2026 DME Final Rule Explained

We unpack the 2026 CMS DME final rule with an eye on what changes first, what it costs, and how suppliers can adapt without disrupting patient care. Annual surveys, stricter accreditation oversight, and targeted incentives reshape strategy, budgets, and daily operations.

• Annual surveys begin at next initial or reaccreditation after 1 January 2026
• Elimination of temporary accreditation before surveying new service locations
• CHOW events may trigger initial surveys and start annual cadence
• Prior authorization exemption for suppliers maintaining 90% approval
• Added products and remote item delivery in competitive bidding
• Increased CMS validation, AO reapproval, and continued sampling
• Faster complaint reporting and more granular data submission
• Clear rationale required when accepting corrective action plans
• Address changes and warehouse functions require survey planning
• Practical steps for budgeting, staffing, and strategic footprint decisions

Read the final rule. Listen to industry webinars and review our resources to understand the key elements and direct impact on suppliers.

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Chapters

• 0:00 Setting The Stage: DME Focus
• 2:24 Why CMS Is Tightening Oversight
• 5:20 Annual Survey Shift And Timeline
• 9:10 Ending Temporary Accreditation
• 12:23 CHOW Triggers Initial Surveys
• 15:08 Prior Authorization Exemption Rules
• 18:45 Data Reporting And Complaints
• 22:15 Corrective Action Plans Scrutiny
• 25:20 Competitive Bidding Adds Categories

Transcript

SPEAKER_02: 0:15

Greetings, I'm Jennifer Kennedy, the lead for compliance and quality at CHAP, and welcome to this edition of CHAPCAST. Today we're going to be talking about the calendar year 2026 Home Health Payment Update Rule, the sequel, but with just the DME provisions. And I'm so happy to be joined by my colleagues Kim Skehan and Shannon Dorsey Dunlap. Kim, you know, uh Kim and I have uh talked many times on many casts, and um Shannon uh is our uh director of accreditation with DME Experience. So welcome, Kim and Shannon.

SPEAKER_00: 0:58

Thank you, Jennifer.

SPEAKER_02: 0:59

Thanks, Jennifer. All right, so let's go ahead and jump in. This piece of the rule is really, I think, what took up most of all those 762 pages. Um and the tone in this section of the final rule really revolved around um improving efficiency and validation that DME providers are compliant with regulatory requirements, all in the push to prevent fraud and abuse related to this DME space. So based on on this tone and the themes, you're you're when we go over the content, you're gonna definitely feel um this this is really serious what they're trying to do in terms of reforming the DME space to cut down on that fraud and abuse. So uh what I'd like to do is um jump in and um talk about um what the significant changes for DME providers are first, and there will be um changes for accreditation organizations as well, but um let's go ahead and talk about the DME provisions. And you know, Kim, if you want to uh lead this with Shannon, I think that would be great since you both are in the accreditation space of our organization.

SPEAKER_01: 2:29

Sure. Well, I can certainly kick it off and um talk about the focus as it relates to survey and also us as an accreditation accrediting organization. Um just to be clear, yes, CMS um most definitely clarified additional um oversight that uh and tightening of accreditation and survey responsibilities requirements for both providers and for the AOs. It appears as though some of these uh um um areas that were uh placed into the proposed rule for DME also stemmed in some fashion with the uh prior uh home health and hospice um accrediting organization oversight proposed rule that is still, as far as I know, still out still pending. Um but seems as though they pulled so they pulled some of that some of that language. Although we have um in communication with CMS, it's clear that these provisions, uh, while they are similar, are not uh aligned uh specifically with what would be the expectations for the current or um anticipated processes for home health and hospice. So they are treating home health and hospice, I mean uh DME separately. And you're right, it's the understanding is because there has been a long um you know many, many years with uh very with a lack of um of according to CMS um you know oversight, which has then in many cases, or in some cases resulted in fraud. Uh and um the although uh CMS has also increased audit oversight, um, they're also looking to the accrediting organizations to also, if you will, lay eyes on the um the agencies, the suppliers more frequently to ensure compliance with regulations and making some of those penalties uh more stringent. We um we saw this information or this proposal, uh this information or these um items in the proposed rule um and not uh but understanding now that they have all but a couple then finalized all with overall effective dates of January 1st, 2026. So rapid turnaround. But there is a little bit of um leeway that I think folks need to just understand. So um what I'll do is I'll talk about the um I'll tell I'll talk about the AO changes and the surveys. I would say, and Shannon, correct me if I'm wrong, the biggest, um, the biggest challenge or the the one area that really um I guess shocked, I would have to say, um, the provide the supplier community, certainly as well as AOs, was the implementation of annual surveys technically effective January 1st, 2026. That's been the number one comment, I think, that that certainly we have heard, and I believe CMS also had heard. It's important to understand that CMS did clarify with the AOs last week that the annual is in effect as of January 1st, but will be will begin to be required with any new suppliers who are initially accredited or anyone who's re-accredited at the time of their reaccreditation. Um their three-year reaccreditation would now become an annual accreditation. So, for example, if someone had a supplier had a triennial survey in 2025, um, they would not be due for their next survey until 2028, and at which time then they would transition to annual. Or if they were surveyed in 2024, it would be 2027. So I think that that really helped relieve, I think, some of the concerns, certainly on the AO side, as we are gearing up to ensure that we have qualified staff, um, site visitors, but also um for the suppliers as well. Because remember, DME is the one um one supplier, certainly that we accredited that is required to be accredited. So accreditation is not an option for a D a demipost supplier.

