Any company that has opened a new healthcare facility already knows that the process of Medicare enrollment can be expensive and subject to long survey and approval delays. Providers should prepare themselves to follow a new path to enrollment, or expect even longer delays in the future.

In a recent department memorandum, CMS directed state surveyors—who perform Medicare certification surveys required for enrollment in Medicare for CMS—to place new Medicare applicants at the back of the line. This new policy also will affect those entities seeking a new provider number after an acquisition. CMS hopes that new providers will not wait for the state to perform survey visits but instead will decide to pay private accrediting organizations (AOs), such as Joint Commission, AAAHC, or CHAP, to provide Medicare “deemed status” through accreditation surveys. In the past, many providers have preferred to have state agencies conduct the initial Medicare certification survey because the state surveyors do not charge a separate fee and providers may not have wanted the additional burden of initiating the accreditation process just as their facility begins operations. CMS’s new survey directive will undoubtedly change this practice, as few new providers will be willing to wait for the state surveyor to make it to the end of their priority lists.

Certain facilities without deemed status accreditation options, such as ESRD facilities and transplant centers, will maintain a higher priority. There is a special provision for exception requests where there are concerns of serious access-to-care problems for beneficiaries. In instituting this policy, CMS cited resource limitations, the rising number of new providers, increasing survey responsibilities and increasing anti-fraud responsibilities.

For those facilities now required to obtain certification through “deemed status” there are several practical effects. First, by forcing providers to use third-party accreditation and incur third party fees, CMS is shifting the financial burden of the initial Medicare survey to providers. Second, the accreditation process can be complex. Some providers have complained that accreditation standards are needlessly technical and subject to frequent change. Some smaller providers have complained that complex accreditation standards are not well suited to their organizations. Perhaps most significantly, the accreditation process can be time consuming. Providers will now have to build the accreditation process into their timelines for creation of new facilities. For those providers that intended to use state Medicare certification surveys in the near term and are now being forced to look to the AOs, Medicare enrollment may be significantly delayed.

For more information, please contact Nate Gilmer or any member of the Waller Lansden Healthcare practice at 800-487-6380.