenter stated that flexibilities allowed by
the SOM include a provision stating that non-long-term care facilities
(other than home health) may be given advance notice in certain
situations; and that our proposed definition does not reference the
SOM, furthering the concern that the advance notice provision could be
removed from future SOMs (for example, in effort to align with
regulatory text). Another commenter recommended that CMS retains a
window for notice of the survey the morning of and retain blackout
dates to protect time for emergency preparedness and key activities
requiring staff and resources.
Response: We appreciate the commenter's concern related to the
proposed definition of ``unannounced survey'' and our subregulatory
guidance in Chapter 2, Section 2007A of the SOM. The subregulatory
guidance provides for exceptions in limited circumstances. We recognize
that in emergency events, a survey could disrupt the facility's ability
to appropriately respond. However, CMS believes that emergency events
would be unforeseen and not predicted and SAs and AOs will generally
assess whether any survey activity would be feasible; the facility
would not need to provide blackout dates in such cases.
Comment: We received one comment suggesting inconsistent
implementation of unannounced surveys with one AO, which has led to
confusion. The commenter urged CMS to clarify its requirement for
unannounced surveys, including recognition that some
[[Page 36383]]
inpatient facilities could experience crisis scenarios that would not
allow leadership to concurrently respond to an on-site survey in a
timely manner.
Response: We appreciate the commenter's concerns, and we note that
the proposed provisions aim to clarify expectations for unannounced
survey activities across all AOs. We recognize that in managing
emergency events or crises that leadership may not be available during
the survey. However, we expect facilities to designate an individual
for daily operations should leadership be unavailable.
Comment: While generally supportive of the definition and
proposals, we received three comments which provided further
recommendations for improving the unannounced survey process and
encouraged CMS to consider these additional areas in subregulatory
guidance. For example, two commenters stated to ensure the unannounced
process works effectively, that CMS consider requiring providers to
ensure a ``duly authorized W-2 employee member of management'' or a
designated alternate be onsite at all times the office/facility is
open. These commenters suggested that this would ensure an individual
knowledgeable of company operations that has access to materials needed
by surveyors is present, in turn limiting the potential for independent
consultants to appear and act as the representative of the owner.
Finally, the commenters also suggested that CMS consider ``adding
authorized W-2 employee'' on the CMS-855 enrollment application as
another category for management which could allow SAs and CMS to
identify and monitor those individuals who appear as managing employees
for multiple facilities and identify potentially fraudulent operations.
Another commenter recommended CMS set clear expectations that an
authorized employee be onsite when the facility opens to ensure survey
activities are not delayed, as delays could limit the surveyor's
ability to conduct a robust survey which could benefit lower performing
agencies. This commenter suggested promoting prompt start times.
Response: We appreciate the commenter's support for our definition
of ``unannounced survey.'' We agree that leadership and a
representative knowledgeable of the facility is important during the
survey process and during the daily operations of the facility. We
believe that when facility leadership is not onsite or on personal time
off, the facility's governing body or leadership should appoint a
knowledgeable individual able to provide continuity of care and
operations for the facility; this individual should be able to provide
SA and AO surveyors with the information needed and guide the survey
processes. As noted in many CMS program appendices of the SOM, such as
Appendix A Task 2 for hospitals, CMS guidance to survey teams states
``If the Administrator (or person in charge) is not onsite or available
(for example, if the survey begins outside normal daytime Monday
through Friday working hours), ask that they be notified that a survey
is being conducted. Do not delay the survey because the Administrator
or other hospital staff is/are not on site or available.'' We expect
surveyors to begin survey activities upon arrival, and to notify staff
and management that a survey is currently taking place. Surveyors may
delay the entrance conference of the survey for leadership to arrive
and begin requesting documentation from the facility while waiting. As
for requiring prompt survey start times, we agree with the commenter,
yet we also recognize the need for flexibilities to allow staff who may
not be present at the time of the survey team arrival to travel to the
facility. Surveyors aim to be flexible to ensure robust surveys are
conducted with the appropriate staff. We encourage healthcare
facilities to have the appropriate leadership and staff present during
a survey.
Comment: We received one comment, while in general support of
unpredictability and unannounced surveys, that recommended unannounced
surveys only apply to follow-up surveys when a provider or supplier has
been previously cited for deficiencies. This commenter suggested that
this approach would work for a common purpose to achieving excellence
and that unannounced surveys as part of a follow up survey of a
corrective action would be more appropriate. This commenter suggested
this would build a level of trust and support, encourage facilities to
excel in quality and allow a safe space for exploration to ensure
health and safety standards are met, as opposed to penalizing poor
performance or actively seeking mistakes.
Response: We agree with the commenter that the intent of an
unannounced survey is not to give the impression that surveyors are
there to observe mistakes. The intent of an unannounced survey is to
ensure the facility is always providing quality and safe patient care
and to assess the daily operations of a facility against the Medicare
requirements. Surveys by both SAs and AOs are not punitive but rather
are an opportunity to identify deficiencies and mitigate potential harm
to patients as well as staff. Unannounced surveys will provide a better
assessment of the day-to-day operations at the facility. Furthermore,
without an accurate assessment during an initial or recertification/
reaccreditation survey and only requiring unannounced surveys as part
of the plan of correction process for condition-level deficiencies (45-
day revisit to the facility) would not accurately capture the normal
daily operations of the facility and allow for unusual preparations
hindering the integrity of the survey process.
Final Decision: The requirement for unannounced surveys has been a
long-standing requirement that ensures the integrity of the survey
process and provides surveyors a clear depiction of the day-to-day
operations of the facility without preparatory adjustments which may
not reflect the true quality of care being provided to patients. While
we appreciate some of the commenter's concerns surrounding physical
security as well as the need for preparation for the survey, both at
the facility level as well as from AOs gathering necessary information
pre-survey, we are hereby finalizing the definition of ``unannounced
survey'' without changes.
D. Conflicts of Interest
In the proposed rule, we cautioned that AOs that provide fee-based
consulting would not be allowed to raise their accreditation fees or
otherwise raise costs for the provider or supplier because of the
provision of survey-related education (90 FR 12009).
We proposed changes to Sec. 488.5(a)(10) to require AOs to have
policies and procedures for the prevention and handling of conflicts of
interest, and to notify CMS when those conflicts of interest arise,
because on several occasions, AOs have failed to notify CMS of such
conflicts of interest. These changes would broaden our oversight of the
AOs' handling and reporting of conflicts of interests. Additionally, by
requiring the AOs to provide CMS with more specific information about
their conflict-of-interest policies and procedures, CMS would be
afforded a more comprehensive look at how the AOs plan to handle
specific scenarios that CMS would deem to be conflicts of interest.
These proposed requirements would require those AOs that did not have
policies and procedures to prevent, address, and handle conflicts of
interests to develop and use them.
The proposed requirements at Sec. 488.5(a)(10)(iii) for the
submission of the AO's policies and procedures to
[[Page 36384]]
avoid conflicts of interest (as defined in paragraph (a)(10)(v) of this
section) included more detailed examples of possible scenarios that
could be conflicts of interest for accrediting organization owners,
surveyors, or other employees than those examples currently set forth
in section 4008 of the SOM, which provide examples of potential
conflicts of interest for SA surveyors.
A more detailed conflict-of-interest requirement is not necessary
for the SA surveyors because SA surveyors, who are State employees, are
generally required to report incidences of conflicts of interest to the
SA management, who is tasked with taking the appropriate action.
Additionally, State employees are generally prohibited from taking
certain types of conflicting outside employment as a matter of course,
so it is much less likely for such conflicts of interest to be an issue
for them and their management. By contrast, AOs are more likely to
encounter conflicts of interest. For example, AO owners, board members,
surveyors and other employees might also be employed by healthcare
facilities that are surveyed and accredited by that AO. Therefore, the
proposed requirements for AOs were more detailed and prescriptive than
those for SAs.
We also note here that we proposed two, slightly different,
definitions of ``immediate family member'' at Sec.
488.5(a)(10)(iii)(I) and at Sec. 488.8(k)(2) (89 FR 12060 and 12062
through 12063). While we believe that the two definitions are legally
and functionally equivalent, to avoid confusion over the minor language
differences we have decided to standardize the definition in both
provisions so that the language is the same. Therefore, we are making
minor changes to the definition of ``immediate family member'' at Sec.
488.8(k)(2) to now conform with the language we are finalizing at Sec.
488.5(a)(10)(iii)(I). We do not believe that these minor changes to
Sec. 488.8(k)(2) in this final rule with comment period are
substantively different than what we proposed, and therefore do not
require a new round of public comment or a waiver of proposed
rulemaking.
We received the following general comments about the conflict-of-
interest proposals made in the proposed rule that are not associated
with a specific conflict-of-interest proposed provision. We have
grouped these comments by general topic.
Comments Stating General Support for the Conflict-of-Interest Proposals
Comment: Many commenters supported the proposals that would prevent
conflicts of interest, streamline survey processes, and ensure more
consistency between AOs and CMS or SA surveyors. Commenters also voiced
strong support for ensuring that organizations responsible for issuing
standards, guidelines, education, training, and evaluations of
performance are not adversely affected by competing interests in real
or perceived conflicts of interest.
Response: We thank the commenters for their support of our AO
conflict-of-interest proposals.