SPEAKER_02: 7:04

Um you know, Kim, I can tell you as a as an AO, I felt like shoo in terms of the uh implementation plan. I'm glad they sort of built that glide flight into um the the angle. And that I think gets providers more time to sort of wrap their arms around what this is gonna mean for them in terms of processes and costs and and all of those things.

SPEAKER_01: 7:31

No, agreed. And I would also say that um, you know, it also gives us as an AO the time to make sure that we we already have very well qualified DME um site visitors, we call them surveyors, but to be able to, you know, bolster our our team and then also ensure that, you know, um there's a consistent understanding of the standards and the oversight processes. That's as as the um the person along with Shannon who oversees the accreditation and survey process, that's extremely important. Jennifer, I mean, um uh Shannon, did you um can you just make a quick point about the elimination of the temporary accreditation? Because I do think that that's an important area that suppliers need to understand and providers.

SPEAKER_00: 8:20

Absolutely. So currently an AO may accredit a new location for an existing DemiPost supplier for three months after it's operational without requiring a new site visit. Um so what we would do is if once we're notified that an organization, an already accredited organization, adds a new location, um, we go ahead and extend accreditation and then we conduct a site visit within 90 days. However, effective January one, excuse me, effective January one, all demi post suppliers must be surveyed before being accredited. Uh so CMS can confirm that the location meets the standards. Um so yes, that that is a big change.

SPEAKER_01: 9:01

Yeah, absolutely. And the other really is related to the CHOW, the change in ownership or majority ownership, um, which is I'm gonna use the term similar to the 36-month rule that we see in home health and hospice. And so I um organizations need to understand our suppliers, if they have a majority ownership change, they would actually be surveyed as a as an initial um certification, not um unless they meet one of the exemptions that's that's in the rule. And that this is important because if an organization, if a supplier is is then surveyed as an initial, they then become subject to the annual survey review, uh survey timeline and accreditation timeline from there forward. Um so I so that I think that's that's an important note. Did I um did I uh did I say that correctly?

SPEAKER_00: 9:59

You did. Yes, you did.

SPEAKER_01: 10:01

Yeah. So um can you um Shannon, can you just talk about the prior authorization process?

SPEAKER_00: 10:08

Um Yeah, so um there is a proposed exemption process for prior authorizations. Uh CMS finalized that suppliers achieving a rate of 90% uh will be offered an exemption from the required prior authorization. Um to determine supplier eligibility for continued exemption, the MAX would complete a post-payment medical review sample. From this sample, suppliers can meet a claim approval rate of 90% or greater to continue the exemption. And suppliers who do not meet the compliance rate must continue submitting the prior authorization requests.

SPEAKER_01: 10:50

Yeah, I know. Thanks for a little bit of overview.

SPEAKER_00: 10:54

Yeah. It's a little bit of good news.

SPEAKER_01: 10:58

We we need all the good news we can get with the final rule, correct, Jennifer? And these days. Oh my God.

SPEAKER_02: 11:06

That's all I can say. This just is uh it is a big rule. It's full of a lot of requirements, a lot of changes. But yeah, uh, we'll take um we'll take any grace we can get uh in terms of the implementation.

SPEAKER_01: 11:22

Absolutely. And I know um Jennifer, uh your team, the quality team here at CHAP, is also really busy working on the changes that are also going to be implemented that impact your team as well as the accreditation team and suppliers. Um, you know, both what are some of the things that that uh that are impact, some of those items that are impacting your um your team, the quality team and the accreditation process?

