Proposed CY 2026 HH PPS Payment Update Rule – Provider Enrollment, Certain Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Accreditation Policies, and DMEPOS Prior Authorization

Please note: The Provider Enrollment, Certain Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Accreditation Policies, and DMEPOS Prior Authorization content is part of the proposed Calendar Year 2026 Home Health Prospective Payment System (HH PPS) Rate Update; Requirements for the HH Quality Reporting Program and the HH Value-Based Purchasing Expanded Model; Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program Updates; DMEPOS Accreditation Requirements; Provider Enrollment; and Other Medicare and Medicaid Policies which was posted on the Federal Register Public Inspection desk on 6/30/2025.

While the DMEPOS subject matter is part of the rule, CHAP carved it out into a separate document to aid DMEPOS provider review.

Providers are strongly encouraged to review the rule in its entirety as this is only a summary of the content and to send comments to CMS by August 29, 2025. Instructions about submitting comments are located at the beginning of the rule. The final rule is expected to post late October- early November.

The themes in this section of the proposed rule are improving efficiency, validation that providers are compliant with regulatory requirements, and preventing fraud and abuse related to DMEPOS provider activity. Update of these regulations is aimed at that goal in order to preserve the Medicare Trust Fund.

Medicare Enrollment

CMS is proposing several changes to existing Medicare provider enrollment regulations to prevent Medicare fraud, waste, and abuse by keeping unqualified providers out of the Medicare program.

False or Misleading Information Revocation and Denial Ground

Provision citation	Proposed changes
§ 424.510	Update to § 424.510, which addresses certain general enrollment requirements, by adding new paragraph (d)(10) that would emphasize that all providers and suppliers are legally responsible for the accuracy, completeness, and truthfulness of all information they provide on or with their applications, regardless of whether another party completed the application.

Authority to Prescribe Drugs (§§ 424.535(a)(13)(ii) and 424.530(a)(11)(ii)) and Pattern or Practice of Prescribing (§ 424.535(a)(14))

Provision citation	Proposed changes
Sections 424.535(a)(13)(ii) and 424.530(a)(11)(ii) permit CMS to revoke or deny a physician’s or eligible professional’s enrollment if the licensing or administrative body for any state where the individual practices suspends or revokes the person’s ability to prescribe drugs.
§§424.535(a)(13)(ii) and 424.530(a)(11)(ii)	Change “prescribe drugs” to “prescribe one or more drugs” to provide additional clarity.
424.535(a)(14)	Change “Part B or D drugs” to “Medicare-covered drugs” to encompass Medicare Parts B, D, and now A.

Certain Modifications to Provider Enrollment Paragraph References (§§ 424.535(a)(23) and 424.530(a)(18)) and Enrollment Provisions (§ 424.205))

Provision citation	Proposed changes
Sections 424.535(a)(23) and 424.530(a)(18) allow CMS to revoke or deny, respectively, a provider’s or supplier’s enrollment if the provider or supplier violates certain conditions and standards pertaining to its provider or supplier type. One such supplier type is Medicare Diabetes Prevention Programs (MDPP), whose enrollment standards are at § 424.205(c) rather than § 424.205(d).
Paragraph (d)	Paragraph (d) would be changed to paragraph (c) in multiple regulatory provisions.

Abuse of Billing Privileges (§ 424.535(a)(8)(i))

Provision citation	Proposed changes
Section 424.535(a)(8) permits revocation based on the provider’s abuse of billing privileges.
New paragraph (i)(D) to § 424.535(a)(8)	Add new paragraph (i)(D) to § 424.535(a)(8) to include another potential paragraph (a)(8) situation: specifically, the beneficiary attests that the item(s) or service(s) identified on the provider’s or supplier’s claim, or claims was not or were not rendered or furnished.
Section 424.535(g)	CMS proposes to expand the bases for which they can apply a retroactive revocation effective date. The new grounds and effective dates, which would be designated as paragraphs (g)(2)(viii) through (xiv) (the requirement in current paragraph (g)(2)(viii) would be removed) would respectively be as follows: – For revocations based on a lapse in the IDTF’s comprehensive liability insurance under § 410.33(g)(6), the date the insurance lapsed. – For revocations based on the provider’s or supplier’s submission of false or misleading information on the enrollment application, the date the application’s certification statement was signed. – For revocations based on the provider’s or supplier’s failure to timely report a change of ownership or adverse legal action, or a change, addition, or deletion of a practice location, the day after the date by which the provider or supplier was required to report the change, addition, or deletion. – For revocations based on the surrender of the provider’s or supplier’s Drug Enforcement Administration certificate of registration in response to a show cause order, the date the certificate was surrendered. – For revocations based on the State’s suspension or revocation of the physician’s or practitioner’s ability to prescribe one or more drugs, the date of the suspension or revocation. – For revocations of any of the provider’s or supplier’s other enrollments under §424.535(i), the effective date of the revocation that triggered the revocation(s) of the other enrollment(s). – For revocations based on a DMEPOS supplier’s non-compliance with a condition or standard in § 424.57(b) or (c), respectively, the date on which the non-compliance began.
§ 405.800(b)(2) A revocation is effective 30 days after CMS or the CMS contractor mails notice of its determination to the provider or supplier, the only exceptions being the revocations referenced in current § 424.535(g)(2)(i) through (iv), which are retroactive.	Proposal to: – replace the current language in the latter provision with a statement that the effective date of a revocation is as specified in § 424.535 (which would include § 424.535(a)(8)(iii) and (g)) – modify § 424.57(e)(1) to state that the revocation effective date would be as specified in § 424.535 Given proposed new § 424.535(g)(2)(viii) through (xiv) — CMS proposes to – redesignate existing § 424.535(g)(2)(viii) as new § 424.535(g)(2)(xv) – replace the reference to “paragraphs (A) and (C)” in current § 424.535(g)(2)(viii)(D) (proposed new § 424.535(g)(2)(xv)(D)) with “paragraph (g)(2)”

New Deactivation Authority

Provision citation	Proposed changes
Regulatory policies regarding the provider enrollment concept of deactivation are addressed in § 424.540. There are currently eight reasons under § 424.540(a) for which CMS can deactivate a provider or supplier, one of which is that the provider or supplier has not submitted any Medicare claims for 6 consecutive months.
New § 424.547(a)(2)	– For purposes of § 424.547 only, the term “deactivate” means that the physician’s or non-physician practitioner’s ability to order, certify, or refer Medicare services or items has been stopped but can be restored upon the submission of updated information to distinguish deactivations of billing privileges from those of ordering, referring, or certifying capabilities – Add the following language to the beginning of this definition: “Except in the situations described in § 424.547” – some of the deactivation and reactivation procedures and impacts in § 424.540 must be included within new § 424.547
CMS also proposes the following, which would mirror, respectively, current § 424.540(b)(1), (b)(2), (d)(2), and (e).
§ 424.547(b)(1)	State that for a deactivated physician or practitioner to reactivate their ability to order, certify, or refer Medicare services and items, the individual must recertify that their enrollment information currently on file with Medicare is correct, furnish any missing information as appropriate, and be compliant with all applicable enrollment requirements in Title 42.
§ 424.547(b)(2)	State that notwithstanding § 424.547(b)(1), CMS may, for any reason, require a deactivated physician or practitioner to, as a prerequisite for reactivating the ability to order, certify, or refer, submit a complete Form CMS-855O application.
§ 424.547(c)	State that the effective date of a reactivation of the ability to order, certify, or refer Medicare services and items under § 424.547 is the date on which the Medicare contractor received the individual’s reactivation submission that was processed to approval.
§ 424.547(d)	Clarify that a physician or practitioner may not order, certify, or refer the Medicare services or items referenced in § 424.507(a) and (b) while deactivated under § 424.547.

Revisions to Stay of Enrollment Authority (§ 424.541)

Provision citation	Proposed changes
CMS states that providers must not be excessively or unfairly penalized for minor instances of non-compliance that, in general, do not pose or potentially pose significant threats to the Medicare program. One such situation is where a provider submits a revalidation or change of information application that is rejected under § 424.525(a)(1) or (2).
Expand § 424.541(a)(1)(i)	– Would include instances where the provider’s change of information or revalidation application is rejected under § 424.525(a)(1) or (2)) to reduce provider burden – Delete existing § 424.541(a)(3) and, in new § 424.541(a)(3)(i), state that the effective date of a stay is, as applicable: (1) the date on which the provider’s or supplier’s non-compliance began; or (2) the date on which the provider’s or supplier’s change of information or revalidation application was rejected under § 424.525 – Expand § 424.541(a)(1)(i) to establish a stay of enrollment for any period up to a maximum of 60 days in new § 424.541(a)(3)(ii)
Revise § 424.541(a)(a)(2)(ii)(B)(2)	Would replace the 60-day reference therein with the requirement that the stay must end on or before the expiration of the originally designated stay period. This would further clarify that the stay period can be less than 60 days
§ 424.541(a)(5)	Change “60-day period” to “CMS-assigned stay period”

Submission of Documentation

Provision citation	Proposed changes
To strengthen ability to validate ownership and managerial data – as well as other information that CMS or the MAC may be unable to verify through current means
New § 424.510(d)(2)(iii)(C)	CMS may require the submission of any other documentation needed to verify and confirm the information furnished on the enrollment application; this includes, but is not limited to, documentation regarding the provider’s or supplier’s ownership or management.

Reassignment Effective Dates

Provision citation	Proposed changes
Modify § 424.522(a)	The reassignment’s effective date and the ability to retroactively bill for services mirror the provisions in § 424.520(d)(1) and 424.521(a)(1).
New § 424.522(a)(1) and § 424.522(a)(2)	would state that the reassignment’s effective date is the later of the two dates identified in § 424.520(d)(1)(i) and (ii). New § 424.522(a)(2) would state that retrospective billing pursuant to a reassignment is permissible if the circumstances in § 424.521(a)(1) apply.

DMEPOS Liability Insurance

Provision citation	Proposed changes
Regulations require suppliers to have a comprehensive liability insurance policy of at least $300,000 that covers the supplier’s place of business, customers, and employees.
Modify § 424.57(c)(10)	An “authorized official” of the supplier (as that term is defined in § 424.502) must sign the liability insurance policy.

Deactivation Reason Clarification

Provision citation	Proposed changes
Section 424.550(b) addresses “change(s) in majority ownership” (CIMO) (as that term is defined in § 424.502) involving home health agencies (HHA) and hospices. Unless an exception applies, an HHA or hospice undergoing a CIMO must enroll in Medicare as a new HHA or hospice and undergo a state survey or accreditation. Since, in this situation, the seller will be departing the Medicare program, § 424.540(a)(8) permits CMS to deactivate the seller’s billing privileges. However, § 424.540(a)(8) currently only references sellers in an HHA CIMO and not those in a hospice CIMO.
§ 424.540(a)(8)	As a technical clarification, CMS proposes to include the latter within the scope of § 424.540(a)(8).

Adverse Legal Actions

Provision citation	Proposed changes
Consistent with § 424.516(b) through (d), certain provider and supplier types — such as physicians, non-physician practitioners, DMEPOS suppliers, and independent diagnostic testing facilities — must report any adverse actions (for example, felony convictions, misdemeanor conviction related to health care, medical license revocation) imposed against them, their owners, managing employees or organizations, or corporate directors or officers within 30 calendar days of the action.
§ 424.516(e)(1)	Include adverse legal actions within § 424.516(e)(1), meaning all providers and suppliers, regardless of type, would have 30 days, rather than 90 in some instances, to disclose this data.

CMS proposes to Medicaid and CHIP Enrollment and Termination

Provision citation	Proposed changes
Section 1902(a)(39) of the Children’s Health Insurance Program (CHIP) (title XXI of the Act) affirms that the State must deny or terminate a provider’s Medicaid or CHIP enrollment if the provider is terminated under the Medicare program, or the Medicaid program or CHIP of any other State; and currently included in the termination database under § 455.417. The provisions of section 1902(a)(39) of the Act are currently incorporated in § 455.416(c), though with one inadvertent exception. Rather than stating that the provider – along with being in the termination database – must be terminated under the Medicare program or the Medicaid program or CHIP of any other State, § 455.416(c) states that the provider’s termination must be from Medicare and the Medicaid or CHIP program of any state. That is, the word “and” is between the references to Medicare and Medicaid when the word “or” should be there instead, consistent with the statutory language.
Section 1902(a)(39) of the Act	Proposal to correct this issue and to ensure compliance with section 1902(a)(39) of the Act, by changing the aforementioned “and” reference to “or.”

DMEPOS Accreditation Proposed Provisions

Provision citation	Proposed changes
New definitions in § 424.58(b) Reorganize the current paragraph structure and designations at § 424.58 Existing provisions would be moved, revised, deleted, or supplemented as warranted	– “Complaint” is an allegation from any party (and via any format) that one of the AO’s accredited suppliers may be non-compliant with one or more quality standards or other applicable CMS requirement; the complaint need not involve actual or potential beneficiary harm – “Immediate jeopardy” is a situation where the supplier’s non-compliance with one or more quality standards or other applicable CMS requirement has caused, or is likely to cause, serious injury, harm, impairment, or death to a patient or to the health and safety of the general public – “Reasonable assurance” as meaning that an AO has demonstrated to CMS’ satisfaction that– – Its accreditation program requirements meet or exceed the Medicare program requirements; – The suppliers the AO accredits meet or exceed Medicare requirements; and – The AO is compliant with all provisions of § 424.58 – “Unannounced survey” means: – A survey conducted without any prior notice of any type (through any means of communication or forum) to the supplier to be surveyed, such that the supplier does not expect the survey until the surveyors arrive; and – The AO schedules its surveys so that suppliers cannot predict when they will be performed
Opportunity to Comment: CMS is soliciting comments on the propriety of these definitions and welcome any suggested edits.