Comments Expressing General Opposition to the Conflict-of-Interest
Proposals
Comment: One commenter stated that CMS has made multiple proposals
intended to prevent conflicts of interest and recommended that CMS
limit its conflict-of-interest (COI) proposals to sharing COI policies
and the COI log during a corporate onsite review or at the agency's
request. One commenter opined that the AOs should have the opportunity
to investigate and verify the existence of a conflict of interest
before providing notification to CMS.
Response: Limiting our proposals to only requiring that AOs share
their conflict-of-interest policies during application reviews would be
insufficient to fully identify and address AO conflicts of interest. We
agree that the AOs should be allowed to investigate and verify
conflicts of interest before reporting them to CMS. No proposals
included in the proposed rule prohibit an AO from verifying conflicts
on the part of its owners, surveyors, and other employees before
notifying CMS of these conflicts.
Comment: One commenter stated that they were perplexed as to why
CMS is not proposing the same conflict-of-interest requirements for
SAs. This commenter also pointed out that, in the proposed rule, CMS
stated that it believes a more detailed conflict-of-interest
requirement is not necessary for the SA surveyors because SA surveyors,
as State employees, are generally required to report incidences of
conflicts of interest to the SA management, who are tasked with taking
the appropriate action. CMS also opined that AOs are more likely to
encounter conflicts of interest.
This commenter further stated that, while they agree that the
nature of the business relationship between AOs and providers
inherently creates greater opportunity for conflicts of interest, they
believe nearly all the same situations CMS proposes as conflict-of-
interest definitions are potentially present with SA surveyors.
This commenter also pointed out that in the proposed rule, CMS
defined ``conflict of interest'' as a situation in which an AO, its
owner(s), surveyors, or other employees, or the AO's successors,
transferees, or assigns, or the immediate family members of the AO
owners(s), surveyors, and other employees, have an employment,
business, financial or other type of interest in or relationship with a
healthcare facility the AO accredits. CMS would deem a conflict of
interest to have occurred if one of the stated parties either knowingly
or unknowingly exploited their interest in or relationship with that
provider or supplier.
Response: We agree that there are potential conflicts of interest
for surveyors or other employees of the SA division conducting surveys,
and for the immediate family members of these individuals, if there is
an employment, business, financial or other type of interest in or
relationship between a health facility the SA surveys and its surveyors
and other SA employees and/or their applicable immediate family
members. However, in response to the comment questioning why CMS did
not propose the same conflict-of-interest requirements for SAs, CMS
does not believe that additional Federal conflict-of-interest
requirements are necessary for SAs as they are for AOs because
individual State laws, rules, and regulations regarding conflicts of
interest apply to each SA and its employees.
Comment: One commenter appreciated CMS' diligence in preventing
conflicts of interest during the accreditation process and agrees that
the proposed language will mitigate inappropriate biases from affecting
the survey processes. However, this commenter also recommended that CMS
establish language that prohibits SA surveyors from surveying any
facility where they were employed the previous 2 years, including
facilities that are part of a larger health system. This commenter
further opined that this is imperative in eliminating all conflicts of
interest from surveyors, regardless of the agency that employs them.
Response: SAs make their own policies and procedures regarding
staff matters such as the handling of staff conflicts of interest and
the Federal government typically does not interfere in internal State
decisions.
[[Page 36385]]
Nevertheless, consistent with Agreements between states and CMS
under section 1864 of the Act, CMS holds the SAs responsible for
assuring that any surveys for Medicare/Medicaid certification meet all
Federal requirements, including conflict of interest requirements.
Also, Chapter 4, Sections 4008 and 4008A of the SOM address the issue
of conflicts of interest on the part of SA employees. Section 4008 of
the SOM contains suggestions as to how the SA could handle such
conflicts of interest. Section 4008A provides examples of conflict-of-
interest scenarios on the part of SA employees that are similar to
those we set forth in the proposed rule (89 FR 12005).
Comment: One commenter stated that they have been proactive in
taking steps to prevent real or perceived conflicts of interest to
maintain the integrity and rigor of the accreditation process. This
commenter also stated that they implemented strong firewall and COI
policies to prevent any perceived or actual conflict of interest
between its fee-based consulting company and accreditation divisions.
This commenter stated that they strongly disagree with CMS' proposals
to place limitations on fee-based consulting services provided by AOs
to Medicare-certified providers and suppliers they accredit because of
concerns related to conflicts of interest.
Response: We note that in this final rule with comment period we
have not prohibited AO fee-based consulting in its entirety; we have
placed some limited restrictions on this service to help mitigate the
conflicts of interest associated with specific AO consulting services
and the timing of those services.
Comment: One commenter observed that the restricted periods, prior
to the initial survey and 12 months prior to each reaccreditation
survey, are exactly when education is needed. This commenter further
stated a belief that: (1) healthcare providers new to healthcare should
attend workshops that provide the interpretation of regulations; (2)
these workshops serve as a guide for businesses looking to navigate the
complex world of healthcare regulations; (3) by attending these
workshops, organizations could gain valuable insights and knowledge on
compliance requirements; and (4) this knowledge would enable them to
operate efficiently and effectively within the healthcare industry.
This commenter further stated that, in addition to attending the
workshops, the healthcare providers could also purchase workbooks and
tools that could further assist them in understanding and implementing
regulatory requirements.
Another commenter stated their view that the proposed rule would
prohibit AOs from providing support and guidance to the facilities that
they accredit in the months directly preceding a reaccreditation
survey, when it is most needed. The commenter argued that AOs provide
the most effective guidance to the facilities that they accredit
because they are intimately familiar with the specific requirements of
their standards. The commenter believed that the proposed rule would
seek to disadvantage a facility by preventing the accrediting AO from
providing valuable education during a critical period. In the
commenter's view, the proposed rule places unnecessary obstacles in a
facility's path to the provision of high-quality care.
Response: The restrictions on consulting do not prohibit the AOs
from providing consulting services or workshops to the providers and
suppliers they accredit prior to a re-accreditation survey. Consulting
services, as defined in Sec. 488.1, must not be provided within 12
months prior to the next scheduled re-accreditation survey pursuant to
Sec. 488.8(i)(2). This means, for example, that the AOs would still be
able to provide consulting, including workshops, to the providers and
suppliers it accredits during the 24 months after each accreditation
survey was completed in a 36-month accreditation cycle.
We believe that, after an accreditation survey, an AO's consulting
services would be geared towards helping the facility correct
deficiencies and non-compliance with the AO's accreditation standards
that were detected during the survey. We further believe that the best
time for an AO to provide such consulting services would be within the
24-month period after an accreditation survey has been completed.
During this period, the survey findings are fresh in the minds of the
facility management and compliance team and there would be an impetus
to address and correct the deficiencies cited. We further believe if
the AO provides consulting services to address deficiencies and
compliance concerns early in the 3-year accreditation period, the AO
could work with the affected provider or supplier, at their own pace,
to implement long-lasting and sustainable changes that would address
the deficiencies identified. On the other hand, if the AO waited until
12 months prior to the next accreditation survey due date to provide
consulting, it might only result in the implementation of quick
temporary solutions or corrective action just prior to the next
accreditation survey.
Comment: One commenter stated that CMS' proposal to prohibit
receiving fee-based consulting services from an AO at any time before
an initial accreditation survey or in the 12 months before a re-
accreditation survey would restrict the ability of many health systems
to receive necessary education and could delay their ability to be
accredited in a timely manner.
Response: We respectfully disagree with this commenter's contention
that our restrictions on AO consulting, as finalized, will prohibit
providers and suppliers that are seeking accreditation by an AO that
provides consulting from seeking consulting prior to the initial
survey. This is because these providers and suppliers would be
permitted to seek fee-based consulting from a third party at any time,
without restrictions. Also, any provider or supplier already accredited
by any AO can seek consulting services from another AO provided that AO
does not accredit the provider or supplier at the time the consulting
services are furnished.
Comment: One commenter noted that, under the proposal, providers
would not have the benefit of receiving education from the creator of
the standards who could best teach the requirements of compliance. The
AO standards include not only regulatory language but also AO-specific
requirements. Many organizations seek Medicare certification through an
AO versus the State Agency because of the valuable education that the
AO provides. The type of education provided often distinguishes one AO
from another. Restricting the provision of fee-based education
diminishes competition, and forces each AO to provide the exact same
product.
Response: General education provided by an AO would not necessarily
constitute a conflict of interest and is not entirely prohibited under
this rule, regardless of whether it is fee-based education. Section
488.8(i)(4) finalized here allows AOs to provide general education as
well as fee-based consulting services at specific times and under
certain conditions. However, any AO fee-based education that meets the
definition of fee-based consulting services finalized here and does not
meet the timing and condition requirements at Sec. 488.8(i)(4) would
be prohibited by this rule.
Comment: One commenter opposed the proposals that would limit the
ability of health systems to receive fee-based consulting services from
their AO for the following reasons:
[[Page 36386]]
<bullet> AOs are uniquely situated to provide consulting services
with firewalls in place that prevent conflicts of interest.
<bullet> Fee-based consulting services can include educating health
system staff on the CoPs and guiding them on how best to comply with
them.
<bullet> Fee-based consulting services play an important role in
assisting providers with their compliance with CoPs and their quality
and patient safety improvement efforts.
<bullet> Fee-based consulting can assist health systems in
improving the safety and quality of the care they provide to their
patients.
