CMS proposes rule to require healthcare accrediting organizations report sale negotiations

CMS officials released a proposed rule that would establish a process that all organizations with Medicare-approved accreditation programs must follow if they are contemplating or negotiating a change in ownership. (Getty/peterspiro)

The Centers for Medicare and Medicaid Services is proposing a new rule it said is aimed at improving federal oversight of healthcare accreditation organizations (AO). 

In a release Tuesday, CMS officials said the proposed rule would establish a process that all AOs with Medicare-approved accreditation programs must follow if they are contemplating or negotiating a change in ownership.

The aim, they said, is to ensure the ongoing effectiveness of approved accreditation programs.

The news organization found that the commission rarely revokes accreditation for hospitals that are not in compliance with Medicare, even in situations where there were significant safety lapses. The Joint Commission also operates a consulting subsidiary, so it can charge hospitals both for the accreditation and the consult to fix any issues.

Current rules do not require AOs to provide CMS advanced notice of pending changes of ownership. CMS is first notified of an AO ownership change when an AO, under new leadership, applies for renewal of its agreement to CMS or it voluntarily notifies the agency. 

"We believe that this scenario must be addressed so that we may assure Medicare beneficiaries that the standards and conditions for surveying facilities will continue to be met by the accreditation programs that are transferred under new ownership," CMS wrote in the rule.

Prospective new owners would also be required to submit documentation and information confirming their ability to effectively perform the required accreditation tasks after the change of ownership takes place, officials said.

RELATED: CMS seeking information on potential conflicts of interest for accreditors that offer consulting services

"This rule builds on earlier steps we’ve take to strengthen federal oversight of Accrediting Organizations and ensure patients are receiving high quality, safe care at our nation’s healthcare facilities," said CMS Administrator Seema Verma in a statement.

Last year, CMS announced it would begin posting AO performance data online. It also issued a request for information seeking comment on the financial relationships between AOs and the health systems they review as it determines whether revisions should be made to the AO application and renewal process. 

CMS will be accepting comments for 60 days.

See the proposed rule below.