Initial Application for Approval of AO’s Accreditation Program (New § 424.58(c))

Provision citation

Proposed changes

Changes and additions to existing § 424.58(b)(1), which would be redesignated as new paragraph (c)(1).

– Paragraph (b)(1) states that an AO applying for approval or reapproval of its DMEPOS accreditation program must furnish certain information to CMS.
– This requirement would serve as the opening statement for new § 424.58(c)(1) but with the following revisions:
– Removal of the reference to “re-approval” since reapproval application processes would be addressed separately in new § 424.58(d)
– Replacement of the current phrase “the following to CMS:” with “all the following information and materials to demonstrate that the accreditation organization provides reasonable assurance (as defined in paragraph (b) of this section) regarding its program.”

Confirmation of Compliance (New 424.58(c)(1)(iii))

Provision citation	Proposed changes
Existing § 424.58(b)(1)(iii), which would become new § 424.58(c)(1)(iii), starts with language that details the AO’s description of its operational processes	Revise this to require a detailed description of the organization’s operational, survey, and other accreditation processes to confirm that the suppliers it accredits meet or exceed the DMEPOS quality standards and Medicare program requirements
Current paragraph (b)(1)(iii) contains six elements of the required description, such as: (1) an explanation of the frequency with which surveys will be performed; and (2) guidelines and instructions to surveyors	– Designate these elements as new § 424.58(c)(1)(iii)(A) through (F) in the same respective order they are listed in existing (b)(1)(iii) – Include new paragraph (c)(1)(iii)(G) that would require a description to address how the AO determines whether to perform a survey in situations where it has the discretion to do so; this would have to include a suggested methodology for sampling locations for surveys under a single tax identification number or organization.

Conflicts of Interest, Consulting Services, and Number of Surveyors (New § 424.58(c)(1)(vii)(D) and (E))

Provision citation	Proposed changes
§ 424.58(c)(1)(vii) Paragraph (D) would require the AO to explain in detail its policies and procedures for avoiding conflicts of interest and the appearance thereof involving individuals who conduct surveys or participate in accreditation decisions.	This must include the organization’s policies and procedures for the following: – The separation of its consulting services from its accreditation services. – Protecting the integrity of the DMEPOS AO’s accreditation program (including the requirements of proposed § 424.58(m) and (n) (discussed later in this section VI.B. of this proposed rule). – The prevention and handling of potential or actual conflicts of interest that could arise from situations in which a DMEPOS AO owner, surveyor, or employee has an interest in, or relationship with, a DMEPOS supplier to which the AO provides accreditation services. Such interests or relationships include, but are not limited, to the following: – ++ Being employed as a DMEPOS AO surveyor. – ++ Being employed by a DMEPOS supplier that is accredited by the DMEPOS AO. – ++ Having an ownership, financial, or investment interest in a DMEPOS supplier that is accredited by the DMEPOS AO. – ++ Serving as a director of or trustee for a DMEPOS supplier that is accredited by the DMEPOS AO. – ++ Serving on a utilization review committee of a DMEPOS supplier that is accredited by the DMEPOS AO. – ++ Accepting fees or payments from a DMEPOS supplier or group of DMEPOS suppliers that is/are accredited by the DMEPOS AO. – ++ Accepting fees for personal services, contract services, referral services, or for furnishing supplies to a DMEPOS supplier that is accredited by the DMEPOS AO. – ++ Providing consulting services to a DMEPOS supplier that the DMEPOS AO accredits. – ++ Having members of their immediate family engaged in any of the above stated activities. The term “immediate family member” would be defined in proposed 424.58(b) as any person with whom the AO owner(s), surveyors or employees have a lineal or immediate familial or marital relationship, including a husband or wife; birth or adoptive parent, child, or sibling; – stepparent, stepchild, stepbrother, or stepsister; father-in-law, mother-in-law, son-in-law, – daughter-in-law, brother–in–law, or sister-in-law; grandparent or grandchild; and spouse of a – grandparent or grandchild. (This definition would be included in proposed revised paragraph (b) of this section.) – ++ Engaging in any activities during the course of the survey of the DMEPOS supplier that would be or cause a conflict of interest.
New paragraph § 424.58(c)(1)(vii)(D)(5)	– CMS would clarify that a conflict of interest exists when a DMEPOS AO, the DMEPOS AO’s successors, transferees, or assigns, the DMEPOS AO owner(s), surveyors, or employees, or the immediate family members of the DMEPOS AO owners(s), surveyors and employees have an employment, business, financial or other type of interest in or relationship with a DMEPOS supplier that the DMEPOS AO accredits. – CMS would require the AO to outline its policies and procedures for ensuring it always has an adequate number of surveyors.

AO Program Deficiencies (New § 424.58(c)(1)(viii))

Provision citation	Proposed changes
New § 424.58(c)(1)(viii)	CMS proposes that the AO describe its processes for identifying and correcting deficiencies within its accreditation program.

Use of Data to Ensure Program Compliance (New § 424.58©(1)(ix))

Provision citation	Proposed changes
Existing paragraph (b)(1)(viii) requires the AO to describe its data management, analysis and reporting system for its surveys and accreditation decisions, including the kinds of reports, tables, and other displays generated by that system	Designate this paragraph as new ©(1)(ix) and include an additional requirement (taken from § 488.5(a)(11)(i)) that the description explain how the AO uses its data to ensure that its accreditation program adheres to Medicare program requirements.

Complaint Process (New § 424.58©(1)(x))

Provision citation	Proposed changes
Current § 424.58(b)(1)(ix) requires the AO to explain its procedures for responding to and investigating complaints against its suppliers; this includes processes for coordinating with licensing bodies, ombudsman programs, the National Supplier Clearinghouse (NSC), and CMS.	– Add procedures for closing out complaints as part of this information submission requirement. CMS needs to know how the AO would resolve a particular complaint and deem the matter concluded. – Change the NSC reference to the applicable National Provider Enrollment (NPE) contractor. This is because the latter entities have replaced the NSC as CMS’ DMEPOS enrollment contractors.
New paragraphs § 424.58©(1)(x)(A) and (B)	– Would require submission of the following information: – The steps and research the AO will undertake in its review of the complaint; and – How the AO determines whether, in accordance with a complaint, non-adherence to a quality standard or other applicable CMS requirement exists, including the data it considers in its review and when and how it would take action against the supplier.

Redesignation of Additional Data Submission Provisions (New § 424.58(c)(1)(xi) through (xv))

Provision citation

Proposed changes

Existing § 424.58(b)(1)(x) through (xiv) address other types of information the AO must submit, such as: (1) policies and procedures for notifying CMS of non-compliant suppliers; and (2) a list of the organization’s currently accredited DMEPOS suppliers.

With two exceptions, CMS is not proposing to revise these paragraphs but only to designate them as new § 424.58(c)(1)(xi) through (xv). The two exceptions are as follows:
– to include each supplier’s accreditation product codes as data the AO must submit with its initial or reapproval application in existing paragraph (xii)(B) (redesigned as new paragraph (xiii)(B)).
– that the AO must also list each supplier’s accreditation effective date with its initial or reapproval application in existing paragraph (xii)(C) (redesigned as new paragraph (xiii)(C)).

Knowledge and Experience (New § 424.58(c)(1)(xvi))

Provision citation	Proposed changes
Section 488.1010(a)(4), which pertains to home infusion therapy supplier accreditation, requires AOs in their applications to furnish information that demonstrates their knowledge, expertise, and experience in home infusion therapy.	Proposed similar provision in new § 424.58(c)(1)(xvi) regarding DMEPOS

Review Timeliness (New § 424.58(c)(xvii))

Provision citation	Proposed changes
New § 424.58(c)(xvii)	The AO furnish information about its ability to conduct timely reviews of supplier accreditation applications. This requirement, would help CMS determine whether the AO has adequate resources to handle the accreditation requests it receives.

Decision-Making Process (New § 424.58(c)(1)(xviii))

Provision citation	Proposed changes
New § 424.58(c)(1)(xviii)	Would require the AO to describe its decision-making process, including its policies and procedures for approving, denying, or terminating a DMEPOS supplier’s accreditation status. This must also include an explanation of the reasons for which the AO will deny or terminate a supplier’s accreditation.

Surveys (§ 424.58(c)(1)(xix))

Provision citation

Proposed changes

New § 424.58(c)(1)(xix)(A) and (B)

The AO outlines its policies and procedures for the following:
– Determining whether and when a survey is performed (for example, the DMEPOS supplier is providing a new item type). This must include the circumstances under which the AO will impose a corrective action plan (CAP) in lieu of performing a follow-up survey regarding DMEPOS supplier deficiency.
– Ensuring that all onsite surveys are unannounced, including for preventing unannounced surveys from becoming known to the supplier beforehand.

CAPs (§ 424.58(c)(1)(xx))

Provision citation	Proposed changes
In lieu of denying or terminating a supplier’s accreditation for failing to meet the quality standards, an AO may apply a CAP to the supplier. Existing § 424.58 only references CAPs in paragraph (c)(1)(i) thereof, whereby AOs must provide to CMS various survey-related information, which includes CAPs.
New § 424.58(c)(1)(xx)	The AO must outline the policies and procedures via which it will apply a CAP to the supplier. This includes: – The specific circumstances under which the AO will apply a CAP as opposed to denying or terminating accreditation, and the reason(s) for why the AO believes a CAP in these situations is more appropriate; and – How a CAP is developed, implemented, and enforced, including– – ++ How the AO determines whether a CAP is acceptable; – ++ The requirements of (and the timeframe and deadline for) the supplier’s resumption of compliance; – ++ How the AO ascertains whether the supplier has returned to and maintains compliance; and – ++ The circumstances under which the AO will impose a CAP instead of performing a follow-up survey for a supplier deficiency.
New § 424.58(c)(1)(xxiii)(E)	The AO must agree to inform CMS of any decision to apply a CAP to a specific supplier within 10 calendar days of the decision. This must include: – The reason for the decision; – A detailed explanation and justification as to why the AO applied a CAP instead of, as applicable, denying or terminating the supplier’s accreditation; and – The details of the supplier’s CAP.

Describing and Defining DMEPOS Supplier Deficiencies (New § 424.58(c)(1)(xxi))

Provision citation	Proposed changes
New § 424.58(c)(1)(xxi)	The AO must explain– – What it considers to be a supplier deficiency and how it defines the term “deficiency”; and – Whether the AO has different levels of DMEPOS supplier deficiencies.

Potentially Fraudulent Activity (New § 424.58(c)(1)(xxii))

Provision citation	Proposed changes
New § 424.58(c)(1)(xxii)	The AO must describe its processes for: (1) detecting and addressing potential fraud, waste, and abuse by suppliers (including identifying the AO’s definitions of the terms “fraud”, “waste”, and “abuse”); and (2) reporting this conduct to CMS, and, as applicable, law enforcement.

Agreement of Compliance (New § 424.58(c)(1)(xxiii))

Provision citation	Proposed changes
As part of the AO application process for certified provider and certified supplier accreditation, 42 CFR 488.5 requires the AO to furnish various written acknowledgements stating that the AO will perform certain activities such as survey reports and notification of proposed changes on the AOs accreditation program. However, no concomitant requirement to submit acknowledgement statements exists in current § 424.58(b).
New § 424.58(c)(1)(xxiii)	The AO’s chief executive officer (CEO) (or similar official with authority to commit the organization to adhere to Medicare laws and regulations) provide written acknowledgement that, as a condition of CMS’ approval or continued approval of the AO’s accreditation program, the AO agrees to adhere to the provisions in § 424.58(c)(1)(xxiii). – The acknowledgement, which the official must sign and date and which must be on the AO’s letterhead, must list all the data elements in § 424.58(c)(1)(xxiii) and contain the AO’s agreement to comply therewith.

Data Submission Within 3 Business Days

Provision citation	Proposed changes
*New § 424.58(c)(1)(xxiii)(A)(1)* and (2)**	The AO must agree to provide CMS within 3 business days of the request– – Any of the data described in § 424.58(e)(1)(i); and – Any other information CMS deems necessary to facilitate its oversight of the AO’s accreditation program.

Immediate Jeopardy Notifications

Provision citation	Proposed changes
Existing § 424.58(c)(4) requires the AO to send written notice to CMS within 2 calendar days of identifying an accredited DMEPOS supplier’s deficiency if the latter poses an immediate jeopardy situation; any adverse action the AO accordingly takes must also be identified.
Designated as new § 424.58(e)(1)(iii))	AO’s specific agreement to comply with this requirement is warranted.

Notification of Change in AO Program

Provision citation	Proposed changes
Current § 424.58(c)(1)(v) requires an AO to notify CMS monthly of any proposed changes to its accreditation standards, requirements, or survey process.
New § 424.58(c)(1)(xxiii)(C)	The AO must agree: (1) to furnish this notification to us in writing; and (2) that it will not implement such changes absent prior written notice of continued program approval from CMS consistent with § 424.58(e)(2) (discussed later in this proposed rule).

Termination or Other Change in Supplier’s Accreditation Status

Provision citation	Proposed changes
Section 488.1010(a)(17)(iv) requires a home infusion therapy supplier AO to acknowledge that it will notify CMS of any decision to revoke or revise the accreditation status of a specific HIT supplier within 3 business days of the date the AO took the action. As accreditation is a requirement for DMEPOS enrollment under § 424.57(c)(24), CMS must know as quickly as possible when a supplier’s accreditation is terminated, revoked, withdrawn or amended so we can take similar action concerning the supplier’s enrollment.
New § 424.58(c)(1)(xxiii)(D)	The AO must agree to provide this notification in writing to CMS within 3 business days of the AO’s action.