Response: In our view, the restriction on fee-based consulting will
not completely prohibit providers and suppliers accredited by the AOs
from obtaining fee-based consulting. These providers and suppliers will
only be restricted from receiving AO fee-based consulting from their AO
prior to their initial survey and during the 12 months immediately
preceding their reaccreditation survey. The accreditation period for
most providers and suppliers is 36 months; therefore, the providers and
suppliers would be able to receive AO fee-based consulting during the
first 24 months of the 36-month accreditation period. In addition,
providers and suppliers may seek fee-based consulting at any time from
third party consultants because there is no conflict of interest
associated with the fee-based consulting provided by third parties.
Comment: One commenter stated that if CMS' proposals are finalized,
overall survey costs will increase, due to factors such as limited
consulting resources or increased interruptions in hospital operations.
Response: We disagree that these requirements as finalized in this
rule will inevitably lead to increased overall survey costs due to the
factors the commenter noted. While the rule puts specific limitations
on an AO that provides consulting services to a facility that the AO
accredits, the rule does not prohibit an accredited facility from using
the consulting services provided by other AOs that do not accredit the
facility or by third-party consultants, and thus does not limit the
overall consulting services that might be available to facilities.
Without further clarification by the commenter, we are not clear why
they believe that this rule would cause interruptions in a hospital's
or other facility's operations.
Comment: One commenter supports the proposed definition of conflict
of interest.
Response: We thank this commenter for their support of our proposed
definition.
Comment: One commenter noted that proposed Sec.
488.5(a)(10)(iii)(I) would provide that an immediate family member of
an AO surveyor who was employed in a healthcare facility that was
accredited by the AO would be deemed a conflict of interest. This
commenter further observed that, by contrast, the United States (U.S.)
Federal government does not restrict immediate family members from
working in different facets of the government or as a contractor to the
government.
Response: This commenter is correct that the proposed regulations
would prohibit an AO owner, AO surveyor or other AO employee from
having any involvement in the survey process for the healthcare
facilities in which they, or their immediate family members, have a
relationship or interest that existed within 2 years prior to the AO
owner's, surveyor's or other employee's employment by the AO. If such a
situation were to exist, it would be a conflict of interest. We have
proposed to add the provisions at Sec. Sec. 488.5(a)(10)(iii)(I) and
488.8(k) to prevent such conflicts of interest, including those
involving immediate family members as defined at Sec. 488.8(k)(2),
from occurring. The commenters' reference to multiple family members
working for governmental entities is not comparable to the scenario in
which an AO surveyor might be expected to change his assessment to
benefit the facility family member because family members working for
different government agencies generally are not able to provide
benefits for each other.
Comment: One commenter disagreed with the proposed definition of
``immediate family member''. This commenter noted that this proposed
definition closely resembles that used in reference to the professional
courtesy exception for physician and healthcare entity referral
prohibitions, Securities and Exchange Commission restrictions on
transactions with related persons, and laws related to campaign
contributions.
This commenter stated that such an expansive definition of
``immediate family member'' as used for the purposes of securities
transactions and campaign contributions would be inappropriate for
application to healthcare conflict-of-interest considerations.
Response: We used the same definition of ``immediate family
member'' that we finalized for hospices in the CY 2022 Home Health
Prospective Payment System Rate Update (86 FR 62368 and 62426), which
is codified at Sec. 411.351. While this definition may be the same or
similar to other rules for other subject matter, this does not make it
inappropriate for use in a healthcare setting.
A definition of ``immediate family member'' is necessary because,
at Sec. 488.5(a)(10)(iii), we proposed to require the AOs to provide
policies and procedures for the prevention and handling potential or
actual conflicts of interest that could arise from situations in which
an AO owner, surveyor, or other employee has a business, employment or
financial interest in or relationship with another survey agency or
healthcare facility to which the AO provides accreditation services.
At proposed Sec. 488.5(a)(10)(iii), we stated that such interests
or relationships would include but not be limited to, ``(I) Having
members of their immediate family engaged in any of the above stated
activities.'' Moreover, at Sec. 488.8(k), we proposed that it would be
a conflict of interest if AO employees, surveyors, and other employees
have a member of their immediate family employed at a healthcare
facility that is accredited by the AO. We made this proposal because it
is possible that one of the subject individuals could either
consciously or unconsciously exploit their interest in or relationship
with that provider or supplier. Also, allowing an AO owner, surveyor or
other employee that has an interest in or relationship with or that has
an immediate family member that is employed by or has an interest in or
relationship with (as defined by proposed Sec. 488.5(a)(10)(iii)) a
healthcare facility that is accredited by the AO would not only be
inappropriate but could result in inaccurate survey results and/or
preferential treatment of the facility. We say this because if an AO
owner, surveyor or other employee has a family member employed at a
healthcare facility that is accredited by the AO, that AO owner,
surveyor or other employee may have a bias towards or against that
facility which could have an effect on the survey results.
An AO surveyor, owner, or other employee that has an interest in or
relationship with a healthcare facility the AO accredits might have
additional motivation to improperly give that healthcare facility
notice about the survey ahead of the scheduled survey date. Surveys are
required to be unannounced to prevent the facility from preparing for
the survey by activities such as unusual cleaning activities, painting,
clearing obstructions from halls and entrances,
[[Page 36387]]
covering up and hiding deficiencies, coaching staff, and otherwise
preparing in advance for the survey. If the survey is unannounced, the
healthcare facility is not able to make advance preparations so that
the survey team is able to assess the facility in its usual condition
and observe the typical standard of care provided.
If an AO owner, surveyor or other employee has an immediate family
member that is employed by a healthcare facility that is accredited by
the AO, that immediate family member might provide confidential or
proprietary information about the healthcare facility to the AO owner,
surveyor or other employee that the AO would not otherwise be entitled
to receive. The immediate family member employed at a healthcare
facility accredited by the AO could also provide information about
incidents that have occurred at the facility, safety and quality
concerns or other issues. This would be a problem because this
unfiltered information may be damaging to the facility for several
reasons. First, this person may have incomplete or inaccurate
information. Second, the information provided by the family member
could affect the course of the survey, the survey findings and
objectivity of the survey results.
Comment: One commenter stated a concern that the conflict of
interest on the part of some extended family members included in the
definition of ``immediate family member'' are unlikely to be known in
many instances.
This commenter was concerned that, while a potential conflict could
exist if conflicts with immediate family members are known to the AO,
there is no requirement within this proposed rule that the information
actually be known for a conflict to exist because the proposed rule (89
FR 12005) says ``unknowingly exploited interest''.
To illustrate their concern, the commenter provided the following
scenario:
<bullet> An AO surveyor resides in Washington and has a brother-in-
law that resides in Georgia.
<bullet> The surveyor only speaks to her brother-in-law every other
year at Thanksgiving.
<bullet> The AO at which the surveyor is employed accredits a small
ASC in Tennessee (fictional ``Anytown ASC'').
<bullet> The AO surveyor performs a survey of Anytown ASC in
Tennessee in May 2024.
<bullet> The surveyor's brother-in-law has an ownership interest in
Anytown ASC in Tennessee that his sister-in-law is surveying. This
interest was obtained in January 2023.
<bullet> The AO surveyor was not aware that her brother-in-law
obtained an ownership interest in Anytown ASC in January 2023.
This commenter requested that CMS reconsider the definition of
``immediate family member'' to address its appropriateness,
reasonableness, and applicability.
Response: We have proposed to require AOs provide annual surveyor
declarations of conflicts of interest and also that AO owners,
surveyors, and other employees be prohibited from having involvement in
the survey process for any healthcare facility accredited by the AO
with which they or their immediate family members have an interest or
relationship. While these proposals are silent on this issue, it is
implied that the AOs will only be required to report and act on known
conflicts of interest. We certainly cannot hold AOs, their owners,
surveyors, and other employees accountable for any conflicts of
interest of which they are unaware. Therefore, we do not believe that
it is necessary to revise the proposed definition of ``immediate family
member.''
This does not mean that the AOs, their owners, surveyors, and other
employees can ignore such potential conflicts of interest. AOs, owners,
surveyors, and other employees have a duty to investigate whether they
or their immediate family members, as defined in the proposed rule at
Sec. 488.5(a)(10)(iii), might have applicable conflicts of interest.
AOs will be required to obtain surveyor conflict-of-interest
information on an annual basis. AO surveyors and other employees will
be required to take reasonable steps to determine whether they have
interests in or relationships with healthcare facilities accredited by
the AO, both on their part and on the part of their immediate family
members.
If an AO, AO owner, surveyor, and other employee should reasonably
have known about a conflict of interest on their part or the part of an
immediate family member and it is not reported to CMS on a surveyor
declaration, or an AO owner, surveyor, or other employee was permitted
to have involvement with the survey process for a healthcare facility
for which they reasonably should have known they had an interest in or
relationship with, CMS has the option to place the AO on a CMS-approved
accreditation program review pursuant to Sec. 488.8(c).
Comment: One commenter requested that CMS clarify the applicability
of the proposed requirement for information to be submitted with the
AOs' conflict-of-interest policies and procedures to different types of
AO employees.
Response: Our proposal for information to be submitted with the
AOs' conflict-of-interest policies and procedures applies to the AO and
not any specific individual or group of AO employees. This proposal
requires that the AO provide more specific information with the
conflict-of-interest policies and procedure it provides to CMS with the
initial and all subsequent renewal applications for CMS approval of the
AOs accreditation programs.