SPEAKER_02: 11:53

Well, uh certainly there's you know the continued data submission that we do do to CMS about the accreditation surveys. There will be some increased data that we will need to report to CMS, and they're not uh forthcoming at the moment about what that extra data is going to look like, but certainly there will be more data that we will have to give them, and that's really in line with all of the oversight uh that they have uh finalized uh in this rule. So data submission, and um, we do have some changes with the complaint process. Um, we will have to give information sooner and quicker um about any complaints that are received uh about a supplier that we accredited. So we'll be uh making some process changes there. And of course, just getting ready for um the volume of annual surveys. But as we said before, we do have a bit of a ramp up for that. So that that's uh actually a blessing in disguise.

SPEAKER_01: 13:02

Yeah, absolutely. One of the items, one of the the elements that I identified that will be also an added work um workload, if you will, on the accreditation team and ultimately the quality team and suppliers is the requirement that we uh as if we accept a corrective action or request a corrective action plan in lieu of denying accreditation, then there needs to be a rationale from the AO as to the reason for the um the reason why a corrective action plan has been um permitted, if you will, accreditation with an action plan versus denial. So it sounds as though you know CMS is really tightening up the um, you know, looking to see why and how uh what why and how um um DME providers and suppliers are being um accredited and if there is any trending there.

SPEAKER_02: 14:04

Yeah, absolutely. So um that's gonna be an important change for us. You know, one thing that um we we can mention today, and I'm I'm gonna ask Shannon if she could weigh in on it, even though it's really not in the scope of what we do as an accreditation organization, but there were um some changes to the competitive bidding program. And I don't know, Shannon, if you feel like you could give like the 50,000-foot highlight um of the competitive bidding uh program changes.

SPEAKER_00: 14:39

Yeah, I mean, they obviously have added uh products, right? And they've added the new uh category of remote item delivery, um, you know, which includes the CGMs, infusion pumps, um, and then of course your disposable supplies, uh, you know, ostomy, um, things of that nature. So yeah, I think it's going to be important for all DemiPose organizations um, you know, to really do due diligence, right? And and read this and understand the process, um, consult with industry experts and be very purposeful in their strategic planning.

SPEAKER_02: 15:16

Yeah, absolutely. And thank you for that. So, Kim, we did mention AO changes on the horizon, right? So we have been um uh approved as a DME provider since the beginning of the program. So we are going into some changes now, and hopefully um you could talk about that because I think as a uh DME provider or supplier, they have to be accredited, as you mentioned. So they really need to understand the accreditation um parameters uh as they're going to change, as well as the parameters for them themselves. So uh could you give us some of the highlights of what our AOs are going to be required to do or how it's gonna look moving forward?

SPEAKER_01: 16:07

I can certainly start, and then Shannon, please feel free to uh jump in. Uh, I will also say that CMS indicated uh to all of us, all AOs on our call as well last week and on our individual calls, um, that this is an evolving process, both for us, for sub for us, for suppliers, as well as for CMS. So there are many um you know areas that we are um moving forward with and then will likely or hopefully receive some um you know further guidance um moving forward with the the um you know the survey process. But the survey process itself um is is really specific to each AO, um and we do our standards do uh also meet the um the CMS, the DME quality standards. So that's what's the what organizations are are surveyed against. And it does depend on the type of supplier in terms of the you know the focus of the survey. Uh we also have not just DEMI posts, but we also are um have launched our infusion pharmacy um uh service line, which also includes some limited DME. Um so that also you know that that's all that's an area that that is included. We will need to reapply for accreditate to be a deemed uh an approved dean status provider um for CMS, and that will come likely sometime in first quarter. Um we also one of the the good one of the things as a good news is um at least so far is um CMS is agreeing to continuing sampling. Sampling is used for larger providers, and this also was another area that I think AOs and suppliers are breathing a sigh of relief. Now, at the moment, we have been instructed that our current uh sampling methodology can be used, although we certainly can evaluate to evaluate that, and then um we will await uh any further guidance you know from CMS, if there is any in the future. But it is um that was a welcome change because the original proposed language and when it this was originally um published, uh the final rule it there was a concern that, or before that the final rule was um published, it was there was a grave concern that all suppliers, all locations would need to be surveyed. Now, there does need to be a systematic way of reviewing organizations, um but again at this point it's really up to each of the DME providers, I'm sorry, the AOs to make that determination. And CMS is going to be conducting validation surveys following AO surveys. It appears as though at the moment, from what we understand, that that that will be completed remotely. Um and if there is a need for uh CMS to go on site following a um uh an AO survey, I believe that there will be some communication that occurs with that. But again, that's an area that's also um um, you know, uh uh up for further further discussion and development and evolving, evolv evolvement, if that's a word. Um Shannon, do you have anything to add? I don't even know. Yeah.