Data for CMS Evaluation of Performance

Provision citation	Proposed changes
– Section 488.5(a)(11)(ii) requires a certified provider or supplier AO to agree to submit timely, accurate, and complete data to support CMS’s evaluation of the AO’s performance. – Though some of it may overlap other data referenced in proposed new § 424.58(c)(1), we believe a general, overarching agreement to furnish the scope and breadth of data addressed in § 488.5(a)(11)(ii) is justified so we can ensure that we have all information necessary to execute our oversight functions.
New § 424.58(c)(1)(xxiii)(F)	Would duplicate the requirements of § 488.5(a)(11)(ii) (with modest modifications specific to DMEPOS suppliers).

AO Implementation of CMS Changes

Provision citation	Proposed changes
There are instances where CMS changes its DMEPOS accreditation program requirements. Current § 424.58(c)(2) requires that within 30 calendar days of said change, the AO must submit to CMS: (i) an acknowledgment of CMS’s notification of the change; (ii) a revised crosswalk reflecting the new requirements; and (iii) an explanation of how it will alter its standards to comply with CMS’s new requirements within the timeframes that CMS specifies in notification.
New § 424.58(c)(1)(xxiii)(G)	Would require that the AO agree to adhere to the following: – Submission of the data required in § 424.58(e)(7). (New paragraph (e)(7) would reflect current requirements in paragraph (c)(2).) – The proposed changes must be submitted to CMS within 30 calendar days of the date of CMS’ written notice to the AO. – The AO must not implement its proposed corresponding changes without prior CMS approval.

Deficiencies

Provision citation	Proposed changes
New § 424.58(c)(1)(xxi)	– Would require the AO to explain what it considers to be a DMEPOS supplier deficiency, how it defines the term, and whether it has different levels of deficiencies. – And to facilitate consistency among the AOs, CMS should retain the discretion to: (1) define the term deficiency; and (2) establish deficiency levels for use across all AO DMEPOS accreditation programs.
New § 424.58(c)(1)(xxiii)(H)	Would require the AO to agree to accept and adhere to any CMS-established deficiency definitions and levels and categories.

Surveyors as Witnesses

Provision citation	Proposed changes
New § 424.58(e)(9)	Would require the AO to agree that its surveyors can serve as witnesses if CMS takes an adverse action against a supplier based on an accreditation finding.

Sampling

Provision citation	Proposed changes
New § 424.58(c)(1)(xxiii)(J)	To require the AO’s agreement that if CMS permits the AO to perform surveys via a sampling process, the AO: – will submit to CMS its planned sampling methodology in detail; and – will not undertake sampling until CMS has approved the AO’s methodology.

Patient Records

Provision citation	Proposed changes
As part of its survey of a supplier, the AO must examine the supplier’s patient medical records. Ss stated in sub-regulatory guidance, the reviewed patient medical records must not include: (1) mock files; (2) fictional patients; (3) simulated documentation; and (4) templates. Actual records of the patients are required.
New § 424.58(e)(8)(ii)	The AO agree not to use these four types of records in its surveys. We also propose to include duplicate patient records as a fifth category. This means that the reviewed records must be of the supplier’s own patients and not those of another supplier.

Costs of Ad-Hoc Surveys

Provision citation

Proposed changes

New § 424.58(e)(8)(ii)

CMS may at any time direct the AO to perform a survey of any accredited supplier or a group thereof.
– There is concern related to delays in the survey’s performance due to a potential disagreement between the AO and the supplier regarding which of them pays the cost of a CMS-required survey. To avoid such situations, CMS believes the cost issue should be resolved well beforehand.
CMS proposes in new § 424.58(c)(xxiii)(L) that the AO must agree to have a binding written agreement with each supplier it accredits regarding whether the AO, the supplier, or both will assume the costs of a survey that CMS directs the AO to perform under paragraph (e)(8)(ii) of this section.

Truthfulness and Accuracy

Provision citation	Proposed changes
New § 424.58(c)(xxiii)(M)	The AO must agree to submit all required information to CMS both before and after approval of its accreditation program in a truthful, accurate, and complete manner.

Compliance with § 424.58

Provision citation	Proposed changes
§ 424.58(c)(1)(xxiii)(N)	– The AO in its statement must agree to always comply with all the requirements in § 424.58. – The AO should abide by: (1) its representations in its application; and (2) any policy, procedural, or practice change that CMS authorized.

Additional Information Needed (New § 424.58(c)(2))

Provision citation	Proposed changes
New § 424.58(c)(2)	if CMS determines that further data is necessary to make a determination on the AO’s request for approval, they will notify the organization and afford it an opportunity to provide this data.

Application Withdrawal (New § 424.58(c)(3))

Provision citation	Proposed changes
New § 424.58(c)(3)	an AO may withdraw its application for approval of its accreditation program at any time before CMS posts the approval described in § 424.58(c)(5)

Reasons for Denial (§ 424.58)

Provision citation	Proposed changes
CMS states it is especially important to have clear reasons in § 424.58 for which we can deny an AO’s application for approval of its accreditation program.
Denial reasons in new paragraphs (c)(4)(i) through (viii)	Several reasons duplicate those in § 424.530(a), given the latter’s effectiveness in keeping unqualified providers and suppliers out of the Medicare program. Specifically, denial of an AO’s application can occur if CMS determines that: – The AO has failed to comply with all application, data, and agreement submission requirements outlined in § 424.58(c). If the applicant does not submit all the required information and agreements in § 424.58(c), the application is deficient, and the AO therefore cannot be approved. – The AO has failed to provide reasonable assurance (as defined in paragraph (b)). – The current number of CMS-approved DMEPOS AOs is sufficient to ensure the continued administration of CMS’ DMEPOS accreditation program. The AO’s DMEPOS program was previously terminated, suspended, or placed on probation by CMS under, respectively, new § 424.58(h), (i), or (j). – CMS may terminate, suspend, or place on probation an AO’s accreditation program in certain circumstances, such as noncompliance with the provisions of § 424.58 – The AO, or any owner (as defined in § 424.502), managing employee (as defined in § 424.502), governing board member, W-2 or contracted surveyor, or W-2 or contracted health care or administrative or management services personnel thereof– – ++ Is OIG excluded; – ++ Is debarred, suspended, or otherwise excluded from participating in any Federal procurement or non-procurement activity; or – ++ Within the preceding 10 years: – ++ Was convicted of a Federal or State felony offense that CMS determines is detrimental to the best interests of the Medicare program and its beneficiaries; – ++ Has had a Medicare enrollment revoked under § 424.535; – ++ Has had a license to provide health care suspended or revoked by any State licensing authority; or – ++ Has been suspended or terminated from participating in a Federal or State health care program. – The AO has submitted false or misleading information on its application in order to gain CMS approval or reapproval as a DMEPOS AO – The AO is non-compliant with any provision in § 424.58. – CMS otherwise determines that approval of the applicant as a DMEPOS AO would not be in the best interests of the Medicare program and its beneficiaries. (This “best interests” principle is similar to that in previously referenced § 424.530(a)(3).) – CMS receives information indicating that the entity – while acting as an AO or as a CMS contractor in another capacity – performed in what CMS believes was a sub-standard manner. – Past or present feedback from stakeholder groups generates doubts about the prospective AO’s capabilities. – In reviewing the entity’s otherwise complete application, CMS concludes, for instance, that: – ++ Some of the AO’s surveyor personnel are insufficiently experienced in the DMEPOS arena. – ++ The AO’s stated policies for avoiding conflicts of interest are inadequate. – ++ The AO will too frequently apply a CAP to a non-compliant supplier instead of terminating its accreditation.

Notice of Approval/Denial, Public Notice, and Length of Approval (New § 424.58(c)(5) through (7))

Provision citation	Proposed changes
Existing § 424.58 does not address when and how an AO is notified of CMS’ decision to approve or deny its application for approval of its accreditation program.
New § 424.58(c)(5) and (6) CMS proposes to incorporate several procedures in §§ 488.1010(d) and 488.1020 within new § 424.58(c)(5) and (6)	– Under § 424.58(c)(5), CMS would send notice of its decision to the AO within 210 calendar days from the date CMS determines that the AO’s application is complete. The notice would include: (i) the basis for the decision; (ii) if applicable, the effective date of approval; and (iii) if applicable, the length of the approval (not to exceed 6 years). – Under proposed new § 424.58(c)(6), CMS would announce on its website its decision to approve or deny the application. This announcement would be posted within 210 calendar days from the date that CMS determines that the AO’s application was complete. If the application is approved, the posting would also state the approval’s effective date (no later than the notice’s publication date) and length (6 years or less). – CMS proposes to publish the decision on the CMS website rather than in the Federal Register. – CMS proposes propose in new § 424.58(c)(7) that CMS may approve an accreditation program for any period up to a maximum of 6 years.

AO Reapproval Process (New § 424.58(d))

Provision citation	Proposed changes
New § 424.58(d) would outline the procedures involving an AO’s application for reapproval of its DMEPOS accreditation program	– CMS proposes in new § 424.58(d)(1)(i) that except as stated in paragraph (d)(1)(ii), an approved DMEPOS AO that seeks to continue as such must apply for reapproval of accreditation at least 9 months before its current approval term expires. – CMS proposes in § 424.58(d)(1)(ii) that CMS may require AOs to submit reapproval applications under paragraph (d) any time after January 1, 2026, which would be the effective date of our revisions to §§ 424.57 and 424.58. The application would have to be submitted within 60 calendar days of CMS’ submission request; if it is not, CMS terminates the AO’s DMEPOS accreditation approval. – CMS proposes in new § 424.58(d)(2) that as part of its reapproval application submission: the AO would have to furnish all information and statements identified in § 424.58(c)(1); and CMS could request additional information under § 424.58(c)(2).
New § 424.58(d)(3) through (7)	CMS will duplicate proposals in § 424.58(c)(3) through (7)

Ongoing Responsibilities of a CMS-Approved AO (New § 424.58(e))

Provision citation	Proposed changes
Existing § 424.58(c)(1) through (6) outline activities an approved AO must undertake on an ongoing basis.
New § 424.58(e) Submission of Monthly Information, Requested Information, and Immediate Jeopardy Deficiencies Requirements would be with proposed changes	– in the opening paragraph of (c)(1) (which we are redesignating as new paragraph (e)(1)(i)), we propose to change the reference “on a monthly basis” to “no later than the last day of each month.” – existing paragraph (c)(1)(i) requires monthly submission of copies of all accreditation surveys, together with any survey-related information that CMS may require (including CAPs and summaries of findings with respect to unmet CMS requirements). – Paragraph (c)(1)(i) would become new paragraph (e)(1)(i)(A), with the parenthetical in the previous sentence regarding CAPs and summaries constituting new paragraph (e)(1)(i)(A)(1). – In new § 424.58(e)(1)(i)(A)(2), CMS proposes that the required data must include the instances in which the AO had the discretion to perform a survey but elected not to, including the reason(s) behind the AO’s decision. – CMS proposes to delete the requirement in current § 424.58(c)(1)(iii) of monthly notice to CMS regarding complaints. – CMS proposes to add new paragraph (e)(1)(i)(C) that would require monthly notice of resolved deficiencies. – CMS proposes to delete current § 424.58(c)(1)(v) as the question of AO process and standard changes will be addressed more thoroughly in new § 424.58(e)(2). – CMS proposes in new § 424.58(e)(1)(ii) that: – They may at any time request the AO to submit any of the information described in new paragraph (e)(1)(i) or any other data CMS deems necessary to facilitate its oversight of the AO’s accreditation program; and – The AO must furnish this data to CMS within 3 business days of the request.
Existing § 424.58(c)(1)(v) requires the AO each month to notify CMS of any proposed changes to its accreditation standards, requirements, or survey process; the AO cannot implement the change without prior CMS approval.
New § 424.58(e)(2) AO Standard or Requirement Changes (Changes to § 424.58(c)(1)(v), would become new §24.58(e)(2))	– in the opening paragraph of § 424.58(e)(2), incorporating the existing notice requirement in current § 424.58(c)(1)(v) and_ _ – One addition would require the notice to be written. This is current practice, but we wish to include this in regulation. – The other would state that the scope of § 424.58(e)(2) includes the addition, modification, or removal of a DMEPOS product service category to the list of categories for which the AO accredits DMEPOS suppliers. – new § 424.58(e)(2)(i) would require the AO to submit the notice at least 60 calendar days before the proposed change’s intended effective date. Paragraphs (e)(2)(i)(A) and (B) would also require, respectively, the notice to include– – A detailed explanation of the revisions and the rationale for them; and – A detailed crosswalk (in table format) containing the exact language of the AO’s revised accreditation requirements and the applicable Medicare requirements for each. – that CMS would furnish the AO written approval or disapproval of the proposed change within 30 calendar days of the revision’s effective date.