However, Sec. 488.5(a)(10)(iii) does require an AO to submit
information to CMS regarding its policies and procedures for the
prevention and handling of potential or actual conflicts of interest
and it does specify that these conflicts of interest are those that
could arise from situations in which an accrediting organization owner,
surveyor, or other employee has an interest in or relationship with a
SA or with a healthcare facility to which the accrediting organization
provides accreditation services. In response to the commenter's request
for clarity as to whom the requirements for such information would
apply, Sec. 488.5(a)(10)(iii) provides examples of the interest and
relationships with a healthcare facility that would be a conflict of
interest on the part of an AO owner, surveyor or other employees,
including:
<bullet> being employed as a SA surveyor;
<bullet> being employed in a healthcare facility that is accredited
by the AO;
<bullet> having an ownership, financial or investment interest in a
healthcare facility that is accredited by the AO;
<bullet> serving as a director of or trustee for a healthcare
facility that is accredited by the AO;
<bullet> serving on a utilization review committee of a healthcare
facility that is accredited by the AO;
<bullet> accepting fees or payments from a health facility or group
of health facilities that is/are accredited by the AO;
<bullet> accepting fees for personal services, contract services,
referral services, or for furnishing supplies to a healthcare facility
that is accredited by the AO;
<bullet> providing consulting services to a healthcare facility
that the AO accredits;
<bullet> having members of their immediate family engaged in any of
the stated activities; and
<bullet> engaging in any activities during the course of the survey
of the facility that would be or cause a conflict of interest.
Section 488.8(k) provides that it would also be a conflict of
interest if an AO owner, surveyor or other employee
[[Page 36388]]
has an immediate family member that has an interest in or relationship
with a healthcare facility accredited by the AO. In such a scenario,
the AO owner, surveyor, or other employee should not be permitted to
have any involvement with the survey process for the healthcare
facility at which their family member is employed or has an interest or
relationship.
2. Comments Generally Supporting the Proposal for Information To Be
Submitted With an AO's Conflict-of-Interest Policies and Procedures
Comment: Five commenters supported the proposed requirement that
the AOs provide, as a part of their initial and renewal application,
specific policies and procedures that would address how the AO
addresses and prevents conflicts of interest. One commenter stated that
proposed revision to Sec. 488.5(a)(10) for information to be submitted
with the AOs' conflict-of-interest policies and procedures are common
sense updates on unintended gaps in the accreditation ecosystem. This
commenter further stated that if these unintended gaps are not fixed,
opportunities for conflicts of interest will persist in the system. One
commenter stated that the requirement that the AOs provide, as part of
their initial and renewal applications, specific policies and
procedures that would address how the AOs prevent and address conflicts
of interest would put pressure on AOs to create firewalls to address
these concerns. One commenter expressed support for the proposed
requirements for AOs that do not have policies and procedures to
prevent, address and handle conflicts of interest to develop and use
them. One commenter expressed support for the proposal for expansion
and revision of conflict-of-interest policies and procedures. This
commenter stated that these AO conflict-of-interest improvements would
secure the overall fairness and transparency of the survey process. One
commenter supported CMS' efforts to increase oversight of AO conflicts
of interest while providing a requirement that does not impose
additional burden on providers. One commenter stated that Sec.
488.5(a)(10) is already a requirement for approval of an AO. This
commenter further opined that the proposed requirement could strengthen
our policies to reflect the high standards of their AO. One commenter
fully supported our proposal to require the AOs to provide more
specific information in the conflict-of-interest policies and
procedures they submit to CMS. This commenter stated that the
requirement will protect the integrity of the survey process and
provide guidance to surveyors.
Response: We thank these commenters for their support of our
proposal at Sec. 488.5(a)(10) to require the AOs to submit more
specific information with their conflict-of-interest policies. Robust
and strictly enforced firewall policies and procedures can help
mitigate the effects of conflicts of interests. We believe that it is
important for the AOs that provide fee-based consulting to have fee-
based consulting firewall policies and procedures. We thank these
commenters for their support of our proposed requirement at Sec.
488.5(a)(10) that the AOs submit policy and procedure to address
conflicts of interest.
3. Comments Generally Opposing the Proposal for Information To Be
Submitted With an AO's Conflict-of-Interest Policies and Procedures
Comment: One commenter stated that requiring AOs to turn over their
conflict-of-interest policies and logs over to CMS would require the
AOs to share proprietary information and internal business operations.
Response: We respectfully disagree with this commenter. We are not
sure what this commenter considers to be proprietary information and
internal business operations. However, we do not consider the AOs
conflict-of-interest policies and procedures or information about AO
conflicts of interest to be proprietary information. AOs are already
required by our regulations to provide their accreditation standards
and all policies and procedures related to the accreditation and survey
processes (including those related to detecting and handling conflicts
of interest) to CMS as part of their initial and renewal applications
they submit seeking approval for their accreditation program. For
example, Sec. 488.5(a)(10) already requires AOs to provide their
``policies and procedures to avoid conflicts of interest, including the
appearance of conflicts of interest, involving individuals who conduct
surveys or participate in accreditation decisions.''
Although we do not believe that the surveyor declarations and
reports containing information about the fee-based consulting services
provided would fall under the category of proprietary information or
internal business operations, we have no plans to publish this
information. It is our intent, to the extent permissible by law, that
the information collected be for internal CMS use only.
Comment: One commenter requested clarification on how the revised
requirements at Sec. 488.5(a)(10), if finalized, will be different
from the existing requirement of this regulation.
Response: In the proposed rule (89 FR 12005), we discussed the
difference between the existing regulation and the revised requirements
at Sec. 488.5(a)(10). Section 488.5(a)(10) currently requires that the
AO submit ``the organization's policies and procedures to avoid
conflicts of interest, including the appearance of conflicts of
interest, involving individuals who conduct surveys or participate in
decisions.'' This requirement does not require the AO to address any
specific areas or issues in their conflict-of-interest policies and
procedures. In addition, the AOs only need to submit this information
to CMS with their initial and renewal applications, which is currently
every 6 years or less, as established by CMS.
Comment: One commenter recommended that CMS ensure that the new
policies the AOs will need to develop do not unintentionally result in
disruptions to providers seeking to become accredited or maintain
accreditation.
Response: We do not anticipate that the accreditation process will
be disrupted by the revised requirements at Sec. 488.5(a)(10)(i) to
Sec. 488.5(a)(10)(v). All AOs that accredit Medicare-certified
providers and suppliers will be required to submit conflict-of-interest
policies and procedures that comply with the requirements of proposed
Sec. 488.5(a)(10)(i) to (v). To be approved by CMS, all AOs are
required to have some type of conflict-of-interest policies and
procedures; however, prior to this proposed rule CMS did not have any
minimum requirements for the contents of these COI policies. This means
that the AOs will simply need to update their existing COI policies and
procedures to comply with the new requirements.
Final Decision: After consideration of all comments received
regarding the proposed requirement for AOs to submit specific
information with the conflict-of-interest policies and procedures they
submit to CMS with their initial and each subsequent renewal
application, we have decided to finalize the requirements with a minor
clarifying revision to Sec. 488.5(a)(10)(iii) to change the proposed
language of ``... potential or actual conflicts of interest that could
arise from situations in which an accrediting organization owner,
surveyor, or other employee has an interest in or relationship with
another State survey agency or a healthcare facility to which the
accrediting organization provides accreditation
[[Page 36389]]
services'' [emphasis added] by changing the word ``another'' to ``a''
and adding the words ``with a'' so that the finalized provision reads
``... situations in which an accrediting organization owner, surveyor,
or other employee has an interest in or relationship with a State
survey agency or with a healthcare facility to which the accrediting
organization provides accreditation services'' [emphasis added]. We are
making this revision in this final rule with comment period to clarify
the requirement.
Additionally, commenters requested that we establish a clear
definition of the AO consulting services on which we will be placing
the proposed restrictions and provided us with an example of such a
definition for purposes of this rule. We have used this definition from
the public comments as the basis for the definition of ``fee-based
consulting services'' that we are including in this final rule with
comment period. We discuss this definition in more detail in section
III.D.3. of this final rule with comment period.
E. Comments on the Proposed Requirement That AOs Obtain and Submit
Surveyor Declarations of Any Interest in and Relationships With
Healthcare Providers the AO Accredits to CMS on an Annual Basis
(Proposed Sec. 488.5(a)(22))
A conflict of interest may exist when an AO surveyor has
interest(s) in or relationship(s) with a healthcare facility the AO
accredits. We believe that requiring AOs to obtain and submit
declarations detailing such interests and relationships would ensure
that CMS would be notified of potential or actual conflicts of interest
AO surveyors might have with the providers and suppliers the AO
accredits. Such notice would allow CMS to be aware of the existence of
these potential or actual conflicts of interest, some of which would
preclude a surveyor from participating in survey activities (see Sec.
488.8(j) discussion at section IV.B.6. of the proposed rule) and some
of which would not.
We proposed to add a new provision at Sec. 488.5(a)(22) that would
require the AO to obtain declarations from all surveyors employed or
contracted to the AO regarding any employment, business, financial or
other interests in or relationships they have with the healthcare
facilities the AO accredits. We proposed that AOs would initially be
required to submit the surveyor declarations with their initial
application for CMS approval of their accreditation programs. We
further proposed to require that the AOs update the surveyor
declarations on an annual basis, and that the information from the
annual updated surveyor declarations be submitted to CMS no later than
December 31st each year. Annual updates would be necessary because a
surveyor's interests in and relationships with healthcare facilities
the AO accredits could change over time. This requirement would ensure
that the information contained in the surveyor declarations remains up-
to-date and accurate. We proposed that this provision at paragraph
(a)(22) would be become applicable beginning 1 year after the effective
date of the final rule with comment period. We further proposed to
require the AOs to begin submitting their surveyor declaration
information on or before the December 31st date that occurs after the
proposed applicable date of this requirement.
