Accreditation and licensure have become hot topics in the world of HME. Health maintenance organizations (HMOs) have demanded it, state organizations have lobbied for it, and a few legislators have made it necessary. But some providers still wonder if more regulation is really the answer to controlling fraud and abuse and legitimizing the HME industry, which has for years been buffeted by a less-than-wholesome reputation.

“People should be held accountable,” says Dale Richardson, president of R&R Discount Medical in Kalamazoo, Mich, which is neither licensed nor accredited. However, Richardson believes market competition already takes care of this better than the stamp of approval of a state agency or an independent accrediting body does. “We’re certainly accountable; our customers hold us accountable,” he explains.

There are several organizations that offer accreditation to HME dealers. The Joint Commission on Accreditation of Healthcare Organizations (JCAHO), Oakbrook Terrace, Ill, is the largest and oldest. It has been in business for more than 50 years and has been accrediting HME businesses for the last 15 years.

It is followed in age by the Community Health Accreditation Program (CHAP), New York, which was formalized in 1965 as a joint venture between the American Public Health Association and the National League of Nursing.

Finally, the Accreditation Commission for Health Care Inc (ACHC), Raleigh, NC, was formed in ’86.

State licensure, with its legal power of enforcement, is available in only 17 states, but is a cause celebre among many state organizations and the American Association for Homecare (AAHomecare), Alexandria, Va.

Do High Standards Equal High Cost?
Although accreditation has become popular, it can be challenging and expensive for HME dealers to qualify. For JCAHO, which has 180 individual standards that have to be fulfilled, a request for accreditation is not enough. The dealer must first meet its eligibility requirements.

“The requirements for accreditation for medical equipment is that the organization is providing DME in the patient’s residence,” says Maryanne Popovich, JCAHO’s executive director of home care accreditation services. “We then require that this really means that the organization is delivering, setting up, and educating the patient in the use of that equipment.”

Costs average about $9,300 for JCAHO accreditation and $5,000 for ACHC accreditation, and preparation for accreditation from either organization can take up to a year.

Since in most cases accreditation is voluntary, the motivation to invest the money and time necessary to become accredited usually is economic. Often a provider will seek accreditation because a third-party payor demands it, Popovich says.

However, Thomas E. Cesar, MPM, president and CEO of the ACHC, says that even if accreditation is required by a payor, it should not be the primary motivation for an organization to seek accreditation. “There are a lot of providers that are doing a good job, and, in their market sphere, they don’t need accreditation,” he says. “However, in any profession, if you have an independent, outside peer review process, it validates what you say you are doing.”

Popovich echoes Cesar. “From my perspective, the best reason to do this is because we provide for you as the organization an objective evaluation against national standards of what you are doing right and what you need to improve,” she says.

Cesar does note that accreditation has its weaknesses. “We are under what I call the traditional accreditation model, and it is mainly looking at things in retrospect,” he says. “What accreditation must come to, and I think it will, is more measurement in real time, so that in the year after you have been surveyed, you are still [adhering to] the same [high standards].”

Another weakness is that accreditation does not have the power of enforcement. If an organization loses its accredited status or does not bother to renew it during its triennial review, there are few consequences to the dealer.

This is where state licensure can help, say its advocates. When the state requires adherence to a set of standards, there are serious consequences to letting those standards lapse.

The Power of the State
The push for licensure at the state level parallels that of accreditation. It is a way for dealers to be seen as legitimate in the eyes of the public and legislators. But there are other reasons as well. “It’s good because it controls fraud and abuse, but the main thing is that it helps get us the recognition as an industry that we are a professional part of the health care system,” says Seth Johnson, director of public policy for AAHomecare.

An advantage to dealers in the 17 states that have licensure is that the fees are much lower than those for accreditation. In New Hampshire, for instance, it costs just $20 a year. In most other states it is only a few hundred dollars as opposed to the thousands required for accreditation.

However, in many states, licensure is a contested political topic, primarily, Johnson says, because in tough budget years, states see administering a licensure program as an unnecessary expense. According to Johnson, New York’s licensure statute, which was signed into law by Gov George Pataki last year, has been effectively repealed by its exclusion from the budget. Indiana’s licensure bill did not make it out of committee.

Even with the reversals, there is growing attention and interest in licensure, Johnson says, but it has a way to go before there is licensure in all 50 states.

The Market Forces Argument
This is good news for Richardson who worries that licensure and accreditation requirements may create new bureaucracy and added expenses with little apparent benefit.

“Any successful company, whether it is small or large, has got to have certain controls and procedures in place, which we do,” he says. “I have investigated getting licensed and going with JCAHO or one of the other guys, and we are talking about $30,000 in an initial setup. For a small company, that is a lot of money. And when I look at what they give me, perhaps that will give me some more business, but is it worth it? I would have at least one, probably two people just to administer this program. Now I am not only looking at the $30,000 for JCAHO, but I am looking at hiring another two people, so I am taking out another $100,000 in salary.”

Richardson is not alone in weighing the costs vs benefits of licensure and accreditation carefully. Larry Rice, general manager of The Wheelchair Shop, Houston, believes that there should be some sort of accreditation as a way to recognize the professionalism of dealers, but that there is no need to start new accrediting or licensing bodies. “We are all dealing with individuals that are all very diverse and different,” he says. “Are we going to just serve up rehab and other supplies by a manual?”

The key, Rice says, is to put the focus on customer service, which market competition already does. “I think we have to focus on the end user, and then we are a success,” he says. “If we do the first job right, all that money is going to follow.”

While accreditation and licensure elicit strong emotions, proponents and detractors alike agree that there is a need for high standards and high service to the patient. It is how to accomplish this that lies in the balance.

C.A. Wolski is associate editor of Dealer/ Provider magazine.