SPEAKER_00: 19:44

No, that's good. We it's always good that we make up words on the fly. I think the one thing to point out is change of location, right? If an organization has an address change, even if it's right across the street, um, you know, what we were told is that. Draw a hard line when it comes to that. So we will be making uh site visits, you know, for that change of address. So again, um, it's important for the organizations to be strategic, right, in their planning process and and to know for what the next year is going to hold because you know additional site visits are required.

SPEAKER_01: 20:21

And they have to be, as as Jennifer pointed out, and in the final rule, they need to be approved with uh with a site with a um you know with a survey, right? Um for the change of location before it's not just a notification. And we know in other settings as well that there are sometimes delays, um, often not sometimes, very often, delays not from the surveying entity, but from the processing, you know, from CMS and the MAX are part of that approval process. So I think it's a good point, Shannon, that you know, suppliers really need to think through operationally, you know, what their plan is going to be in terms of any moves. Um, and the other is looking at what locations that you they currently have as um both the suppliers and or warehouses. Um does that because how do I guess my question to you, Shannon, is um can you just explain the um how being designated as a warehouse impacts the um you know the survey requirement?

SPEAKER_00: 21:31

Sure. So CMS requires that all service locations, that's that's the term that CMS uses. Service locations uh you know must be accredited and of course obviously require the PTAN. Um warehouses can be extensions of those service locations. Uh so they don't necessarily require their own PTAN. However, some of the processes that are conducted at a warehouse location are what we would determine, you know, whether we're doing a site visit or not to that particular warehouse. So for example, if a service location, meaning a location where patients can come right and pick up their equipment and receive instruction, um, maybe at that service location they don't necessarily clean and repair equipment, but they do that at a warehouse that's a couple of miles down the road, um, you know, that warehouse would be seen in conjunction with, right, that service center, because uh we obviously part of the accreditation process is to review and assess compliance with infection control, you know, repair and maintenance and those standards as specified in the CMS quality standards. Um but you're right, to your point, again, organizations uh are going to be looking strategically, right, at whether or not uh these locations are going to continue to be service locations, whether some of them may be changed to a warehouse, or you know, whether or not some of them can be eliminated. But again, that will go to their strategic planning process.

SPEAKER_02: 22:57

So as we uh sort of get to the end of our time here with our listeners, uh Kim and Shannon, what would you say um to them? What are what are some takeaways? What are um some pieces of advice you would give suppliers today on December 15th, knowing that the rule implements on January 1?

SPEAKER_00: 23:21

Yeah, absolutely. If if I were a um a provider, I would be looking at my resources, right? I would be uh reaching out to whether it's a national association, a state association, uh being sure that I do my homework, that I understand exactly what's required, and then sitting down with my team, right? To whether it's my budget or looking at not only just the next year, but maybe even the next couple of years. Again, you got to be very strategic about this in order to ensure that you continue to provide quality services to your patients.

SPEAKER_02: 23:56

Excellent. Thanks, Shannon. Kim.

SPEAKER_01: 23:58

Yep, I mean, I wholeheartedly agree. And I'm also gonna channel you, Jen, in our uh previous uh communication, and that is um read the final rule. Read the final rule, listen to what any um, you know, industry webinars, um, state or national associations or experts, um, as well as certainly we have ourselves in addition to this podcast, and uh we also have um fabulous resources that thank you, Jennifer, have been pulled together to summarize what these what these um the final rule um key elements are and the direct impact on suppliers. Also understand that um these are the while everything is effective January 1st, 2026, there are some processes um that will be evolving both from CMS as well as from the AOs. So just staying in communication with you know um us if if we're if you're if um you know if you're accredited by CHAP or your AO to ensure that that you also understand those those changes as well. So um uh mostly staying uh ahead of what those and knowing what those requirements are and staying connected.

SPEAKER_02: 25:22

Excellent. Yes, and there are there are things out there for uh folks to read, but they gotta read. They have to actually read the summaries and all of the different blogs that are out there. Well, thank you so much, uh Kim and Shannon uh for laying out the um ABCs of the DME provisions of this rule. Any final parting thoughts for our listeners?

SPEAKER_00: 25:50

No, just be knowledgeable, right? And um, you know, put your time and effort in and reach out for resources. Don't be afraid to reach out.

SPEAKER_01: 25:59

Yep, and strap on your safety belts. We're all going for a ride.

SPEAKER_02: 26:04

We're building the car as we're flying it or driving it. Flying it. Roller coaster that isn't in the road, right? Yeah. Oh my gosh. Well, thanks so much uh to both of you, and thanks to all of you out there uh for taking time out of your day uh to listen to our DME podcast. So from Kim and Shannon and me and the entire CHAP staff, keep your quality needle moving forward, stay safe and well, and thanks for all you do.