We received the following comments regarding this proposal. We
group the comments and our responses by topics for clarity.
a. General Comments About the Proposal To Require AOs To Submit
Surveyor Conflict-of-Interest Declarations
Comment: One commenter supported our proposal to require AOs to
obtain and submit surveyor declarations of any interest in and
relationships with healthcare providers the AO accredits to CMS on an
annual basis for the following reasons:
<bullet> Organizations entrusted with the public's well-being must
disclose their affiliations to ensure impartiality and maintain public
trust.
<bullet> Any suggestion of impropriety or conflict of interest
could compromise the integrity of the accreditation process,
emphasizing the paramount importance of full transparency.
<bullet> Prioritizing excellence, quality, and integrity over
financial interests is crucial.
Response: We thank this commenter for their support of this
proposal.
Comment: One commenter stated that they have always required the
completion of conflict-of-interest statements from all their staff as a
standard compliance practice. The commenter further stated that they
are diligent in managing and enforcing their conflict-of-interest
processes as a first-line measure in controlling any threat to their
accreditation program's integrity. Another commenter stated that they
require the completion of a conflict-of-interest statement in the
following instances:
<bullet> All staff complete a COI statement at the time of hire;
senior leadership staff additionally sign a COI statement annually.
<bullet> Board of Director members sign a COI statement at the time
of board appointment and annually throughout their term.
<bullet> Surveyors sign a COI statement at the time of hire,
annually, and if new conflicts of interest arise.
Response: We thank this commenter for their comment. We further
commend this commenter on their commitment to preventing, detecting,
and managing conflicts of interest.
b. Comments in Support of the Proposal for AOs To Submit Surveyor
Conflict-of-Interest Declarations
Comment: Two commenters supported our proposal to establish
processes for ensuring that AO surveyors do not have conflicts of
interest in the review process, including surveyor relationships with a
healthcare facility or another survey agency.
Response: We thank these commenters for their support of this
proposal.
Comment: One commenter stated that they already have a strict
surveyor conflict-of-interest process. The commenter further stated
that requiring a declaration from each surveyor is unnecessarily
burdensome to their established process.
Response: We thank this commenter for their comment and note their
concern about the burden related to this proposal. Please see section
VI. Collection of Information of this final rule with comment period
for more information about the burden associated with this rule.
Comment: One commenter supported our proposal to require the AOs to
provide conflict-of-interest information on past employees and other
areas.
Response: We believe this commenter is referring to our proposal to
require the AOs to collect surveyor conflict-of-interest declarations
and submit them to CMS on an annual basis. If so, we thank this
commenter for their support of this proposal. We would like to point
out that this requirement, as finalized, doesn't require the AOs to
collect conflict-of-interest information about past employees or areas
other than current interests in or relationships the AO's surveyors may
have in any healthcare providers or suppliers accredited by the AO.
Comment: One commenter had several questions about this proposal
including:
How are new hires and terminated surveyor declarations to be
handled throughout the year? Are the submissions to be electronic? What
does CMS intend to do with this information? For instance, would CMS
review each
[[Page 36390]]
one of the declarations annually and would declarations of ``no
conflict of interest'' be confirmed? If so, how would this be
accomplished?
Response: We will provide subregulatory guidance on submission and
compliance when this requirement becomes effective.
Comment: One commenter stated that they require all employees to
complete annual COI declarations regarding any employment, business,
financial, or other interests in or relations they have with healthcare
facilities that this AO accredits. The AO expressed concerns with the
proposal to require AOs to submit surveyor COI declarations to CMS
because these declarations have personal information that may violate
employee confidentiality or other privacy laws if shared publicly. This
commenter recommended that CMS modify this proposal to require only a
review of AO surveyors' COI declarations at the time of the CMS
corporate onsite review for each AO. This commenter stated that their
suggested alternative would still allow CMS to achieve its stated goal
and that there was no reason for CMS to require AOs to unnecessarily
disclose sensitive information. This commenter also stated that the AO
should not be required to submit the surveyor conflict-of-interest
disclosures to CMS because they would contain sensitive information.
Response: Our rule, as finalized, will require the AO to submit
declarations from all surveyors the AO employs, describing any
employment, business, financial or other interests in or relationships
they have with the healthcare facilities the AO accredits. Even if this
is sensitive or confidential information, it is necessary for
enforcement of our policy and, to the extent permitted by law, we would
keep this information internally and not publish it or provide it to
any outside source. Proprietary commercial information and trade
secrets are protected from public disclosure under FOIA Exception 4 (5
U.S.C. 552(b)(4)).
e. Recommended Changes to Proposal That AOs Submit Surveyor
Declarations
Comment: One commenter recommended that CMS modify this proposal to
allow the AOs to submit 100 percent of surveyor COI declarations for
year one after the final rule with comment period implementation date.
Thereafter, for each calendar year, AOs would only submit COI
declarations for new surveyors and updated COI declarations for
surveyors where a baseline COI declaration was submitted in year one.
Another commenter suggested that implementing and managing a COI
declaration process might complicate the survey process and increase
the administrative burden on AOs and complicate the survey process by
requiring additional resources. This commenter recommended that CMS
make the implementation of the surveyor declaration process as
minimally burdensome as possible on all entities.
Several commenters expressed support for the proposed requirement
for collection of surveyor declarations on an annual basis but
requested that AOs be allowed to keep the declarations and not be
required to submit them to CMS. One of these commenters suggested that
CMS review them during the corporate office visit as part of each AO's
initial/renewal application rather than requiring the AO to submit them
to CMS on an annual basis.
Response: After consideration of the comments received regarding
our proposal to require the AOs to submit surveyor conflict-of-interest
declarations to CMS on an annual basis, we have decided not to finalize
this proposal as proposed. We are not finalizing our proposal to
require the AOs to obtain and submit the surveyor declarations to CMS
annually. We will instead require the AOs to submit the surveyor
conflict-of-interest declarations for CMS to review upon request and
during each application review process.
Comment: One commenter stated that receiving and maintaining the
declarations could be unnecessarily burdensome to CMS. This commenter
requested that the surveyor declarations be handled on an exceptions
basis whereby the declaration would only need to be reported to CMS if
it indicated a conflict of interest. In the alternative, CMS could
conduct audits of the AOs annually to ensure the declarations are
obtained and maintained as required.
Response: We have also considered the burden to CMS associated with
the receipt and review of these declarations and have decided to modify
our proposal related to surveyor declarations as stated in the ``Final
Decision'' section.
Final Decision: After consideration of the comments received
regarding our proposal at Sec. 488.5(a)(22) to require the AOs to
submit surveyor conflict-of-interest declarations to CMS on an annual
basis, we have decided not to finalize this as proposed. We will
instead require the AOs to maintain the surveyor conflict-of-interest
declarations, to be provided to CMS to review upon request and during
each application review process. We are also modifying the provision as
proposed by removing the sentence from applicable regulations text,
``This provision will become applicable beginning [DATE 1 YEAR AFTER
THE EFFECTIVE DATE OF THE FINAL RULE].'' We are making this
modification for the final rule with comment period since we have
decided that all provisions of the rule will become effective 1 (one)
year after the publication date and individual provisions will no
longer need to be specified in the regulatory text.
F. Proposed Restrictions on Fee-Based Consulting Services Provided by
AOs to the Medicare-Certified Providers and Suppliers They Accredit
(Proposed Sec. 488.8(i))
CMS recognizes the value of consulting services provided by
independent, third-party consultants who provide insight and expertise
to assist facilities in achieving and maintaining compliance with the
AO and Medicare health and safety standards. These interventions are
beneficial and often tailored to meet a facility's specific compliance
needs. Consulting services also may assist a provider or supplier in
identifying quality concerns, whether based on the Medicare
requirements or standards of practice, and therefore these services may
improve the safety of patient care. AO consulting activities are not
prohibited by Federal law and there are no current CMS regulations
prohibiting AOs from providing consulting services.
However, AOs assume a public trust role when voluntarily applying
to CMS for deeming authority. This authority, once granted, conveys
Medicare certification for those entities accredited by the AO and it
is essential that the integrity of the AO oversight process be above
question. A number of AOs with CMS-approved accreditation programs
currently provide AO consulting services to the Medicare-participating
healthcare facilities they accredit as well as to facilities that they
do not accredit. When an AO provides consulting services to a provider
or supplier it accredits, it may create a conflict of interest for
several reasons.
First, AOs provide deeming surveys to providers or suppliers on
behalf of CMS. AOs are required to use accreditation standards that are
comparable to or exceed the Medicare standards and survey processes in
the performance of deeming surveys. A potential or actual conflict of
interest arises from allowing a CMS-approved AO with deeming authority
the ability to charge a provider or supplier to conduct a deeming
survey to identify non-compliance (for
[[Page 36391]]
Medicare participation) and also charge for providing AO consulting
services to help the provider meet Medicare requirements.
Second, providers and suppliers often choose AO consulting
specifically for the additional resources and assistance provided. Some
AOs publicly advertise the ability of their consulting services to
simulate what to expect from the actual AO survey. It is possible that
providers and suppliers found to be non-compliant by their AO may
assume that the most direct path to compliance is to hire the AO's
consulting services. Such an assumption would provide AOs with
consulting services an unfair advantage over other, third-party
consulting services.