Complaints (New § 424.58(e)(3))

Provision citation	Proposed changes
Paragraphs (e)(3)(i)(A) through (C)	Upon receipt of a complaint, the AO must, respectively– – Provide written notice of the complaint to CMS no later than 5 calendar days after receipt; – In accordance with its existing policies and procedures, perform an initial review of the complaint to determine whether, based on the complaint and any other data, the supplier may be non-adherent to one or more quality standards or other applicable CMS requirement; – Within 21 days after receiving the complaint, conduct a survey of the supplier if the initial review determines that such non-compliance may exist.
New § 424.58(e)(3)(ii)	– The AO – at least 10 calendar days after completing the action in, as applicable, paragraph (e)(3)(i)(B) or (C) – to give CMS written notice of the result of the initial review or, as applicable, the survey – The notice must inform CMS of any action the AO took or intends to take regarding the supplier, such as a termination of accreditation or imposition of a CAP

CAPs (New § 424.58(e)(4))

Provision citation

Proposed changes

New § 424.58(e)(4)(i), (ii), and (iii)

The AO must give CMS written notice of any decision to apply a CAP to a particular supplier no later than 10 calendar days after its decision. The notice must include—
– The reason for the decision;
– A detailed explanation and justification as to why the AO imposed a CAP instead of, as applicable, denying or terminating the supplier’s accreditation; and
– The terms of the supplier’s CAP (for example, deadline for compliance, the AO’s plans for enforcement and ensuring compliance)

Accreditation Denials and Terminations (New § 424.58(e)(5))

Provision citation	Proposed changes
New § 424.58(e)(5)(i)	The AO must give CMS written notice of any decision to deny, terminate, revoke, withdraw, or amend a supplier’s accreditation within 5 calendar days of the decision; the notice must identify the reason for the AO’s determination
§ 424.58 (e)(5)(ii)(A)(1) through *(5)*	An AO must deny or terminate a supplier’s accreditation if– – The supplier fails to meet the licensure requirements in § 424.57(c)(1)(ii); – The supplier is not operational (as that term is defined in § 424.502); – The supplier’s location fails to meet the accessibility requirements in § 424.57(c)(7)(i)(B); – The supplier’s Medicare enrollment is revoked due to non-compliance with one or more DMEPOS quality standards and the reenrollment bar under § 424.535(c) has not expired; or – Directed by CMS.
§ 424.58(e)(7)(i)	Would: (1) include the requirement in proposed § 424.58(c)(1)(xxiii)(G); (2) state that the AO’s submission of concomitant revisions is to ensure continued comparability with the quality standards, survey process, and other requirements; and (3) require the AO to report its proposed changes to CMS no later than 30 days after receiving CMS’ written notice.
New paragraphs (e)(7)(i)(A) through (C)	Would include the data submission elements and formats required in existing § 424.58(c)(2), specifically– – An acknowledgment of CMS’s notification of the change; – A revised crosswalk reflecting the new requirements; and – An explanation of how the AO will modify its standards to conform to CMS’s new requirements within the timeframes outlined in the notice it received from CMS.
New 424.58(e)(7)(ii)	The AO cannot implement its proposed corresponding revisions without CMS approval

Performance of Surveys (New § 424.58(e)(8))

Provision citation	Proposed changes
New § 424.58(e)(8)	Except as otherwise directed or permitted in writing by CMS (for instance, allowing sampling), the AO must perform a survey of all supplier locations for which the supplier seeks accreditation or reaccreditation with the AO
New § 424.58(e)(8)(i)(B)	Require the AO to perform all surveys as unannounced surveys
New § 424.58 (e)(8)(i)(C)	the AO cannot accredit the supplier location before: (1) the survey is conducted; and (2) the AO deems the supplier compliant with the quality standards
New § 424.58(e)(8)(ii)	CMS may, at any time, direct the AO to perform a survey of an accredited supplier or a group
New § 424.58(e)(8)(iii)	when performing a survey, the AO must also confirm that the supplier is licensed in accordance with § 424.57(c)

Surveyor Witnesses (New § 424.58(e)(9))

Provision citation	Proposed changes
New § 424.58(e)(9)	– Current requirements in § 424.58(c)(3) that the AO allow its surveyors to serve as witnesses if CMS undertakes an adverse action against a supplier in response to an accreditation finding. – Consistent with the reorganization of § 424.58, we propose to designate this requirement without change as new paragraph § 424.58(e)(9).

Entrance of Data into System (New § 424.58(e)(10))

Provision citation	Proposed changes
New § 424.58(e)(10)	If directed by CMS, the AO must enter accreditation, survey, product code, and other data into a CMS-designated system

Adverse Actions (New § 424.58(e)(11))

Provision citation	Proposed changes
Proposed under new § 424.58(c)(4)(v) that CMS could deny an AO’s application for approval or reapproval of its accreditation program if the AO, or any AO owner, managing employee, governing body member, surveyor, or health care or administrative or management services personnel has any of the adverse actions specified in § 424.58(c)(4)(v)
New § 424.58(e)(11)	Duplicate this denial reason as a general prohibition against such relationships on an ongoing basis, not simply as part of the AO’s application determination

Continuing Federal Oversight of AOs (New § 424.58(f))

Provision citation	Proposed changes
Existing § 424.58(d) outlines procedures for ongoing review of AOs
Revised § 424.58(d)	CMS evaluates the performance of each CMS-approved DMEPOS accreditation program on an ongoing basis; means of monitoring include, but are not limited to, the reviews identified in such paragraph (f).

Equivalency Reviews (New § 424.58(f)(1))

Provision citation	Proposed changes
An equivalency review involves comparison of the AO’s standards (and the AO’s application and enforcement thereof) to CMS requirements and processes
New § 424.58(f)(1)	CMS may perform an equivalency review at any time; the contingencies in existing (d)(1)(i) through (iii) would not be included in paragraph (f)(1)

Validation Survey of Suppliers (New § 424.58(f)(2))

Provision citation	Proposed changes
*New § 424.58(f)(2)*	Incorporate all provisions regarding validation surveys within new § 424.58(f)(2) rather than continue to have them split (as they currently are) between § 424.58(b)(2) and (d)
*§ 424.58(f)(2)(i)*	CMS may survey suppliers to validate the AO’s survey process
*New § 424.58(f)(2)(ii), (iii), (iv), and (v)*	– CMS does not propose revisions to existing § 424.58(b)(3) through (6), but will designate these as new § 424.58(f)(2)(ii), (iii), (iv), and (v). – Existing § 424.58(b)(3) through (6) use “supplier billing number” which will be changes to “enrollment”

Deficiencies (§ 424.58(f)(3))

Provision citation	Proposed changes
New § 424.58(f)(3)(i)	CMS may define the term “deficiency”, establish levels and categories of deficiencies, and revise the quality standards
New § 424.58(f)(3)(ii)	Requires the AO in its accreditation activities to apply and adhere to: (1) any CMS-established definition of deficiency and categories and levels thereof; and (2) all CMS-established quality standards.

Additional Reviews (§ 424.58(f)(4))

Provision citation	Proposed changes
New § 424.58(f)(4)(i)(A)	Expand upon the reviews addressed in new § 424.58(f)(1) and (2) and permit CMS – at any time and for any reason – to conduct a review of the AO’s processes or performance to– – Validate the AO’s representations to CMS (for example, its statements in new paragraph (c)(1)(xxiii)); or – Assess the AO’s adherence to its own policies and procedures, the provisions of § 424.58, and all other CMS requirements.
New § 424.58(f)(4)(i)(B)	– The scope, length, and timing of the review would lie within CMS’ discretion. Evidence of the AO’s potential noncompliance – with any of the policies and requirements addressed in new § 424.58(f)(4)(i)(A) is not required for CMS to perform a review
New § 424.58(f)(4)(ii)(A) through (H)	– Will list some of the types of reviews that CMS may perform either collectively or individually – Paragraphs (f)(4)(ii)(A) and (B) would respectively reference the reviews in new § 424.58(f)(1) and (2) – Paragraphs (f)(4)(ii)(C) and (D) would reflect two of the previously mentioned reviews in existing § 424.58(d)(2): examining the results of an AO’s surveys of suppliers and observing onsite an AO’s survey of a supplier
New paragraphs (f)(4)(ii)(E) through (H)	Would address the following reviews of the AO’s onsite operations, similar to those for certified providers and suppliers in 42 CFR 488.8(h): – Conducting onsite inspections of the AO’s operations and offices. – Requesting and reviewing documents. – Interviewing AO personnel. – Observing AO internal meetings concerning the accreditation process

Terminations of CMS-Approved AO Accreditation Programs (New § 424.58(g) and (h))

Provision citation	Proposed changes
Voluntary Terminations New § 424.58(g)(1)	An AO may voluntarily terminate its CMS-approved DMEPOS accreditation program at any time. In doing so, the AO per paragraphs (g)(1)(i) and (ii), respectively, must– – Inform CMS of its decision no less than 120 calendar days before the termination effective date; and – Provide written notice at least 90 days before the termination effective date to each of its accredited suppliers but not before notifying CMS of its decision under the previous bullet. – The notice to each supplier must– – ++ Describe the provisions in proposed new paragraph (g)(2) (discussed shortly) concerning the expiration dates of the supplier’s accreditation with the terminating AO; and – ++ Inform the supplier that any lapse in its accreditation (including between the date its existing accreditation with the terminating AO expires and the effective date of its accreditation with a different AO) will result in the revocation of its enrollment under § 424.535
New § 424.58(g)(2)	Unless the supplier is otherwise determined to be non-adherent to the quality standards or other accreditation requirements, the supplier’s accreditation with the terminating AO remains effective until the earliest of: (1) the expiration of its current term of accreditation with the terminating AO; and (2) the effective date of its accreditation with a different CMS-approved AO
Involuntary Terminations – Reasons New § 424.58(h)	In new paragraphs (h)(1)(i)(A) through (D) we may terminate our approval of an AO’s accreditation program if CMS determines that– – The AO no longer demonstrates reasonable assurance (as defined in paragraph (b)); – The continued approval of the AO’s accreditation program poses an immediate jeopardy to the patients of the entities accredited under that program or otherwise constitutes a hazard to the public health; – The AO is non-adherent to any provision of § 424.58. This includes, but is not limited to, situations where the AO has failed to comply with– – ++ A term or condition of a statement or agreement in § 424.58(c)(1)(xxiii); or – ++ A policy, procedure, or practice it outlined under paragraph § 424.58(c) as part of its initial or reapproval application or CMS-approved change thereto under § 424.58(e)(2) or (e)(7); or – A pattern or practice exists of the AO’s accredited suppliers being revoked under § 424.535(a) for failing to adhere to the quality standards.
New § 424.58(h)(1)(ii)	CMS could terminate its approval of the AO’s accreditation program effective on the date of the termination notification letter to the AO (described in proposed new paragraph (h)(2)) or any date thereafter
Involuntary Terminations – Processes New § 424.58(h)(2) through (5)	To outline operational procedures for terminating an AO’s approval and to address the consequent impact on suppliers – Under proposed § 424.58(h)(2), CMS would give written notice to the AO of its termination decision. The notice must include the reason for and effective date of the termination. – Under § 424.58(h)(3), and as with AO initial application submissions, CMS would announce its decision (and the effective date thereof) on its website. This would help ensure the public is made aware of the termination as soon as possible. – In § 424.58(h)(4), and so affected suppliers receive individualized notice beyond the CMS website announcement, the terminated AO would have to give written notice of the termination and its implications to each of its accredited suppliers within 30 calendar days after the CMS website announcement. – The notice to each supplier would have to – – Explain the provisions in § 424.58(h)(6) concerning the expiration dates of the supplier’s accreditation with the terminated AO; and – Inform the supplier that any lapse in its accreditation (including between the date its existing accreditation with the terminated AO expires and the effective date of its accreditation with a different AO) results in its enrollment being revoked under § 424.535.
New § 424.58(h)(5) and (6)(i)(A) through (C)	– The terminated AO would have to work collaboratively with CMS to direct its accredited suppliers to the remaining CMS-approved AOs within a reasonable period of time. Unless the suThe terminated AO would have to work collaboratively with CMS to direct its accredited suppliers to the remaining CMS-approved AOs within a reasonable period of time. – Unless the supplier is otherwise determined to be non-adherent to the quality standards or other accreditation requirement, the supplier’s accreditation with the terminated AO remains effective until the earliest of– – ++ The expiration of its current term of accreditation with the terminated AO; – ++ The effective date of its accreditation with a different CMS-approved AO; or – ++ A date specified by CMS based on the circumstances of the termination of the AO’s approval.
New § 424.58(h)(7)	The terminated AO must refund to a supplier all payments the latter made to the AO in accordance with the supplier’s request for accreditation or reaccreditation but before the AO notified the supplier of its final determination regarding the supplier’s request

AO Suspensions and Probations (New § 424.58(i) and (j))

