The Centers for Medicare & Medicaid Services (CMS) wants Medicare durable medical equipment (DME) providers to be re-accredited annually, and also wants to change the prior authorization process for suppliers billing Medicare.
The proposed changes were listed in the Calendar Year 2026 Home Health Prospective Payment System Proposed Rule Fact Sheet, CMS-1828-P, released June 30.
CMS wants annual accreditation cycle for DME suppliers
Accreditation for providers of Medicare durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) is currently on a three-year cycle, with re-accreditation most recently taking place in 2024.
Now, CMS wants DMEPOS accreditation to be re-surveyed and renewed every year because it’s concerned about compliance on the part of both accredited suppliers and the accrediting organizations (AOs).
“We are particularly concerned that there may be instances where: (1) AOs are accrediting DMEPOS suppliers that do not meet the DMEPOS quality standards; and (2) DMEPOS suppliers are falling out of compliance with the quality standards (sometimes for extended periods) after becoming accredited,” the fact sheet stated. “As a result, we are concerned for beneficiaries’ health and safety when they utilize such suppliers, as well as for the many millions of Medicare dollars that may have been paid to noncompliant suppliers since 2006. Therefore, we are proposing to update and enhance our regulations so we can exercise greater scrutiny over DMEPOS suppliers and the AOs.”
As part of what CMS described as “stronger oversight of AOs,” the agency is proposing “increasing the amount, specificity and frequency of data that AOs must submit to CMS; expanding CMS’s ability to closely monitor and review AOs’ operations; and strengthening CMS’s ability to act against poorly performing AOs.”
The fact sheet said these changes “would help protect Medicare beneficiaries and the taxpayers from unqualified DMEPOS suppliers.”
‘Additional specificity’ for DMEPOS prior authorization process
CMS also proposed “additional specificity for the DMEPOS prior authorization exemption process,” with the new structure being based on its hospital outpatients department prior authorization program.
“CMS proposes that suppliers achieving a target approval rate of 90% be offered an exemption from required prior authorization,” CMS said. “To determine supplier eligibility for continued exemption, the DME Medicare Administrative Contractors (MACs) would complete a post-payment medical review sample. From this claim sample, suppliers must again meet a claim approval rate of 90% or greater to continue their exemption. Suppliers who did not meet the compliance rate threshold must continue submitting prior authorization requests as required. … The DME MACs would provide suppliers notice of an exemption or withdrawal of an exemption at least 60 days prior to the effective date.”
No new details on competitive bidding resumption
The fact sheet provided no new details on the resumption of the competitive bidding program, though CMS did say it was “proposing improvements to the DMEPOS competitive bidding program so that we can protect the Medicare trust fund, and beneficiaries can have lower copays.”
CMS did not release the product categories to be included when competitive bidding resumes, “nor are we announcing the specific timeframe for the next competition,” the fact sheet said. “A future announcement will provide those details.”
AAHomecare: ‘Fully prepared’ to work on proposed rule
After the fact sheet’s release, the American Association for Homecare (AAHomecare) sent an email to stakeholders.
“AAHomecare is fully prepared to work with the [Trump] administration, Congress and the HME [home medical equipment] sector on this important proposed rule,” said AAHomecare President/CEO Tom Ryan. “We need to make sure the procedures and price-setting methodologies in this new bidding round can deliver reimbursement rates that reflect market reality. In advance of round 2021, HME stakeholders worked hard to secure program improvements, like raising the bid ceiling, using clearing prices to set rates, and keeping unqualified bidders from participating — and we are determined to protect and add to those improvements where we can.”
Ryan said that in addition to studying the new proposed rule and working with HME stakeholders, “We’ll also work with Congress and our clinician and patient advocacy partners as needed to protect access to care. … Preparing for a new bidding round is going to be a major undertaking for everyone in the HME sector. We’ve got to be united and engaged as an industry to meet this moment.”
AAHomecare added that the proposed rule is scheduled to be published in the Federal Register on July 2, with comments due 60 days later.
CMS also proposed Medicare cuts to home health funding. The agency estimated that Medicare payments to home health agencies in calendar year 2026 would “decrease in the aggregate by 6.4%, or $1.135 billion compared to CY [calendar year] 2025.”