Finally, by charging for accreditation services (for example,
deeming surveys) and also for the subsequent consulting services, for
the purpose of remediating deficiencies identified by the same AO,
there may be an expectation from providers and suppliers that the AO
would demonstrate the effectiveness of their consulting services for
such deficiencies on subsequent compliance surveys. In other words, the
provider or supplier may expect to receive a favorable survey report
because they have paid the AO not only for accreditation but also for
consulting services which are promoted by the AOs to help the provider
or supplier do well on their survey. In addition, this expectation may
push AOs to ignore significant deficiencies found during survey of its
consulting clients to demonstrate the efficacy of its consulting and to
promote these services.
In short, an AO's business model is geared toward retention of its
accredited providers and suppliers. AOs that provide both regulatory
oversight through Medicare deeming surveys and also consulting
services, which are geared towards assisting clients comply with the
requirements required to pass the surveys, invite concerns about the
integrity of their final compliance determinations.
CMS issued an AO Conflict-of-Interest RFI (83 FR 65331) in 2018 to
gather feedback related to AO conflict-of-interest practices. We
received 128 public comments in response to the RFI. Many commenters
stated that consulting provided by an AO or its associated consulting
division or company to the healthcare facilities it accredits is a
conflict of interest. These commenters stated that this conflict of
interest arises from granting the inherently governmental function of
monitoring patient safety, by regulating healthcare providers through
accreditation, to a private entity, especially when that private entity
profits from those who are regulated.
Several commenters alleged that AOs that provide fee-based
consulting may have the incentive to ignore deficiencies detected
during the accreditation survey, to provide a ``good'' survey report to
demonstrate the apparent efficacy of their AO consulting services and
also to keep the paying customer(s) happy. Many commenters also
suggested that if an AO provides poor survey results to a healthcare
facility that has paid a significant fee for accreditation, it is
unlikely that the facility would continue to retain that AO as a
service provider.
After careful review and analysis of the public comments received
in response to the RFI, we agree that a conflict of interest arises
from the contractual and financial relationship between the healthcare
provider and the AO, which is a private entity that profits from the
performance of regulating healthcare providers through accreditation.
AOs that provide consulting services generate additional revenue beyond
the fees realized for accreditation services by providing consulting
services to the same facilities they accredit.
We proposed at Sec. 488.8(i) several restrictions on fee-based
consulting provided by these AOs, their consulting divisions, or
separate business entities. By ``fee-based consulting division,'' we
mean a separate division within the AO that provides consulting
services. This division of the AO would have a separate manager and
staff. By ``separate business entity,'' we mean a business entity, such
as a company or corporation, that is separate and apart from the AO and
that has been established by the AO, either under a similar or
different name, for the purpose of the providing consulting services.
The proposed regulation at Sec. 488.5(i) would still allow AOs to
provide fee-based consulting services to the providers and suppliers
they accredit with restrictions that address the conflict-of-interest
issues associated with this service.
We proposed at Sec. 488.8(i)(1) that, unless excepted under
proposed Sec. 488.8(i)(4), AOs and their associated consulting
divisions or companies would be prohibited from providing fee-based
consulting services to any healthcare provider or supplier to which the
AO provides accreditation services prior to an initial accreditation
survey. However, the healthcare provider or supplier may seek fee-based
consulting services from an entity entirely uninvolved in that
provider's or supplier's accreditation process. This option allows
these providers and suppliers support they may believe necessary to
meet Medicare standards and requirements prior to serving patients
while eliminating any conflict of interest for their AO.
For purposes of proposed Sec. 488.8(i)(1), the term ``initial
survey'' would mean the first accreditation survey of a healthcare
provider or supplier performed by an AO. The term ``prior to the
initial accreditation survey'' would mean the time period beginning on
the day the provider or supplier enters into a contract with the AO to
provide accreditation services and continuing until the date that the
initial accreditation survey is completed. The survey completion date
would include the completion of any required plans of correction by the
provider or supplier. In addition, if a healthcare provider or supplier
was terminated or withdrew from the AO's accreditation and later
retained the services of that AO, the first survey of the returning
healthcare provider or supplier performed by the AO would be considered
an initial accreditation survey.
The requirement of proposed Sec. 488.8(i)(1), which would prohibit
an AO from providing fee-based consulting or coaching to a healthcare
provider or supplier prior to the initial accreditation survey, would
provide a more accurate assessment of the provider's or supplier's
baseline operating conditions and deficiencies on the initial survey.
Such a raw assessment would not be possible if the provider or supplier
receives AO consulting prior to the initial accreditation survey.
In addition, such a baseline assessment of deficiencies would be
useful to the AO in assessing areas needing improvement and developing
a plan of correction and areas of focus for its consulting services.
This restriction would also remove the financial incentive on the part
of the AO to ignore deficiencies during the initial survey of providers
and suppliers that paid for consulting services prior to an initial
survey.
We note that this proposal only restricts an AO with deeming
authority and a consulting practice from providing consulting services
to its accredited providers and suppliers prior to the initial
accreditation survey. It does not prohibit providers and suppliers from
hiring third-party consulting services prior to their initial AO
survey-- in other words, this proposal does not prohibit other
[[Page 36392]]
consulting services from being used during this period.
We do not anticipate that this proposal would cause a negative
impact on the patient care provided by the provider or supplier for
several reasons. First, providers or suppliers would be able to obtain
AO consulting during the first 24 months of the 36-month
reaccreditation cycle which occurs after the initial survey. This
education could be tailored to address the deficiencies found during
the initial survey. Second, the provider and supplier could always seek
consulting services and education prior to the initial survey from a
third-party consultant or an AO other than the one that is doing their
survey. The purpose of our proposal to prohibit AO fee-based consulting
prior to the initial survey and during the 12-month period prior to
each reaccreditation survey was to reduce or remove any potential or
actual conflict of interest. However, if a provider or supplier were to
seek consulting from a third-party consultant that has no relationship
to the AO that accredits that provider or supplier, no conflict of
interest would exist.
We also proposed at Sec. 488.8(i)(2) to prohibit AOs from
providing fee-based consulting services to a healthcare provider or
supplier it accredits within 12 months prior to the next scheduled re-
accreditation survey of that provider or supplier. For purposes of
proposed Sec. 488.8(i)(2), the term ``re-accreditation survey'' would
mean any subsequent accreditation surveys performed by the AO after the
initial survey.
The accreditation cycle for most Medicare-certified providers and
suppliers is 36 months (3 years), which means that the AOs perform an
accreditation survey of these providers and suppliers no less than
every 36 months. The proposed language at Sec. 488.8(i)(2) would allow
AOs to provide fee-based consulting during the first 24 months (2
years) of the accreditation cycle, but not during the 12-month (1-year)
period preceding the re-accreditation survey. For example, with this
proposal, if the initial survey was completed on June 1, 2025, the
provider's or supplier's reaccreditation survey would be due by June 2,
2028. The AO could provide consulting to the provider or supplier from
June 2, 2025, to June 2, 2027. The AO would be prohibited from
providing AO consulting to the provider or supplier from June 2, 2027,
to June 2, 2028. An accredited provider or supplier would retain the
ability to use consultants, including other AOs, not affiliated with
their AO at any time, including any timeframe prior to or after an
accreditation survey for Medicare compliance.
The proposed requirement would provide the accredited provider or
supplier ample time, prior to their next accreditation survey, to
obtain the education they need to understand the CMS requirements and
the AO's accreditation standards and survey process, to implement the
AO's accreditation standards and CMS standards in their facility, and
to rectify any deficiencies found during the initial survey.
The proposed requirement at Sec. 488.8(i)(2) would address the
actual or potential conflicts of interest associated with AO fee-based
consulting because it creates a 1-year time period prior to the re-
accreditation survey in which the AO is prohibited from providing any
type of additional teaching or ``coaching'' that would help the
provider or supplier ``pass'' or obtain better scores on the upcoming
accreditation survey.
We further proposed at Sec. 488.8(i)(3) that the AOs or their
associated consulting divisions or companies be prohibited from
providing fee-based consulting services to a healthcare provider or
supplier in response to a complaint received by the AO regarding that
provider or supplier. Our rationale for this requirement is that AOs
are required by CMS regulation to investigate and resolve complaints
received regarding their accredited providers and suppliers (that is,
42 CFR 488.5(a)(4)(ix); 42 CFR 488.5(a)(12)). This regulatory
requirement includes investigating the complaint and working with the
accredited provider or supplier to help them resolve any deficient
practices identified in the complaint. AOs charge significant fees for
their consulting services. AOs should not profit by providing
consulting to a provider and supplier in response to a complaint that
they are regulatorily required to investigate and resolve. This
proposed regulation would prevent this from occurring.
We proposed at Sec. 488.8(i)(4)(i) to (iv) that the restrictions
upon AO fee-based consulting would not apply to the following
situations: (1) AO fee-based consulting services provided during the
24-month period after the date the initial or re-accreditation survey
is performed (proposed Sec. 488.8(i)(4)(i)); (2) AO fee-based
consulting services provided to address complaints received and
investigated by the SA regarding an AO's accredited provider or
supplier in which one or more condition-level or immediate jeopardy
deficiencies are identified, provided that the fee-based consulting
must occur after the SA complaint investigation and survey has been
completed and must only address those issues identified by the
complaint survey (proposed Sec. 488.8(i)(4)(ii)); (3) AO fee-based
consulting services provided to healthcare providers or suppliers the
AO does not accredit at the time the consulting services are furnished
(proposed Sec. 488.8(i)(4)(iii)); and (4) consulting or general
education provided by the AO about their accreditation program
(proposed Sec. 488.8(i)(4)(iv)).
