Accrediting Organizations, commonly known as AOs, are a critical part of how the U.S. healthcare system keeps providers in check. Every year, the Centers for Medicare & Medicaid Services (CMS) approves AOs to inspect more than 9,000 healthcare providers and suppliers to make sure they are meeting the health and safety requirements set by Medicare and Medicaid. When a facility successfully gets accredited by one of these approved AOs, it is automatically considered to meet all federal participation requirements, a status referred to as "deemed" status.

For an AO to earn CMS approval in the first place, its accreditation standards have to meet or go beyond what Medicare and Medicaid require. Once approved, an AO can step in and conduct surveys in place of State Survey Agencies (SAs). Taking on that role also means taking on a public trust responsibility, since these organizations are essentially acting as the watchdogs for the nation's healthcare facilities.

But CMS has had some serious concerns about how well AOs have been carrying out that responsibility. Some of the problems the agency identified include facilities holding onto their accreditation even after being kicked out of Medicare or Medicaid for safety and quality failures. There have also been conflict of interest issues, with AOs offering paid consulting services to the very same providers they are supposed to be objectively inspecting, sometimes just weeks before a scheduled survey. On top of that, some AOs have been notifying facilities ahead of time before showing up for inspections, which directly contradicts CMS policy and creates inconsistent results compared to what state agencies produce.

CMS has been flagging these concerns in its annual Reports to Congress for some time. Now, it is taking formal action.
The agency first put out a Notice of Proposed Rulemaking on February 08, 2024, outlining changes to how AOs are regulated. After reviewing public comments on that proposal, CMS has now finalized the rule.

The Final Rule brings several important changes. AOs will now be held to the same Medicare standards that apply to state survey agencies, and their survey processes will need to more closely match how SAs operate. To address conflicts of interest, the rule places limits on the consulting services AOs can offer to facilities they accredit. It also flat-out prohibits AO owners, surveyors, staff members, and their immediate family members from being involved in any survey where they have a personal or financial connection to the facility being reviewed. That includes having any say in survey results or access to survey records tied to that facility.

A new performance monitoring process is also being introduced. If an AO scores poorly on a CMS-conducted evaluation, it will be required to put together a correction plan and make it publicly available. AO surveyors will additionally be required to complete the same training that CMS requires of state agency surveyors, helping to create more consistency in how surveys are conducted across the country.

Right now, CMS has nine approved AOs that survey and accredit Medicare-certified facilities. The new rule applies to all of them, with one exception. AOs that accredit clinical laboratories and certain noncertified suppliers are not covered by these changes. That group includes suppliers of advanced diagnostic imaging, home infusion therapy, diabetes self-management training, durable medical equipment, and prosthetics, orthotics, and supplies.

The full Final Rule, referenced as CMS-3367-FC, is available on the Federal Register at federalregister.gov.