Updated at 10:30 a.m. ET, Dec. 19The CMS issued a request for information Tuesday from accrediting organizations like the Joint Commission to understand how they establish and disclose relationships with providers they both sell consulting services to and accredit for participation in Medicare.
The hospital accreditation industry has been under heightened scrutiny since last year when an investigation from the Wall Street Journal found that the Joint Commission, which accredits nearly 80% of U.S. hospitals, rarely pulls accreditation for providers even when violations of Medicare requirements are found. The paper found that just 1% of facilities not in compliance in 2014 lost accreditation.
The CMS has faced pressure to address the concerns that the Joint Commission and other accrediting agencies engage in conflicts of interest by acting as both an enforcer of Medicare rules for hospital participation while taking on hospitals as clients to improve their performance. In its annual report to Congress in October, the CMS announced it would publicly post quality-of-care deficiency findings from surveys at facilities accredited by such organizations. It would also provide a list of providers determined by the CMS to be out of compliance.
The Joint Commission’s not-for-profit consultancy arm, called Joint Commission Resources, offers a substantial income stream for the organization. In 2016, Joint Commission Resources reported more than $6 million in profit on revenue of $63.5 million, according to its Internal Revenue Service Form 990 on GuideStar.org. The Joint Commission’s accreditation division reported $10.6 million of profit on revenue of $164 million to the IRS in 2016.
Maureen Lyons, a spokeswoman for the Joint Commission, said the commission is currently reviewing the CMS’ request for information. She added that its consultancy division, Joint Commission Resources, is separate from its accreditation division.
“The Joint Commission recognizes the importance of assuring the integrity of the accreditation process, which we accomplish by prohibiting any sharing of information about consulting services for individual organizations with anyone involved in accreditation … The Joint Commission enterprise has long-standing firewall policies, practices and procedures in place that assure that this goal is achieved,” Lyons said.
In an interview last year with Modern Healthcare, Joint Commission CEO Dr. Mark Chassin defended its tactics, arguing it’s in the public’s interest for the Joint Commission to help organizations with deficiencies improve. “If we abandon them, nobody’s going to help them improve and then the likely event is the organization closes, and access gets to be a problem for a lot of communities,” he said.
The CMS already requires accreditors to disclose its policies and procedures to avoid conflicts of interest, but the agency said, “we are seeking ways to enhance this oversight and review process.”
Along with information about the consultancy services accreditors offer, the CMS would also like them to provide how their revenue and operations may be affected if the CMS were to prohibit consulting services. “We are specifically looking for cost impacts, detailed accounting, and potential business risks for accrediting organizations,” the CMS said.
CMS is also seeking comment from other stakeholders if they “perceive a conflict of interest in accrediting organizations providing fee-based consultative services to the facilities they accredit.”
Stakeholders and the public have 60 days to comment. Through the request for information, the CMS will determine whether revisions should be made to the application and renewal process of accreditation organizations, according to an agency news release.