Provision citation	Proposed changes
Suspension
New § 424.58(i)	– CMS would have the ability to suspend an AO’s accreditation program. – Under paragraph (1)(i), suspension could occur if we determine that the AO no longer demonstrates reasonable assurance (as defined in paragraph (b)) or is non-compliant with any provision of § 424.58. – The non-compliance can include, but is not limited to, situations where the AO has failed to– – Comply with a term or condition of a statement or agreement in § 424.58(c)(1)(xxiii); or – Adhere to a policy, procedure, or practice it outlined under § 424.58(c) as part of its initial or reapproval application or a CMS-approved change thereto under § 424.58(e)(2) or (e)(7). – CMS may suspend the AO’s accreditation program if there is a pattern or practice of the AO’s accredited suppliers being revoked under § 424.535 for failing to comply with the quality standards.
New § 424.58(i)(2)	– Would outline a suspension’s components. Paragraph (i)(2)(i) would state that except as otherwise specified or permitted by CMS, the AO could not conduct any DMEPOS accreditation activities while suspended. – Paragraph (i)(2)(ii), meanwhile, would state that– – CMS determines the length of the suspension, which would be a maximum of 1 year; and – Upon the expiration of the suspension period, CMS either lifts the suspension or terminates the AO’s approval.
New § 424.58(i)(3)	CMS sends written notice of the suspension decision to the AO. The notice would include the reason(s) for, the effective date of, the length of, and the terms of the suspension (for instance, application of a CAP; whether the AO may perform certain functions during the suspension; etc.), as well as the steps the AO must take to have the suspension lifted.
New § 424.58(i)(3)	To confirm that the AO received the notice, the AO must notify CMS of this in writing within 3 calendar days of receipt.
§ 424.58(i)(3)(iii)	No later than 3 calendar days after CMS receipt of the acknowledgement, they would post on its website a notice of the suspension.
§ 424.58(i)(4)	Would address the status of the suspended AO’s accredited suppliers.
§ 424.58(i)(4)(i)(A) through (C)	If the AO’s accreditation program is suspended, the accreditation status of its suppliers remains effective through the length of the suspension unless– – The supplier’s current term of accreditation with the suspended AO expires during the suspension; – The supplier is otherwise determined to be non-adherent to the quality standards or other accreditation requirement; or – CMS specifies a different accreditation termination date based on the circumstances of the suspension of the AO’s accreditation program.
New paragraph § 424.58(i)(4)(ii)(A)	If paragraph (i)(4)(i)(A) applies, the supplier must be reaccredited by: (1) its AO if the latter’s suspension has been lifted; or (2) a different CMS-approved AO
New paragraph § 424.58(i)(4)(ii)(B)	If paragraph (i)(4)(i)(C) applies, CMS notifies the affected supplier in writing of the deadline by which the supplier must be reaccredited
New § 424.58(i)(4)(iii)	Would reiterate that any lapse in the supplier’s accreditation results in the supplier’s revocation of enrollment. Both (i)(4)(ii) and (iii) are intended to help ensure there are no gaps in the supplier’s accreditation status under § 424.58.
New § 424.58(i)(5)	Would address the circumstances under which a suspension is lifted and the processes associated therewith. In paragraphs (i)(5)(i)(A) through (C), respectively, we propose that CMS would lift a suspension if all of the following are met: – The reasons for it no longer exist. – The AO demonstrates reasonable assurance (as defined in paragraph (b)). – The AO is in compliance with all provisions of § 424.58.
§ 424.58(i)(5)(ii)	If the suspension is lifted, CMS would– – Send the AO written notice that the suspension has been lifted; – Require the AO to notify CMS in writing of its receipt of the notice within 3 calendar days of such receipt; and – No later than 3 calendar days after receipt of the AO’s acknowledgement, publish on its website a notice of the lifting of the AO’s suspension and the reasons for it.
New § 424.58(i)(6)	– Duplicate proposed paragraph (h)(7) regarding refunds. Irrespective of whether a termination or a suspension is involved, our concern remains the same: the potential for the AO to retain payments for a service it did not fully furnish. – The suspension would not be lifted before all required refunds to suppliers under paragraph (i)(6) have been paid.
New § 424.58(i)(7)	Nothing in paragraph (i) would prohibit CMS from suspending an AO’s accreditation program more than once.
Probation
New § 424.58(j)	Establishes a process for placing an AO’s accreditation program on probation in lieu of a termination or suspension
New § 424.58(j)(1)	CMS has the discretion to place an AO’s accreditation program on probation and require its successful completion of a CAP in the following instances- – CMS determines that the DMEPOS accrediting organization no longer demonstrates reasonable assurance (as defined in paragraph (b) of this section). – CMS determines that the AO is non-compliant with any provision of § 424.58. This could include the terms, conditions, procedures, etc., described in proposed new paragraphs (h)(1)(i)(C) and (i)(1)(ii). – CMS determines that there is a pattern or practice of the AO’s accredited suppliers being revoked under § 424.535 for not complying with the quality standards. – The suspension period for the AO under paragraph (i) has expired and CMS determines that a subsequent probationary period and associated CAP are warranted.
New § 424.58(j)(2)(i)	CMS would give the AO written notice of its decision to place it on probation. To ensure that the AO understands the basis for and the particulars of the probation, the notice would include— – The reason(s) for CMS’ decision; – The length of the probationary period, which would not exceed 1 year; – The CAP’s terms; – The requirements and deadline for achieving compliance; and – An explanation of how CMS would monitor the AO’s efforts to resume adherence under the CAP (for example, performing reviews under paragraph (f)).
New § 424.58(j)(2)(ii)	Except as otherwise prescribed in the CAP, the AO could continue its accreditation activities as normal.
New § 424.58(j)(3)(i)	When the probationary period concludes, CMS would notify the AO in writing of– – Whether the AO is in compliance with all requirements of § 424.58; – The reason for the determination in the previous bullet; and – The consequences of the determination (for example, termination or suspension of accreditation, successful completion of and cessation of the probationary period and CAP).
New § 424.58(j)(3)(ii)	CMS may may send this notice, terminate the probationary period, and end the CAP prior to the end of designated probationary period if we determine that the AO is again compliant, for this would eliminate the continued need for the probation and CAP.

CMS Discretion, Change in Non-Compliance Actions (New § 424.58(k))

Provision citation	Proposed changes
New § 424.58(k)(1)	CMS could impose an action in § 424.58(h), (i), or (j) in lieu of another such action in paragraph (h), (i), or (j) if the same ground(s) for either exists.
New § 424.58(k)(2)	Would state that CMS could terminate– – An AO’s probation (either before or in accordance with the probationary period’s original expiration date) and impose a suspension or termination if a ground for either of the latter actions exists; or – An AO’s suspension (either before or in accordance with the suspension’s original expiration date) and impose a termination if a basis for termination exists.

Reconsiderations and Rebuttals (New § 424.58(l))

Provision citation	Proposed changes
*Denials and Involuntary Terminations*
Current § 424.58(e)(1) outlines the reasons for which an AO may file a written request for reconsideration of a CMS determination that the AO does not provide reasonable assurance that the suppliers it has accredited meet the quality standards. The procedures of the reconsideration process are outlined in § 424.58(e)(2) through (9).
New § 424.58(l)	– CMS would remove all these reconsideration provisions from § 424.58 and, in new § 424.58(l) instead utilize the reconsideration processes in 42 CFR part 498 for denied and involuntarily terminated AOs. – The AO could request a reconsideration under part 498 of any of these three initial determinations.
Section 498.3	– Section 498.3(b) lists situations in which CMS makes an initial determination. – CMS would add new paragraphs (b)(21) and (22) to § 498.3. The former would include denials under paragraph (c)(4) or (d)(4). The latter would include involuntary terminations under paragraph (h)(1).
Suspensions and Probationary Periods
New § 424.58(l)(2)	Would outline the procedures via which an AO may rebut a CMS determination to suspend or place on probation its DMEPOS accreditation program.
New § 424.58(l)(2)(i)(A)	If an AO receives notice from CMS that its DMEPOS accreditation program has been suspended or placed on probation, the AO has 15 calendar days from the date of such notice to submit a rebuttal to CMS.
New § 424.58(l)(2)(i)(B)	CMS may, at its discretion, extend the 15-day time-period referenced in paragraph (l)(2)(i)(A).
New § 424.58(l)(l)(2)(ii)(A) through (D)	Any rebuttal must– – Be in writing; – Identify the facts or issues about which the AO disagrees with CMS’ determination, including the reasons for disagreement; – Include all documentation the AO wants CMS to consider in its review of its determination; and – Be submitted in the form of a letter that is signed and dated by the AO’s CEO (or similar official with authority to commit the organization to adhere to Medicare laws and regulations) or a legal representative (as defined in 42 CFR 498.10).
§ 424.58(l)(l)(2)(iii)	– The AO’s failure to submit a timely and compliant rebuttal would constitute a waiver of all rebuttal rights under paragraph (l)(2). – The provision would specify the consequences of an untimely or non-compliant rebuttal.
§ 424.58(l)(l)(2)(iv)	Upon receipt of a timely and compliant AO rebuttal, CMS reviews it to determine whether the imposition of the suspension or probation was correct.
§ 424.58(l)(l)(2)(v)	CMS would not be required to delay the imposition of the suspension or probation pending the completion of CMS’ review of the rebuttal.
New § 424.58(l)(l)(2)(vi)	CMS determination made under paragraph (l)(2) would not be an initial determination under § 498.3(b) and therefore, would not be appealable.

Consulting (New § 424.58(m))

CMS issued a February 15, 2024, proposed rule addressing several topics regarding certified provider/supplier accreditation. Consulting services provided by AOs, their consulting divisions, or separate business entities to Medicare-participating health care facilities.

Provision citation	Proposed changes
New § 424.58(m)(1)	CMS would define the terms “consulting” and “consulting services” as services furnished by a DMEPOS AO (or by its consulting division or separate business entity (such as a company or corporation) that furnishes such services) for the review of a DMEPOS supplier’s standards, processes, policies, and functions for compliance with the AO’s standards, the DMEPOS quality standards, or other Medicare requirements through simulation of a real survey, such as a mock survey, with comprehensive written reports of findings and early intervention and action to correct deficiencies prior to an actual accreditation survey. (Includes paid and unpaid)
New § 424.58(m)(2)(i) though (iii)	– Except as provided in proposed § 424.58(m)(3), an AO or its consulting division or separate business entity (such as a company or corporation that provides consulting) may not provide consulting services in the following instances: – To any new supplier before the completion of the initial accreditation survey, meaning the first survey of a supplier that has not previously received accreditation services from that AO. – If a supplier is later voluntarily or involuntarily terminated from that AO’s services and thereafter retains the services of that same AO or a new one, the first survey of that supplier by the same or new AO would be considered an initial accreditation survey. – To a supplier the AO accredits within 6 months prior to the supplier’s next scheduled re-accreditation survey. A re-accreditation survey would be any subsequent accreditation survey the AO performs after the initial survey. – To a supplier to which the AO furnishes accreditation services, in response to a complaint the AO receives concerning that supplier.
§ 424.58(m)(3)(i) though (iv)	CMS proposes the following four situations – which the February 15, 2024, proposed rule also addressed — where an AO, its consulting division, or separate business entity may provide consulting services to the suppliers it accredits. – during the 6-month period after an initial or re-accreditation survey is performed – CMS or its contractor receives and investigates complaints about an AO’s accredited supplier where an immediate jeopardy deficiency or basis for revocation of enrollment under § 424.535 is identified; the consulting may occur only after the investigation is completed and can only address those issues identified in the investigation. – Consulting services provided to suppliers that the AO does not accredit at the time the services are furnished. – General education the AO furnishes about its accreditation program.
§ 424.58(m)(4)	The AO must furnish to CMS upon CMS’ request and with each initial and reapproval application under paragraphs (c) and (d) of this section, a report containing the following information: – Whether the AO or an associated consulting division or company the AO has established furnishes consulting services. – The names, National Provider Identifiers, and addresses of all suppliers to which the AO or its associated consulting division or company has furnished consulting services during the prior 6-month timeframe. – The dates such services were provided to each supplier. – Whether the AO has ever furnished, or is currently furnishing, accreditation services to any supplier identified in the report. – For each supplier listed in the report, the dates of: (1) its most recent accreditation survey; and (2) the next re-accreditation survey due to be performed. – A description of the consulting services provided to each supplier in the aforementioned report.
§ 424.58(m)(4)	The DMEPOS AO, its consulting division, or separate business entity must have and comply with the following written consulting policies and Procedures, minimally as follows: – The AO’s consulting services must be furnished by a separate division of the AO or separate business entity (such as a company or corporation) that is separate from the AO’s accreditation division. – The AO’s consulting division or separate business entity must maintain separate staff from that of the AO’s accreditation divisions to ensure that– – ++ The consulting division personnel do not conduct the AO’s accreditation division functions; and – ++ The AO’s accreditation division staff do not conduct consulting division functions. – An AO’s accreditation staff and surveyors are prohibited from marketing the AO’s consulting services to the AO’s accreditation clients.
§ 424.58(m)(5)(ii)	An AO that provides consulting services must submit its written consulting firewall policies and procedures to CMS by a date specified by CMS and with each application for initial approval or reapproval.

Other Relationships Involving Potential Conflicts of Interest (New § 424.58(n))

The February 15, 2024, proposed rule not only addressed consulting services but also noted relationships between AO officials and the suppliers the AO accredits.

Provision citation	Proposed changes
AO/Supplier Relationships
§ 424.58(n)(1)(i)	If an AO owner, surveyor or employee (currently or within the previous 2 years) has or had an interest in or relationship (as described in proposed § 424.58(c)(1)(vii)(D)) with a DMEPOS supplier accredited by the AO, the AO owner, surveyor, or employee is not permitted to— – Participate in the survey of that DMEPOS supplier; – Have input into the results of the survey and accreditation for that DMEPOS supplier; – Have involvement with the pre-or post-survey activities for that DMEPOS supplier; or – Have contact with or access to the records for the survey and accreditation of that DMEPOS supplier.
§ 424.58(n)(1)(ii)	For purposes of new paragraph (n)(1), the term “immediate family member” would have the same meaning as that in paragraph (b). (CMS defined “immediate family member” in § 424.58(c)(1)(vii)(D) to help explain some of the conflict-of-interest affiliations that fall within that paragraph)
§ 424.58(n)(1)(iii)	CMS may request any and all of this information at any time outside of the initial approval and reapproval processes. (Per proposed § 424.58(c) and (d), the conflict-of-interest information described in § 424.58(c)(1)(vii)(D) must be furnished with the DMEPOS AO’s initial and reapproval applications)

CMS prepared the following table which identifies three sets of our proposed provisions that, to varying degrees, duplicate certain provisions in the February 15, 2024, proposed rule but contains several notable differences.