Proposed Sec. 488.8(i)(4)(ii) would allow AOs to provide AO fee-
based consulting services in response to complaints received by the SA
regarding an AO's accredited provider or supplier. However, this
consulting must be provided by the AO after completion of the SA
investigation and complaint survey. We would permit AO consulting
services after a complaint is received by the SA, because the SA, not
the AO, would perform an investigational survey. Therefore, the
affected provider or supplier should be permitted to seek consulting
from its AO, in accordance with the restrictions stated, to address the
issues identified in the SA complaint and complaint survey, if
appropriate.
It is important to note that AO consulting should only be provided
when serious deficiencies have been identified in the SA's complaint
investigation report. By serious deficiencies, we mean deficiencies
that would be considered condition-level by the SA and the AO. However,
the AO should first work directly with the provider or supplier, as
part of their accreditation services package, to resolve the issues
identified in the SA's complaint investigation report and only provide
separate AO consulting services if these issues cannot be resolved
successfully through other methods. It has always been the duty of the
AOs to address and resolve complaints received regarding its accredited
providers and suppliers, whether said complaint is received by the AO
or the SA. An AO receives a significant fee for the accreditation
services provided. We believe that the investigation and resolution of
complaints falls squarely under these paid accreditation services. We
do not believe it appropriate for AOs to offer fee-based consulting/
educational services in response to each and every complaint received
regarding one of its accredited providers or suppliers. In other words,
an AO should not realize additional profit from its paying customers,
when it has already been paid to perform the task at hand.
Proposed Sec. 488.8(i)(4)(ii) would prohibit AO fee-based
consulting until after completion of the SA's
[[Page 36393]]
investigation and complaint survey. By ``completion of the SA's
investigation,'' we mean the date upon which the SA has completed all
work required to investigate the complaint and has issued its findings.
This restriction is necessary because if the affected provider or
supplier were to receive consulting from the AO prior to the completion
of the SA's investigation and complaint survey, the affected provider
or supplier potentially could alter processes, operations, or
documentation, all of which could compromise the SA's investigation of
the complaint. In such a scenario, the investigation and complaint
survey report would not be an accurate reflection of the issues
identified in the complaint. While it may seem counter-productive for
the affected provider or supplier to obtain AO consulting after
completion of the SA's investigation and complaint survey, we believe
that it would be helpful to the affected provider or supplier. After
completion of the SA's complaint survey and investigation, the affected
provider or supplier would receive a complaint investigation report,
which would allow the AO to tailor the consulting services or other
educational activities to address any deficiencies identified in said
report. Also, through AO consulting services, the AO could work with
the affected provider or supplier at their own pace to implement long-
lasting and sustainable changes that address the deficiencies
identified, as opposed to the implementation of quick temporary
solutions or corrective action prior to completion of the complaint
investigation. A quick temporary solution would be one that the
provider or supplier implements on a short-term basis, typically only
during the time that the surveyors are present. By contrast, a long-
lasting and sustainable solution would be one in which the provider or
supplier implemented the solution, oriented the staff to its
requirements, regularly monitored for compliance with the requirements,
and corrected non-compliance on a continual basis.
Proposed Sec. 488.8(i)(4)(iii) would further allow AOs to provide
fee-based consulting services to healthcare providers or suppliers the
AO did not accredit at the time the consulting services were furnished.
If the AO had not provided accreditation services to a provider or
supplier at the time consulting services were provided, the AO would
not have a preexisting financial relationship with that provider or
supplier. Thus, no conflict of interest would exist.
Proposed Sec. 488.8(i)(5) would require AOs to report information
about the fee-based consulting provided to the providers and suppliers
they accredit to CMS. Proposed Sec. 488.8(i)(6) would provide for
actions against AOs that provide fee-based consulting in violation of
the restrictions set forth in proposed Sec. 488.8(i)(1) to Sec.
488.8(i)(3). We proposed at Sec. 488.8(i)(6)(i) that if an AO was
found to be in violation of the restrictions set forth in paragraphs
Sec. Sec. 488.8(i)(1), (2) and (3), CMS could initiate actions against
the AO. These remedies would be set forth in proposed Sec.
488.8(i)(6)(i) and (ii) and would include placing the AO on a program
review, and involuntary termination of the CMS-approved AO's
accreditation program(s).
Whether or not we would impose the remedies proposed in Sec. Sec.
488.8(i)(6)(i) and (ii) would depend on the severity of the violation
and the facts and circumstances surrounding the violation. Such facts
might include the number of providers and suppliers that contracted for
prohibited AO consulting services, and the number of times the AO
violated the restrictions of Sec. 488.8(i). We proposed at Sec.
488.8(i)(7) that the requirements at Sec. 488.8(i) would become
applicable 1 year from the effective date of the final rule with
comment period to allow for an appropriate time of transition. We
believe that this would provide ample time for the AOs to prepare for
and implement the proposed requirements at Sec. 488.8(i).
We note that other CMS programs have established similar conflict-
of-interest and independence provisions for organizations that have a
public trust role in assessing the quality of services provided. For
example, in the Medicaid program, CMS has established regulatory
standards with respect to the independent judgment of any External
Quality Review Organization that reviews the quality of the Medicaid
managed care organization for the State (42 CFR 438.354). These
regulations establish, among other requirements, that an External
Quality Review Organization may not review any managed care entity for
which that organization has also conducted a private accreditation
review within the previous 3 years.
Our proposal to place restrictions on the provision of specific
consulting services by AOs to their currently-accredited providers and
suppliers is authorized by section 1865(a)(2) of the Act, which gives
CMS the broad power of oversight of the activities of AOs. The
provision of specific AO consulting services is one of the factors in
section 1865(a)(2) of the Act that should be considered in determining
whether a national accreditation body demonstrates that all of the
applicable conditions or requirements of this title are met or exceeded
and that its determination is free from any conflict of interest such
as that discussed in this rule.
The comments and our responses are set forth below.
Comment: We received several comments of general support for the
proposal to place restrictions on consulting services provided by AOs
to the Medicare-certified providers and suppliers they accredit. One
commenter expressed appreciation for CMS' recognition that AOs provide
helpful direction and support via fee-based consulting to facilities
seeking accreditation. Another commenter voiced their appreciation for
CMS' efforts to provide policies that aim to ensure actual or perceived
conflicts of interest do not arise when AOs offer accreditation and
consulting services. One commenter agreed that there is fee-based
consulting abuse by specific AOs while another commenter stated that
they agreed with the overall intent of the proposed provisions to curb
such behavior.
Response: We thank the commenters for their input and support of
the proposals.
Comment: One commenter stated that there was no proposal to add a
definition of the term ``consulting services'' to the CMS regulations
at Sec. 488.1. This commenter further suggested that CMS define and
qualify ``consulting services'' as it relates to deemed accreditation.
Another commenter stated that they define ``consulting'' as providing
professional or expert advice for the purpose of finding a solution to
a problem. This commenter suggested that CMS use this definition for
``fee-based consulting''. Several commenters requested that CMS add a
definition of ``consulting services'' in Sec. 488.1 or elsewhere in
the final rule with comment period.
One commenter encouraged CMS to clearly define what was meant by
``consulting services'', and they proffered the following definition
for consideration:
``Consulting is defined as the provision of any of the following:
``<bullet> On-site or remote assessments of an accredited
organization's compliance to AO' standards and/or the Medicare
Conditions of Participation--commonly known as mock surveys.
``<bullet> Providing direct or indirect assistance in developing
and/or implementing corrective actions plans for deficiencies
identified as a result of any type of survey activity. This does not
include a review of submitted
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corrective action plans to an AO as a result of deficiencies identified
during survey activities.
``<bullet> Providing direct or indirect assistance to an accredited
organization in specific preparation activities for an AO and/or
Medicare survey. This does not include providing standards
interpretation or general information and resources about the survey
process.''
The commenter stated that they believe that the above definition
addresses the salient concerns promulgated in the proposed rule but is
not so overly expansive that it prohibits an AO from working
effectively with its accredited providers and suppliers.
Another commenter stated that the Merriam-Webster dictionary
defines ``consulting'' as ``providing professional or expert advice.''
This commenter further states that the Merriam-Webster dictionary
defines ``education'' as ``the action or process of educating or of
being educated; to provide with information.'' This commenter stated
the opinion that, based on these definitions, they do not view the
provision of general education as a conflict of interest.
Another commenter stated that no definitions were provided to
distinguish between consulting, education, or training. The words are
used interchangeably throughout the document. There could be a conflict
of interest if the AO provides consulting services whereby the AO
provides individualized analysis of a particular organization and
participates in preparing, guiding, and assisting a specific
organization in creating the processes and documentation necessary to
pass accreditation. There is no conflict if the AO makes available
tools and education to assist organizations to come into and remain in
compliance with accreditation standards, and Federal and State
regulations. AOs should be permitted to provide tools and education
through workshops, webinars, gap analysis, policies, and forms that are
designed for a general audience.
Response: While we did not propose a definition, we did include a
description of ``fee-based consulting services'' in the proposed rule
(89 FR 12001). This is the same description of fee-based consulting
defined in the ``Medicare Program: Accrediting Organizations Conflict-
of-Interest and Consulting Services Request for Information, that was
published on December 20, 2018 (83 FR 65331); hereinafter referred to
as ``2018 AO Conflict-of-Interest RFI''.
