March 11, 2019

Is the hospital accreditation system broken? More than 120 industry stakeholders just weighed in.

Daily Briefing

    CMS has received more than 120 comments on its effort to reduce financial conflicts of interest in the hospital accreditation market, and while some health care organizations expressed support for the proposal, others said proposed regulations are unnecessary, Stephanie Armour reports for the Wall Street Journal.

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    CMS concerned about 'integrity' of some accrediting organizations

    The Trump administration is beginning to assess the integrity of accrediting organizations that also offer for-hire consulting services, according to Armour.

    Organizations such as the Joint Commission, which accredits and inspects more than 80% of U.S. hospitals, have subsidiaries that offer for-hire consulting services that help hospitals gain accreditation. As a result, some hospitals receive accreditation and paid consulting services from the same organization.

    According to Armour, CMS has expressed concern that the arrangements might pose a financial conflict of interest and encourage accreditors to "go easy" when inspecting hospitals that pay for their consulting services. CMS Administrator Seema Verma in release published late last year said the agency is "concerned that the practice of offering both accrediting and consulting services … may undermine the integrity of accrediting organizations and erode the public's trust." She added that CMS data show "state-level audits of health care facilities are uncovering serious issues that [accrediting organizations] have missed, leading to high 'disparity rates' between the two reviews."

    In an effort to address the issue, CMS issued a Request for Information seeking public comments on whether the agency should increase its oversight of financial agreements that may pose a conflict of interest.

    Stakeholders respond

    CMS received more than 120 comments on its request from health care providers, health care associations, accrediting companies, and industry groups.

    The Joint Commission said CMS should not increase its oversight of financial agreements. The Commission said there currently are barriers between subsidiaries that offer consulting services and those that offer accrediting services. The "firewall has been in place since 1987 and has been enhanced over the years to remain up-to-date with the structure and operations of the organizations," the Joint Commission said.

    Comments from hospitals and hospital groups—including the California Hospital Association and the American Hospital Association, which is a corporate member of the Joint Commission—mostly echoed the Joint Commission's comments.

    But some health care providers—including Vicki Hoak, CEO of the Pittsburgh Regional Health Initiative—called for CMS to re-evaluate the entire accreditation system, Armour reports.

    Accreditors, for their part, expressed mixed opinions. Some accreditors said there is no conflict of interest in the industry and that new regulations would impede the educational services that consultants and accreditors provide.

    However, other accreditors applauded CMS' effort and urged the agency to increase oversight, including of arrangements that may give certain hospitals "undue influence over the accreditation process," according to Kylanne Green, president and CEO of URAC, a nonprofit organization that accredits health care organizations.

    Similarly, hospital accreditor DNV GL Healthcare said increased oversight of the accreditation industry has shown that the "old-school model" of accreditation is no longer working. The company said accreditors that also provide consulting services to hospitals "could be perceived as showing favor to the hospital or health-care organization seeking accreditation where they benefit from paying for such services."

    Implications

    CMS' RFI marked the first time that potential financial conflicts of interest in the U.S. health accreditation system could be subject to regulation since the system was established 53 years ago.

    CMS said the comments will inform future rulemaking, meaning "possible changes" to the decades-old system "could come as a result," Armour reports (Armour, Wall Street Journal, 3/5).

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