Provision	Proposed AO DMEPOS Rule	February 15, 2024, Proposed Rule	Differences
Definition of unannounced survey	See proposed 424.58(b)	Same as proposed 424.58(b)	Only difference is change from “facility” to “DMEPOS supplier” in proposed 424.58(b) (which only applies to DMEPOS suppliers)
Consulting	Prohibit all consulting services by an AO and its associated consulting divisions or companies to any DMEPOS to which the AO provides accreditation services: (1) prior to an initial accreditation survey; and (2) within 6 months of the next scheduled reaccreditation survey.	Prohibit all fee-based consulting services by an AO and its associated consulting divisions or companies to any health care provider or supplier to which the AO provides accreditation services: (1) prior to an initial accreditation survey; and (2) within 12 months of the next scheduled reaccreditation survey.	DMEPOS timeframe is 6 months instead of 12 months due to the proposed annual reaccreditations. So as to not hinder otherwise legitimate consulting arrangements, DMEPOS restrictions limited to situations involving mock surveys performed by an AO. DMEPOS prohibitions would not be limited to “fee-based” consulting. It is the consulting service itself and the impact it could have on the survey’s integrity – rather than whether compensation is involved – that is our central concern
Conflict-of-Interest (COI)	AO submission of COI policies with each initial and reapproval application and upon CMS request	AO submission of COI policies with each initial and reapproval application	More infrequent submissions would reduce burden

Provision citation	Proposed changes
NPE/AO Relationships
NPEs (of which there are two nationwide) process DMEPOS Form CMS-855S enrollment applications. This involves, for example, (1) verifying the data the supplier furnished on or with the application; (2) performing a site visit; and (3) ensuring the supplier meets all Medicare requirements.
New § 424.58(n)(2)	An entity may not serve as a CMS-approved DMEPOS AO if it is currently a CMS contractor — or an owner or subsidiary thereof (regardless of the ownership percentage involved). — with any oversight responsibility of DMEPOS suppliers
Opportunity to Comment: CMS solicits comment on whether this prohibition should extend to situations where, similar to paragraph (n)(1), there are familial relationships between owners and employees of DMEPOS AOs and the CMS contractor — for instance, whether an organization should be prohibited from being a DMEPOS AO if it has owners or employees who are immediate family members of NPE owners or employees.

AO Changes of Ownership (New § 424.58(o))

Provision citation	Proposed changes
Section 488.5(f) contains robust procedures for when an AO undergoes a change of ownership (as that term is defined in § 489.18(a)(1) through (3)). They address matters such as: (1) the notice and accompanying information and acknowledgments the AO must furnish to CMS; and (2) the impact on the AO’s accredited providers and suppliers. However, § 424.58 contains no process for AO ownership changes.
§ 424.58(o)	The same cross-referencing approach in new § 424.58(o), under which DMEPOS AO changes of ownership would be governed by § 488.5(f).

Requirement for Suppliers to be Accredited (Revisions to § 424.57)

Provision citation	Proposed changes
§ 424.57 primarily addresses conditions of payment and supplier standards that suppliers must meet to enroll in and bill Medicare. Yet it also addresses accreditation requirements for DMEPOS suppliers; specifically, § 424.57(c)(22) states that these suppliers and all of their locations must be accredited by a CMS-approved AO to receive and retain a supplier billing number.
Requirement of Survey § 424.57(c)(23)	Remove the latter statement from § 424.57(c)(23) because it contradicts proposed § 424.58(e)(8)(i)(A) and (C). These two paragraphs state, respectively, that unless CMS otherwise directs or permits in writing, the AO: (1) must survey all suppliers seeking accreditation or reaccreditation; and (2) cannot accredit the supplier before the survey is conducted and the AO concludes that the supplier is adherent to the quality standards.
§ 424.57(c)(22) and (24) Accreditation Frequency	Section 424.57(c)(24) states that all DMEPOS supplier locations, whether owned or subcontracted, must meet the quality standards and be separately accredited in order to bill Medicare.
§ 424.57(c)(22) (1) Structural Change	CMS moved the current language in § 424.57(c)(24) to § 424.57(c)(22). Revised § 424.57(c)(22) would state the following: – All DMEPOS suppliers and all of their locations (whether owned or subcontracted) must meet the quality standards and be separately accredited to enroll in and bill Medicare. – The accreditation must indicate the products and services for which the supplier is accredited in order for the supplier to receive payment for those products and services. (This language is in current § 424.57(c)(22).) – An accredited supplier’s enrollment may be denied or revoked if CMS determines that it is non-compliant with the quality standards. (This language is currently in § 424.57(c)(24).) (2) Accreditation Periods (Revised § 424.57(c)(24)) – Part 488 contains several provisions regarding the frequency with which surveys must be performed.
§ 424.57(c)(24)	DMEPOS suppliers must be surveyed and reaccredited at least once every 12 months.
Changes in Majority Ownership and the “36-Month Rule” New § 424.551	Would mirror the provisions of existing § 424.550(b)(1) such that a DMEPOS supplier undergoing a CIMO must enroll as a new DMEPOS supplier and be newly accredited and surveyed under § 424.58. Would include following: – Duplicate § 424.502’s definition of change in majority ownership within § 424.551 (though slightly tailored to apply to DMEPOS suppliers). – Revise § 424.540(a)(8) to state that CMS can deactivate the enrollment of a seller of a DMEPOS supplier if the supplier undergoes a CIMO in accordance with § 424.551. (As noted in section VI.A. of this proposed rule, § 424.540(a)(8) currently includes HHAs, and CMS are proposing to include hospices therein, too.) – Add new paragraph (h) to § 424.57 to emphasize that a DMEPOS supplier must comply with the provisions of § 424.551 if it undergoes a CIMO. (This would help link § 424.57 to § 424.551.)
§ 424.550(b)(2)(ii) through (iv)	CMS would duplicate existing § 424.550(b)(2)(ii) through (iv) as exceptions within proposed new § 424.551, though current § 424.550(b)(2)(i) would not be mirrored because DMEPOS suppliers do not submit cost reports.

Solicitation of Comments

CMS is particularly interested in receiving comments on the following topics addressed in this proposed rule:

The amount and types of additional information that AOs would have to submit with their initial and reapproval applications per new § 424.58(c) and (d). For instance–

++ Whether there is data we are proposing to collect that is unnecessary, superfluous, or duplicative of other requested information; and
- ++ Whether there is information that should be submitted beyond what we are proposing to require.
- Whether there are any grounds beyond those proposed at § 424.58(e)(5) for which the AO should be required to deny or terminate a supplier’s accreditation and, if so, what those grounds are.

The requirement in proposed § 424.58(e)(8)(i) that, except as otherwise directed or permitted by CMS, the AO perform a survey of all suppliers seeking accreditation or reaccreditation with the AO.

Whether there are any grounds beyond those listed in § 424.58(h), (i), and (j) for which CMS should be able to, respectively, terminate, suspend, or place on probation the AO’s accreditation program and, if so, what those grounds are.

Whether DMEPOS suppliers should be surveyed and reaccredited under § 424.57(c)(24) less frequently than every 12 months and, if so, what the survey and reaccreditation timeframe should be.

Proposed Exemption Process for Prior Authorization of Certain DMEPOS Items (§ 414.234(c)(1) and (c)(1)(ii))

Prior authorization for certain DMEPOS items ensures that Medicare beneficiaries continue to receive medically necessary items while protecting the Medicare Trust Funds from improper payments, and at the same timekeeping the medical necessity documentation requirements unchanged for suppliers.

Provision citation	Proposed changes
§ 414.234(c)(1)	Would add language that provides additional specificity for the exemption process in § 414.234(c)(1)(ii).
New § 414.234(c)(1)(ii)(A)	– Would exempt a supplier from the prior authorization upon demonstration of compliance with Medicare coverage, coding, and payment rules and that this exemption would remain in effect until CMS withdraws the exemption. – Would exempt suppliers that achieve a prior authorization provisional affirmation threshold of at least 90 percent during an initial or periodic assessment. – Would withdraw an exemption if evidence becomes available, based on a review of claims, that the supplier has begun to submit claims that are not payable based on Medicare’s billing, coding or payment requirements.
§ 414.234(c)(1)(ii)(B)	– Would provide 60-day notice of an exemption from mandatory prior authorization requirements. – To provide 60-day notice if an exemption is withdrawn, to give the supplier time to begin submission of prior authorization requests, in compliance with mandatory requirements.
Opportunity to Comment: CMS is soliciting comments on these proposals.

DMEPOS Competitive Bidding Program

Determining Payment Amounts and the Number of Contracts Awarded for the DMEPOS CBP

CMS proposes to make modifications to the process for selecting the number of contract suppliers sufficient to furnish items and services in a competition and the methodology for establishing SPAs for lead and non-lead items. We also propose, in lieu of self-reported supplier capacity, to estimate supplier capacity in accordance with 42 CFR414.414(e)(2) using data on actual contract supplier capacity from previous rounds of the DMEPOS CBP.

They also propose to revise the regulations to include the methodologies described previously for determining the number of contract suppliers needed for each competition, we are proposing to indicate that this number can be no lower than 2 for any competition as the statute mandates multiple contract suppliers (at least 2), per section 1847(b)(4)(B) of the Act.

Opportunity to Comment: CMS is soliciting comments on these proposals.

Projecting Demand for Items and Services and Estimating Supplier Capacity for Furnishing Items and Services

CMS aim to limit the number of contract suppliers to ensure they are incentivized to submit a competitive bid. They state that certain changes to how CMS determines the number of awarded contracts and changes to the SPA methodology can increase the likelihood that the DMEPOS CBP program will generate savings.

Options for Determining Single Payment Amounts (SPAs)

Current methodology is for determining SPAs is extensively reviewed in the proposed rule and providers are strongly encourage to review the detail in section Determining Payment Amounts and the Number of Contracts Awarded for the DMEPOS CBP to understand current and proposed methodology and to respond to CMS request for comments. CMS is looking at new options to determine SPA’s as follows:

SPA	Tradeoffs
Median bid	– Highest number of winners and choice of contract suppliers and lowest risk of outlier prices – Approximately half of winning contract suppliers with bid amounts below SPA
75^th Percentile	– Lower number of winners and greater risk of outlier prices than median bid option – More contract suppliers paid at or above their bid amount than median bid option
Maximum bid	– Lowest number of winners and greatest risk of outlier prices – All contract suppliers paid at or above their bid amount

75^th Percentile option – this option uses the bid amount in the array of winning bid amounts that is halfway between the median of the winning bid amounts (50th percentile) and maximum winning bid amount (100th percentile) to establish the SPA, and, therefore, serves a “middle ground” option. This option would be coupled with an approximate 25 percent reduction in the number of contracts awarded below past bidding rounds. It results in more contracts and less risk of outlier prices than the maximum winning bid option, but fewer contracts and more risk of outlier prices than the median bid option. It is also an option that has never been attempted under the DMEPOS CBP. In order for this option to enable the DMEPOS CBP to meet its statutory objectives, the number of contracts awarded must be reduced by approximately 25 percent from the current methodology so that total payments to contract suppliers based on SPAs equal to the 75th percentile of winning bid amounts are no greater than total payments to contract suppliers based on SPAs equal to the median (or 50th percentile) of winning bid amounts.

Opportunity to Comment: CMS is soliciting comments on:

A proposal that this methodology replace the current maximum bid methodology in the regulations for calculating the SPAs for items and services under the CBP.

A proposal to increase the number of contracts awarded to double the number of contract suppliers that previously furnished at least 5 percent of the items and services needed in the competition.
- Change the methodology for calculating the number of contract suppliers sufficient to furnish items and services in a competition by revising § 414.414(h).

The Median and Maximum Bid options in addition to the 75^th Percentile options for Determining SPAs.
- Revise § 414.416(b)(1) to indicate that in cases where there is an odd number of winning contract suppliers and the 75th percentile falls between 2 suppliers, the SPA for the lead item would be determined by going 75 percent of the way between the 2 bid amounts, rounded to the nearest cent.
- Change the way the SPAs are calculated for the non-lead items in a product category in CBAs other than a nationwide or regional CBA by revising § 414.416(b)(3).

The proposal to change the way the SPAs are calculated for the non-lead items in a product category.
- Change the methodology used for determining SPAs for lead items under the program by revising § 414.416(b)(1) to replace “maximum bid” with “75th percentile of bids,” so that the SPA for the lead item in the product category would be based on the 75th percentile of bid amounts for the lead item that are equal to or below the pivotal bid for the product category.

A proposal to slightly modify versions of the methodology discussed previously for determining the number of contracts to award for product categories that have not previously been included under the DMEPOS CBP.

Adjustments to SPAs

CMS proposes to apply an annual update factor to SPAs as we believe it would give bidding entities more certainty and confidence in formulating their bids based on their costs at the time of bidding, and would help ensure beneficiary access in the event that costs do increase

significantly during a contract performance period. They believe that adding an annual update factor would address unforeseen changes and inflation, giving bidding entities more certainty and confidence in formulating their bids based on their costs at the time of bidding. CMS believes this would reduce burden for bidding entities since they would no longer need to factor standard inflationary cost increases into their bid calculation.

Opportunity to Comment: CMS is soliciting comments on this proposal.