After careful consideration of the many comments received on both
the 2018 AO Conflict-of-Interest RFI and the proposed rule regarding
fee-based consulting services versus consulting services, we are
retaining the qualifying term, ``fee-based,'' and are adding a
definition of consulting services at Sec. 488.1 that would be
incorporated into the requirements at Sec. Sec. 488.8(i) and (j).
Comment: One commenter was concerned that the definition of fee-
based consulting at Sec. 488.5 includes fee-based general education.
Another commenter stated that they provide free education to the
providers they accredit including a range of fee-based general
education certification programs for providers accredited by the AO and
those not accredited by the AO.
This commenter further stated that these courses contain high-level
content, are taught by the AO staff, and include testing knowledge
acquisition and retention at the end of the course. The commenter
stated that their intent in offering these courses is to support the
CMS mission of ensuring healthcare providers who are certified by
Medicare understand the intent of the regulatory text to provide high-
quality safe care to beneficiaries and their families. One commenter
stated that they conduct fee-based 'training' workshops for individuals
about regulatory and quality requirements, sales, and leadership, and
faculty may include part-time surveyors. The commenter questioned
whether that would be considered a form of fee-based consulting or a
conflict of interest. One commenter questioned how CMS would view a
part-time surveyor of the AO who provides consulting services during
their time when they are not actively on the clock for the AO. One
commenter agrees there should be restrictions on fee-based consulting
activity of AOs (or associated division/business entities) when it
directly conflicts with the business of accreditation. This commenter
stated that particular AOs are engaging in fee-based services for the
provider and suppliers they accredit through activities such as
completing mock surveys to identify an organization's areas of non-
compliance, assisting organizations with the plan of correction
completion, offering for purchase products such as survey readiness and
policy/procedure manuals, and advising services that help an
organization pass a survey.
This commenter stated that while these services are couched as
advisory or gap analysis services by the AO, they still represent a
conflict of interest. One commenter was concerned that the definition
of fee-based consulting at Sec. 488.5 includes fee-based general
education. One commenter stated that while they would like to offer all
their education free of charge, as a nonprofit, this would
significantly impact their ability to operate. One commenter stated
that they are generally supportive of this proposal but have major
concerns regarding the language in the proposed rule specifically, (89
FR 12009), stating that the restrictions on fee-based consulting would
not prohibit an AO from providing free education about the Medicare
conditions, the AO's accreditation standards and survey process as long
as the AO does not raise its accreditation fees or do anything else
that would cause the provider or supplier to incur any additional costs
for the education provided by the AO's accreditation division or
consulting division or consulting company. This commenter stated that
they provide a variety of support services (educational webinars, staff
training resources, template documents, standards interpretation, etc.)
to its accredited organizations free of charge. The services are not
targeted to a specific organization or in response to any
organization's specific needs. They are simply available to all
organizations to use as they wish. There is no requirement for an
accredited organization to use these services, nor is the
organization's survey affected by such use or non-use. They believe
this approach should not be construed as being tied to accreditation
fees and thus be considered fee-based consulting services.
This commenter further stated that they provide an annual education
conference that is open to both accredited and non-accredited
organizations. There is a separate per person fee charged to attendees.
The commenter stated that the fee barely covers the cost of the
conference and there is no profit made. Their accredited providers and
suppliers are not required to attend, nor does attendance (or lack
thereof) impact any survey activity or their accreditation status. They
state that this is essentially a community-wide education conference.
They point out that if this is considered fee-based consulting
services, then their accredited facilities would not be able to attend.
This commenter strongly urged that the noted language be stricken from
the final rule.
One commenter stated that, relative to fee-based consulting and
education provided by the AOs, CMS specifies that the proposals would
not prohibit the AOs from providing no-cost education, such as general
education about the AO's accreditation and survey process and mock
surveys. The restrictions on
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AO fee-based consulting would also not prohibit AOs from providing
education about the Medicare conditions, AO standards, or survey
process, to its accredited healthcare providers and suppliers, as long
as this education was provided completely free of charge. The commenter
observed that the provision would confuse the industry as the
distinction between education and consulting was unclear. This
commenter stated that providers have shared with them that a primary
driver of utilization of an AO is the ability of the facility to seek
information and guidance that helps them understand, interpret, and
comply with the Medicare conditions and regulatory requirements.
This commenter recommended that AOs be allowed to provide this type
of education on a global basis, that is, through workshops sponsored by
the AO, workshops where AO staff present, conference presentations, and
webinars hosted by the AO or other entities such as national or State
associations.
One commenter stated that while they do not presently offer fee-
based consulting services, they do offer training services and other
supportive services that complement accreditation and quality
improvement activities in their accredited providers. This commenter
requested that we clarify our definitions of all the types of services
subject to this requirement, to ensure that discretionary
interpretations do not unfairly impact AOs or restrict their ability to
do business. One commenter stated that allowing AOs to provide no-cost
education could enhance healthcare providers' understanding of
accreditation standards and processes without compromising the
impartiality of the AOs. One commenter generally agreed with our views
on the necessity of avoiding potential conflicts of interest that may
arise from the provision of fee-based consultations by AOs to
accredited providers and suppliers. However, they noted that providers
benefit from the educational resources provided by AOs.
The commenters stated that should CMS finalize this requirement as
proposed, providers would face uncertainty about the timing of
accessing otherwise beneficial education from an AO and that CMS itself
recognizes that AOs have expert insight that is valuable to providers
in meeting their specific compliance needs.
Response: We are not going to opine on the legality of specific
hypothetical examples of education, training, and consulting services
provided by commenters at this time. However, general education
provided by an AO would not constitute a conflict of interest. Section
488.8(i)(4)(iv) allows AOs to provide general education unless it meets
the definition of consulting services we are finalizing in this rule.
As we have noted previously, we have also added a definition of ``Fee-
based consulting services'' at Sec. 488.1 that more clearly outlines
the type and general timing of the specific consulting services an AO
might provide to facilities that it accredits and that would be subject
to the requirements of Sec. Sec. 488.8(i) and (j) in this final rule
with comment period. We believe that this definition will help AOs and
providers determine which types of AO consulting services are
restricted by this rule and when these restrictions would apply.
Comment: One commenter stated that two of the three AOs that
accredit home health and hospice providers offer intensive educational
courses about the AO's standards, conditions of participation and
survey process. Individuals successfully completing these intensive
workshops are granted a ``certification''. The information in these
workshops is extremely helpful to individuals in learning about the
Medicare conditions of participation as well as the AO standards,
interpreting and applying them correctly. The types of individuals
completing these workshops are those employed by facilities that are
accredited or going through the accreditation process as well as those
consulting in these areas or employed by larger consulting firms. CMS
should consider the potential for conflicts of interest with the
consultants and consulting firms with these certifications.
Response: We thank the commenter for this information.
Comment: One commenter noted that some AOs also certify products
for meeting the AO's standards and/or verify products for innovation.
While the AOs state on their website what certification/verification
means, providers and the public may view these products as being
endorsed by the AO as meeting the conditions of participation. CMS
should consider requiring the AOs to specify that the products are not
endorsed as meeting the conditions of participation or in any other way
endorsed by CMS.
Response: This comment is outside the scope of this rule, but we
thank this commenter for their suggestion.
Comment: One commenter requested that CMS clearly define ``interest
in or relationship with'' accredited organizations, to avoid any
discretionary concerns among AOs or provider entities.
Response: We proposed such definitions in the proposed rule (89 FR
12005). We believe that the definition provided in the proposed rule is
adequate and are finalizing it in this rule without change.
Comment: One commenter stated that some AOs in the healthcare
sector that offer consulting services to the same entities they
accredit perform the roles of both inspecting and accrediting. This
commenter believes that this dual role compromises the objectivity and
fairness of the accreditation process.
Response: We are not clear as to what the commenter means here by
the term, ``inspecting'', especially in relation to the term
``accrediting'', but we thank this commenter for their comment.
Comment: One commenter requested clarification on whether the
restrictions on AO fee-based consulting restrictions would apply to
Medicare-certified providers and suppliers that seek only AO
accreditation without deemed status. This commenter noted that some
providers and suppliers obtain non-deeming AO accreditation and use the
SA for Medicare certification.
Another commenter requested that additional language be added to
specify that fee-based consulting that is related to accreditation
services is restricted. This commenter stated that that they offer fee-
based growth strategy consulting services. The commenter stated that
this program is available to accredited (deemed/non-deemed) and non-
accredited provider organizations to assist them in developing an
ethical marketing plan to boost admissions and revenue through
strategic solutions tailored to their market, referral sources, and
needs. The commenter further stated that their fee-based growth
strategy consulting services are in no way linked to their
accreditation activity and was assessed by the AO and cleared before
implementation for conflict-of-interest issues.
Response: We believe that the provision of marketing and growth
strategy and development services to facilities that the AO accredits
for deeming purposes would still create a conflict of interest for the
AO and would be subject to the requirements of this rule.
However, in our discussion of the proposed restrictions on fee-
based consulting, we did not specifically address the scenario in which
the AO provides fee-based consulting to a provider or supplier that
receives accreditation from an AO for non-deeming purposes and uses the
State survey agency for certification. We only considered the scenario
in which the AOs provide fee-based consulting to the
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[…truncated; see source link]Indexed from Federal Register on June 16, 2026.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.