Provisions of the Proposed Regulation

Provision citation	Proposed changes
42 CFR 414.408	– Amend by revising paragraph (b) and its title to adjust the SPAs for the second and third years of a DMEPOS CBP supplier contract performance period by an inflation update equal to the percentage change in the CPI-U for the 12-month period ending 6 months prior to the beginning of the respective second or third year of the DMEPOS CBP supplier contract performance period. – In no case could the updated SPA for an area be greater than the unadjusted fee schedule amount for the state or area that includes the CBA where the SPA is applied or 110 percent of the adjusted fee schedule amount for state or area that includes the CBA where the SPA is applied.
Opportunity to Comment: CMS is soliciting comments on this proposal.

Bid Limits and Conditions for Awarding Contracts if Savings are Not Expected

Provision citation	Proposed changes
Section 1847(b)(2)(A)(iii) of the Act	In determining whether the total amounts to be paid to contractors in a CBA are expected to be less than the total amounts that would otherwise be paid, in accordance with section 1847(b)(2)(A)(iii) of the Act, that CMS would not award a contract under the DMEPOS CBP if CMS determines the total amount paid under the DMEPOS CBP would be greater than all payments that would otherwise be made—inclusive of payments made pursuant to improper billing and any other expenses paid under the DMEPOS fee schedules.
42 CFR 414.414(f)	To modify what circumstances CMS would not award a contract for a competition
42 CFR 414.412	Modify the maximum bid amounts allowed for bids.
Limits on SPAs 42 CFR 414.414(f)	Modify to specify that a contract would not be awarded for a competition if the SPA for the lead item would be greater than the lesser of 110 percent of the adjusted fee schedule amount for the lead item, if applicable, or 100 percent of the unadjusted fee schedule amount for the lead item.
Submission of bids 42 CFR 414.412(b)(2)	Specify that the bid submitted for each lead item and product category included under the DMEPOS CBP for the first time must not exceed the unadjusted fee schedule amount for the lead item.
42 CFR 414.412(b)	– Require that the bid submitted for each lead item and product category must not exceed, for the same CBA, the lesser of the most recent SPA for the item plus 10 percent or the unadjusted fee schedule amount for the item. – The inflation adjustment factor would be based on the percentage change in the Consumer Price Index for all Urban Consumers (CPI-U) from the mid-point of the 12-month period that the most recent SPA was in effect to the date that is 6 months prior to the date CMS announces the dates suppliers may register and submit bids under the applicable round of competition. – The bid submitted for each lead item and product category included in a prior competition but made under a bid for a new CBA must not exceed the lesser of the adjusted fee schedule amount for the lead item plus 10 percent or the unadjusted fee schedule amount for the lead item. – To add 10 percent to the adjusted fee schedule amount for the lead item in this case since the adjusted fee schedule amounts are the amounts that would otherwise be paid and are based on SPAs from previous competitions. – To establish a nationwide or regional CBA(s) for items such as OTS back braces and OTS knee braces to be phased in at some point in the future. – Amend 42 CFR 414.412(b) to establish bid limits for OTS back braces and OTS knee braces for the first time they are phased in as the lead item in a product category under a nationwide or regional CBA(s). OTS back braces and OTS knee braces were included under the DMEPOS – CBP in over 100 CBAs from 2021 through 2023 with SPAs calculated using maximum winning bid amounts. – The bids submitted for an OTS back brace, or an OTS knee brace included as a lead item in a product category in a nationwide or regional RID CBP for the first time cannot exceed the average of the nonrural fee schedule amounts that would otherwise apply to the item under subpart D of this part for the areas included in the nationwide or regional CBP. – Propose a “fail-safe” to ensure that the bid limit would never exceed the unadjusted fee schedule amount.
Opportunity to Comment: CMS is soliciting comments on these proposals.

Provisions of the Proposed Regulation

Provision citation	Proposed changes
42 CFR 414.412(b)(2)	This paragraph would apply to items included under the DMEPOS CBP for the first time, and to streamline the text by deleting the references to the application of §§ 414.210(g), 414.105, and 414.1690.
42 CFR 414.412(b)(b)(3) through (b)(5) as (b)(6)	Renumber paragraphs (b)(3) through (b)(5) as (b)(6) through (b)(8). Add a new paragraph (b)(3) to set the bid limit for items that have been previously included under a competition for the same CBA with a SPA used to pay contract suppliers as the lesser of the most recent SPA plus 10 percent or the unadjusted fee schedule amount for the item.
New 42 CFR 414.412(b)(4)	To specify that if it has been more than one year since the most recent SPA was last paid, the amount under (b)(3) would be adjusted by the percentage change in the CPI-U from the mid-point of the 12-month period the most recent SPA was in effect to the date that is 6 months prior to the date CMS announces the dates suppliers may register and submit bids under the current round of competition.
New 42 CFR 414.412(b)(5)	To set the bid limit for items that have been previously included under the DMEPOS CBP but are being phased into a CBA where the items have never been bid as the adjusted fee schedule amount for the lead item plus 10 percent.
New 42 CFR 414.412(b)(9)	The bid amounts submitted for rental of class II continuous glucose monitors included as a lead item in a product category in a RID CBP for the first time must not exceed the payment amount that would otherwise apply to the monthly fee schedule amount for the supplies for the class II continuous glucose monitor under subpart D of this part plus the average of the purchase fee schedule amounts that would otherwise apply to the class II continuous glucose monitor for the areas included in the RID CBP divided by 60.
New 42 CFR 414.412(b)(10)	The bid amounts submitted for rental of insulin infusion pumps included as a lead item in a product category in a RID CBP for the first time must not exceed the nonrural adjusted fee schedule amount that would otherwise apply to the supplies and accessories for the insulin infusion pump under subpart D of this part for a 1-month period plus the total nonrural adjusted rental fee schedule amounts that would otherwise apply to the rental of the insulin pump for 13 months of continuous use under subpart D of this part divided by 60.
New 42 CFR 414.412(b)(11)	The bid amounts submitted for an OTS back brace or OTS knee brace included as a lead item in a product category in a RID CBP for the first time cannot exceed the average nonrural payment amount that would otherwise apply to the item under subpart D of this part, with the application of § 414.210(g), for the areas included in the RID CBP.
New 42 CFR 414.412(b)(12)	The bid amounts submitted for all other items included as a lead item in a product category in a RID CBP for the first time must not exceed the average payment amount that would otherwise apply to the item under subpart C, D, or Q of this part for the areas included in the RID CBP.
42 CFR 414.414(f)	Contracts cannot be awarded for a competition unless CMS determines the SPA to be paid to contract suppliers for the lead item would be no greater than the lesser of 110 percent of the adjusted fee schedule amount for the item, if applicable, or the unadjusted fee schedule amount for the lead item.
Opportunity to Comment: CMS is soliciting comments on these proposals.

Revising the Definition of “Item” Related to Medical Supplies

CMS proposes to facilitate the statutorily mandated expansion of the competitive bidding program by clarifying the definition of “medical equipment items”, to include ostomy, tracheostomy, and urological supplies.

Provisions of the Proposed Regulation

Provision citation	Proposed changes
Section 1861(m)(5) of the Act	The medical equipment set forth at section 1861(m)(5) of the Act, namely home health medical supplies (including catheters, catheter supplies, ostomy bags, and supplies related to ostomy care, and certain covered osteoporosis drugs) be included in the list of items CMS may subject to the DMEPOS CBP.
§ 414.402(6)	To add equipment described in section 1861(m)(5) of the Act, including ostomy, tracheostomy, and urological supplies to the definition of “Item”.
§ 414.408(g)(6)	To specify medical equipment, including ostomy, tracheostomy, and urological supplies are purchased items for which the SPA is calculated based on the bids submitted and accepted.
Opportunity to Comment: CMS is soliciting comments on these proposals.

Remote Item Delivery (RID) CBP

CMS proposes to establish definitions for “remote item delivery CBP” and “remote item delivery item.” A remote item delivery CBP is like a mail order CBP except that items furnished on a non-mail basis would not be excluded from the remote item delivery CBP as they are under a mail order CBP.

Provision citation

Proposed changes

§ 414.402

– Items that are generally furnished from remote supplier locations should be included under a remote item delivery CBP that does not exclude non-mail order items as is the case under a mail order CBP.
– To phase in a nationwide RID CBP or regional RID CBPs, to be defined under § 414.402, for product categories including items such as those listed in table 45 that typically are furnished to beneficiaries from remote supplier locations or locations that are hundreds of miles on average from the beneficiary residence under a future round of the DMEPOS CBP.
– The term “Remote item delivery competitive bidding program” would be defined under § 414.402 to mean “a competitive bidding program wherein contract suppliers are responsible for furnishing remote item delivery items under the product category primarily to all Medicare beneficiaries regardless of where they live in the CBA.
– The term “Remote item delivery item” would be defined under § 414.402 to mean an item falling under a remote item delivery competitive bidding program that may be shipped or delivered to a beneficiary’s home, regardless of the method of delivery or picked up at a local pharmacy or supplier storefront if the beneficiary or caregiver for the beneficiary chooses to pick the item up in person.

Payment for Continuous Glucose Monitors and Insulin Infusion Pumps

CMS proposes to reclassify all CGMs and infusion pumps under the frequent and substantial servicing payment category at section 1834(a)(3) of the Act, as implemented under § 414.222(a). CMS would pay for all CGMs and insulin infusion pumps on a monthly rental basis under both the DMEPOS CBP and in non-CBAs under the fee schedule payments.

Provisions of the Proposed Regulation

Provision citation	Proposed changes
Section 1847(a)(4) of the Act	Make payment on a monthly rental basis for CGMs and insulin pumps furnished by contract suppliers under the DMEPOS CBP and by non-contract, grandfathered suppliers.
42 CFR 414.412	amend the regulations at 42 CFR 414.412 to specify that the bids submitted for rental of CGMs included as a lead item in a product category under the DMEPOS CBP for the first time cannot exceed the payment amount that would otherwise apply to the supplies for the equipment under subpart D plus the average of the purchase fee schedule amounts that would otherwise apply to the CGM (HCPCS level II code E2103) for the areas included in the CBA divided by 60.
42 CFR 414.412	Amend the regulations to specify that the bids submitted for rental of insulin infusion pumps included as a lead item in a product category under the DMEPOS CBP for the first time cannot exceed the payment amount that would otherwise apply to the supplies and accessories for the equipment under subpart D of this part for nonrural areas for a one month period plus the total rental fee schedule amounts that would otherwise apply to rental of the insulin pump for 13 months of continuous use under subpart D of this part for nonrural areas divided by 60.
42 CFR 414.416(b)(4)	Separate payment can continue to be made under the DMEPOS CBP for replacement of supplies and accessories necessary for the effective use of a CGM or insulin pump owned by the beneficiary at the time these items are phased in under the DMEPOS CBP for the first time in a CBA.
42 CFR 414.416(b)	Amend existing regulations by adding paragraph (4) to establish the methodologies for calculating the SPAs for items furnished as non-lead items under product categories in a RID CBP for the monthly rental of class II CGMs, the monthly rental of insulin infusion pumps, the monthly supplies for a beneficiary-owned class II CGM, and the monthly supplies and accessories for a beneficiary owned insulin infusion pump in a manner consistent with existing regulations at 42 CFR 414.416 which bases the SPAs for the lead item in a product category and CBA on the bids submitted and the SPAs for each non-lead item in the same product category and CBA based on the 2015 fee schedule amount for the non-lead item divided by the 2015 fee schedule amount for the lead item multiplied by the SPA for the lead item.
42 CFR 414.416(b)(4)(i) through (iv)	Calculate the 2015 fee schedule amounts for the monthly rental of class II CGMs, the monthly rental of insulin infusion pumps, the monthly supplies for a beneficiary-owned class II CGM, and the monthly supplies and accessories for a beneficiary-owned insulin infusion pump as follows: – The 2015 fee schedule amounts for the monthly bundle that includes a CGM and supplies are calculated using the 2025 fee schedule amounts and removing the fee schedule update factors from 2016 through 2025, and then adding the 2015 fee schedule amount for the supplies to the average of the 2015 fee schedule amounts for the purchase of a new CGM divided by 60 for the areas included in the RID CBP. – The 2015 fee schedule amount for the monthly supplies for a CGM owned by a beneficiary is calculated using the 2025 fee schedule amount and removing the fee schedule update factors from 2016 through 2025. – The 2015 fee schedule amounts for the monthly bundle that includes an insulin infusion pump and supplies and accessories are calculated using the average 2015 nonrural fee schedule amounts for the insulin infusion pump multiplied by 10.5 and divided by 60 for the areas included in the RID CBP, and then adding the average 2015 nonrural fee schedule amounts for the sterile syringe type cartridge for the insulin infusion pump multiplied by nine for the areas included in the RID CBP plus the average 2015 nonrural fee schedule amounts for the weekly insulin pump supplies multiplied by four for the areas included in the RID CBP. – The 2015 fee schedule amounts for the monthly bundle that includes the supplies and accessories for an insulin infusion pump owned by a beneficiary is calculated using the average 2015 nonrural fee schedule amounts for the sterile syringe type cartridge for the insulin infusion pump multiplied by nine for the areas included in the RID CBP plus the average 2015 nonrural fee schedule amounts for the weekly insulin pump supplies multiplied by four for the areas included in the RID CBP.
No citation	In instances where an insulin infusion pump that has been approved by the FDA for use in conjunction with a class III CGM is being used in conjunction with a class III CGM, both the insulin pump and the class III CGM would be excluded from the DMEPOS CBP.
42 CFR 414.222	Reclassify all CGMs and insulin infusion pumps paid for in accordance with the rules at section 1834(a) of the Act as items requiring frequent and substantial servicing under section 1834(a)(3) of the Act and regulations at 42 CFR 414.222.
1842(b)(8) of the Act	Use the authority at section 1842(b)(8) of the Act to establish special payment limits for these items if the bundled monthly rental amounts for class II CGMs and/or insulin infusion pumps established under the DMEPOS CBP are at least 15 percent below the bundled monthly rental fee schedule amounts for the class III CGMs and related supplies and insulin infusion pumps and related supplies established in accordance with section 1834(a)(3) of the Act.
Section 1842(b)(8) of the Act	– The monthly rental fee schedule payment amounts for class III CGMs would be limited to the monthly rental SPAs established for class II CGMs under the DMEPOS CBP. – The monthly rental fee schedule payment amounts for insulin pumps used in conjunction with class III CGMs would be limited to the monthly rental SPAs established for insulin pumps under the DMEPOS CBP. – The monthly fee schedule payment amounts for supplies used in conjunction with beneficiary-owned class III CGMs would be limited to the monthly SPAs established for supplies used in conjunction with beneficiary-owned class II CGMs under the DMEPOS CBP. – The monthly fee schedule payment amounts for supplies and accessories used in conjunction with beneficiary-owned insulin pumps that are used in conjunction with class III CGMs would be limited to the monthly SPAs established for supplies and accessories used in conjunction with beneficiary-owned insulin pumps under the DMEPOS CBP.
CMS must publish in the Federal Register the proposed and final notices of a special payment limit before it adopts the limit. Therefore, as part of this proposed rule, we are soliciting comments from representatives of suppliers or other individuals who furnish class III CGMs, insulin pumps used in conjunction with class III CGMs, and supplies and accessories used in conjunction with beneficiary-owned class III CGMs or beneficiary-owned insulin pumps used in conjunction with class III CGMs on the proposed payment reductions for these items and services.
Opportunity to Comment: CMS is soliciting comments on these proposals.

Summary List of The Proposed Provisions

Proposed Payment Rules for Class II CGMs and Insulin Infusion Pumps that are not used in Conjunction with Class III CGMs and are Furnished under the DMEPOS CBP

Payment would be on a continuous rental basis with payment for use of the equipment and all necessary supplies and accessories included in monthly rental payments made for up to 3 months in advance. Contract suppliers retain ownership of the rented equipment.

Payment for replacement of supplies and accessories only for beneficiary-owned equipment at the start of the program in a CBA would continue to be made as separate items under the product category until the beneficiary-owned equipment is replaced because it is lost, stolen, irreparably damaged, has exceeded the reasonable useful lifetime (as defined at 42 CFR 414.210(f)(1)), or in cases where the beneficiary elects to obtain newer equipment. Beneficiaries who own their equipment and want to replace the equipment with new equipment would have the option to obtain new rented equipment from a contract supplier at any time.

Rental agreements for equipment in place at the time the new rules are phased in under a CBA may be continued under the existing grandfathering rules for items requiring frequent and substantial servicing. Payment to grandfathered suppliers would be based on the monthly rental payment amounts established under the DMEPOS CBP.

If the class II CGM is the lead item in the product category the first time the new payment rules are implemented in a CBA, the bid limit would be established based on the monthly fee schedule amount for the replacement supplies plus the average purchase new fee schedule amount for the CGM for the areas included in the CBA divided by 60.

If the insulin pump is the lead item in the product category the first time the new payment rules are implemented in a CBA, the bid limit would be established based on the average weekly fee schedule amount for the replacement supplies and accessories for the areas included in the CBA multiplied by four, plus the average fee schedule amount for the syringe type cartridge for the areas included in the CBA multiplied by nine, plus the average of the total rental fee schedule amounts over 13 months for the insulin pump for the areas included in the CBA divided by 60.

Proposed Payment Rules for Class III CGMs and Insulin Infusion Pumps used in Conjunction with Class III CGMs (to be effective on the date the new rules for Class II CGMs and Insulin Pumps are Implemented)

All CGM and insulin pump equipment would be classified as items requiring frequent and substantial servicing for the purposes of implementing the payment rules under section 1834(a) of the Act. Payment would be on a continuous rental basis with payment for use of the equipment and all necessary supplies and accessories included in monthly rental payments made for up to 3 months in advance. Contract suppliers retain ownership of the rented equipment.

Special payment limits would be established in accordance with regulations at 42 CFR 405.502(g) and sections 1842(b)(8) and (9) of the Act to limit payment for class III CGMs and insulin infusion pumps used in conjunction with class III CGMs as well as supplies and accessories for beneficiary owned class III CGMs and insulin infusion pumps used in conjunction with class III CGMs to the payment amounts established for class II CGMs and insulin infusion pumps as well as supplies and accessories for beneficiary owned class II CGMs and insulin infusion pumps under the DMEPOS CBP.

Payment for replacement of supplies and accessories only for beneficiary-owned equipment would continue to be made as separate items after the implementation date of the CBP until the beneficiary-owned equipment is replaced because it is lost, stolen, irreparably damaged, is more than 5 years old, or in cases where the beneficiary elects to obtain newer equipment.

Revising the Submission of Financial Document Requirements for the DMEPOS CBP

Section 1847(b)(2) of the Social Security Act (Act) outlines the conditions for awarding a DMEPOS CBP supplier contract. Section 1847(b)(2)(A)(ii) of the Act specifies that CMS may not award a contract to any entity under the competition conducted in a competitive acquisition area unless the Secretary finds that the entity meets applicable financial standards specified by the Secretary, taking into account the needs of small providers.

Provisions of the Proposed Regulation

Provision citation	Proposed changes
Required Covered Documents	each bidding entity submit a business credit report with a numerical credit score or rating, unless the bidding entity does not have a business credit report with a numerical credit score or rating because the entity has not been in operation long enough to generate a numerical score or rating
Financial Scoring Methodology	– To continue publishing a Credit Report Scoring List and utilize the same five-tier credit report scoring system used in prior rounds of the DMEPOS CBP.
	– To continue using the 4, 8, 12, 16, or 20 scoring system when evaluating a bidding entity’s credit report with a numerical credit score or rating. – CMS is proposing to no longer use a bidding entity’s financial score to assist in determining the capacity to assign to each contract supplier to meet projected beneficiary demand. – To add a field in the bidding system requiring the bidding entity to verify that all the bidding entities included on the bid has a gross revenue that is under the small supplier threshold.
Opportunity to Comment: CMS is soliciting comments on these proposals.

Revising the CDRD Evaluation and Notification Process for the DMEPOS CBP

Since the inception of the DMEPOS CBP, within either 45 (for Round 1 bids) or 90 days

(for subsequent round bids) after the CDRD, CMS has notified bidding entities that submitted at

least one covered document by the CDRD, if a covered document was missing by the CDRD and by the close of the bid window.

Provisions of the Proposed Regulation

CMS proposes Streamline the evaluation and notification processes for missing covered document(s). CMS would no longer evaluate if a bidding entity was missing a covered document(s) by the CDRD and by the close of the bid window and would only determine if a bidding entity had a missing covered document by the close of the bid window.

Opportunity to Comment: CMS is soliciting comments on this proposal.

Bid Surety Bond Review Process

This proposal codifies how CMS handles situations where at least one of the bid surety bond requirements outlined in 42 CFR 414.412(g)(2)(i) and (ii) is not properly met after a bidder submits its bid surety bond(s) during the bid window. Specifically, if CMS determines that a bid surety bond requirement is not met, the bidder would be notified by CMS and would be provided with an opportunity to correct the deficiency on the bid surety bond via a bid surety bond rider.

Provisions of the Proposed Regulation

CMS proposes correcting a technical error created in 83 FR 57072 where CMS redesignated paragraphs (e) through (h) as paragraphs (d) through (g), respectively. The redesignated paragraph (g)(3)(ii) still contained a reference to the paragraph (h)(3)(i), which, with the re-designation, was deleted in its entirety. This proposed correction would revise existing

paragraph (g)(3)(ii) by removing the reference to “(h)(3)(i)” and replacing it with “(g)(3)(i)”. All other parts of paragraph (g)(3)(ii) remain unchanged with this proposal.

CMS proposes to provide bidders with a single, 10-business day timeframe to obtain and submit a bid surety bond rider correcting the deficiencies on the bid surety bond.

Opportunity to Comment: CMS is soliciting comments on this proposal.

Tribal Exemption from Participating in the DMEPOS CBP

Tribes that operate health facilities or suppliers under the ISDEAA have approached CMS requesting an exception from the DMEPOS CBP to allow Medicare payment for competitively bid items provided to AI/AN Medicare beneficiaries, who reside in a CBA, but who receive services from an IHS or Tribally operated facility or supplier, which can be located 60 or 90 minutes outside the CBA.

Provisions of the Proposed Regulation

CMS is proposing to use the authority at section 1862(a)(17) of the Act to add an exception to § 414.408(e)(2) that would allow Medicare payment to IHS or Tribally operated facilities and suppliers that furnish competitively bid items and services to AI/AN Medicare beneficiaries who reside in a CBA so that the AI/AN Medicare beneficiaries can retain the benefits described previously when receiving DMEPOS items and services from a Tribal supplier.

Opportunity to Comment: CMS is soliciting comments on this proposal.

Addition of a Termination Clause for the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program (CBP) Supplier Contracts

Current regulations at 42 CFR 414.422 establishing the terms of each DMEPOS CBP contract state that contract suppliers must agree to furnish items under its contract to any beneficiary who maintains a permanent residence in, or who visits, the CBA and who requests those items from that contract supplier. Since the inception of the DMEPOS CBP, CMS has never verified an instance where all contract suppliers for a competition were not able to meet beneficiary demand for the competition, even during a PHE.

Provisions of the Proposed Regulation

Provision citation	Proposed changes
§ 414.422	– CMS would have the option to unilaterally terminate or modify each applicable DMEPOS CBP supplier contract to allow any Medicare enrolled DMEPOS supplier to furnish the applicable items and services to Medicare beneficiaries in the PHE-impacted area if it was determined that due to a PHE, contract suppliers are unable to furnish certain items and services to beneficiaries in certain areas impacted by a PHE (PHE-impacted area) as required under their respective DMEPOS CBP supplier contracts. – CMS would have the option to unilaterally terminate or modify each applicable DMEPOS CBP supplier contract to allow any Medicare enrolled DMEPOS supplier to furnish the applicable items and services to Medicare beneficiaries in the PHE-impacted area. Depending on the geographic extent of the PHE, a PHE-impacted area may refer to entire CBA(s) or only certain areas within a CBA. – After termination and/or modification of all applicable DMEPOS CBP supplier contracts, to revert back to the general fee-for-service program requirements set forth in 42 CFR Part 414 Subpart D for the applicable competition(s) or defined area(s) within a CBA. – CMS would have the option to remove items and services furnished in a PHE-impacted areas from the DMEPOS CBP when all of the following qualifying criteria are met: – the Secretary declares a PHE; – CMS determines that verifiable evidence exists of a DMEPOS access problem for beneficiaries for a certain competition or defined area(s) within the competition’s CBA; – CMS determines that awarding additional DMEPOS CBP supplier contracts, per § 414.414(i), would not address the access concerns; and – CMS determines terminating or modifying each impacted DMEPOS CBP supplier contract to exclude certain competition(s) or defined area(s) within the competition’s CBA from the – DMEPOS CBP would alleviate access concerns.
Opportunity to comment: CMS is soliciting comments about these proposals.

Technical Change to § 414.408(h)(8)

In the 2007 final rule we added § 414.408(h)(7), which set the payment amounts for rented DME requiring frequent and substantial servicing (72 FR 18032). We added § 414.408(h)(7)(i), which referred to paragraph (h)(7)(ii) of this section. Subsequently, we published in the Federal Register a final rule in 2011 titled “Medicare Program; Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2011” (75 FR 73170). In this rule we added paragraph § 414.408(h)(2). As a result of this addition, what used to be § 414.408(h)(7), became § 414.408(h)(8). However, § 414.408(h)(8)(i) was inadvertently not updated to refer to paragraph (h)(8)(ii), and it still refers to paragraph (h)(7)(ii). CMS is therefore making a technical change to the regulation text at § 414.408(h)(8)(i) so that it will refer to paragraph (h)(8)(ii) instead of paragraph (h)(7)(ii).

Opportunity to comment: CMS is soliciting comments about this proposal.

Definitions of “Competition” and “Adjusted Fee Schedule Amount” and “Unadjusted Fee Schedule Amount” under § 414.402

The Medicare fee schedule amounts for enteral nutrition furnished in non-CBAs are adjusted using information from the DMEPOS CBP in accordance with § 414.105. The Medicare fee schedule amounts for DME and medical supplies and OTS orthotics furnished in non-CBAs are adjusted using information from the DMEPOS CBP in accordance with § 414.210(g). The Medicare payment amounts for lymphedema compression treatment items are adjusted using information from the DMEPOS CBP in accordance with § 414.1690.

Provision citation	Proposed changes
§ 414.402	– Add definitions for “Adjusted fee schedule amount” and “Unadjusted fee schedule amount” under § 414.402.) – Propose that adjusted fee schedule amount means the payment amount established for the item under Subpart C of this part, with the application of § 414.105. – Propose that Unadjusted payment amount means the payment amount established for the item under- Subpart C of this part, without the application of § 414.105. – Propose that Unadjusted payment amount means the payment amount established for the item under- Subpart C of this part, without the application of § 414.105; Subpart D of this part, without the application of § 414.210(g); or Subpart Q of this part, without the application of § 414.1690 – Add a definition for “Competition” under § 414.402 to read Competition means a competitive bidding area and product category combination where bids are submitted by suppliers in an attempt to be awarded contracts for furnishing competitively priced items and services within the product category in the competitive bidding area.
Opportunity to comment: CMS is soliciting comments about these proposals.