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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Episode Transcript

SPEAKER_02 (00:15):
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 talkingabout 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 bymy colleagues Kim Skehan and

(00:40):
Shannon Dorsey Dunlap.
Kim, you know, uh Kim and I haveuh talked many times on many
casts, and um Shannon uh is ouruh director of accreditation
with DME Experience.
So welcome, Kim and Shannon.

SPEAKER_00 (00:58):
Thank you, Jennifer.

SPEAKER_02 (00:59):
Thanks, Jennifer.
All right, so let's go ahead andjump in.
This piece of the rule isreally, I think, what took up
most of all those 762 pages.
Um and the tone in this sectionof the final rule really
revolved around um improvingefficiency and validation that

(01:24):
DME providers are compliant withregulatory requirements, all in
the push to prevent fraud andabuse related to this DME space.
So based on on this tone and thethemes, you're you're when we go
over the content, you're gonnadefinitely feel um this this is

(01:48):
really serious what they'retrying to do in terms of
reforming the DME space to cutdown on that fraud and abuse.
So uh what I'd like to do is umjump in and um talk about um
what the significant changes forDME providers are first, and

(02:10):
there will be um changes foraccreditation organizations as
well, but um let's go ahead andtalk about the DME provisions.
And you know, Kim, if you wantto uh lead this with Shannon, I
think that would be great sinceyou both are in the
accreditation space of ourorganization.

SPEAKER_01 (02:29):
Sure.
Well, I can certainly kick itoff and um talk about the focus
as it relates to survey and alsous as an accreditation
accrediting organization.
Um just to be clear, yes, CMS ummost definitely clarified
additional um oversight that uhand tightening of accreditation

(02:53):
and survey responsibilitiesrequirements for both providers
and for the AOs.
It appears as though some ofthese uh um um areas that were
uh placed into the proposed rulefor DME also stemmed in some
fashion with the uh prior uhhome health and hospice um

(03:16):
accrediting organizationoversight proposed rule that is
still, as far as I know, stillout still pending.
Um but seems as though theypulled so they pulled some of
that some of that language.
Although we have um incommunication with CMS, it's
clear that these provisions, uh,while they are similar, are not

(03:39):
uh aligned uh specifically withwhat would be the expectations
for the current or umanticipated processes for home
health and hospice.
So they are treating home healthand hospice, I mean uh DME
separately.
And you're right, it's theunderstanding is because there
has been a long um you knowmany, many years with uh very

(04:03):
with a lack of um of accordingto CMS um you know oversight,
which has then in many cases, orin some cases resulted in fraud.
Uh and um the although uh CMShas also increased audit
oversight, um, they're alsolooking to the accrediting
organizations to also, if youwill, lay eyes on the um the

(04:28):
agencies, the suppliers morefrequently to ensure compliance
with regulations and making someof those penalties uh more
stringent.
We um we saw this information orthis proposal, uh this
information or these um items inthe proposed rule um and not uh

(04:52):
but understanding now that theyhave all but a couple then
finalized all with overalleffective dates of January 1st,
2026.
So rapid turnaround.
But there is a little bit of umleeway that I think folks need
to just understand.
So um what I'll do is I'll talkabout the um I'll tell I'll talk

(05:12):
about the AO changes and thesurveys.
I would say, and Shannon,correct me if I'm wrong, the
biggest, um, the biggestchallenge 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 annualsurveys technically effective

(05:34):
January 1st, 2026.
That's been the number onecomment, I think, that that
certainly we have heard, and Ibelieve CMS also had heard.
It's important to understandthat CMS did clarify with the
AOs last week that the annual isin effect as of January 1st, but

(05:56):
will be will begin to berequired with any new suppliers
who are initially accredited oranyone who's re-accredited at
the time of theirreaccreditation.
Um their three-yearreaccreditation would now become
an annual accreditation.
So, for example, if someone hada supplier had a triennial

(06:17):
survey in 2025, um, they wouldnot be due for their next survey
until 2028, and at which timethen they would transition to
annual.
Or if they were surveyed in2024, it would be 2027.
So I think that that reallyhelped relieve, I think, some of

(06:39):
the concerns, certainly on theAO side, as we are gearing up to
ensure that we have qualifiedstaff, um, site visitors, but
also um for the suppliers aswell.
Because remember, DME is the oneum one supplier, certainly that
we accredited that is requiredto be accredited.

(07:00):
So accreditation is not anoption for a D a demipost
supplier.

SPEAKER_02 (07:04):
Um you know, Kim, I can tell you as a as an AO, I
felt like shoo in terms of theuh implementation plan.
I'm glad they sort of built thatglide flight into um the the
angle.
And that I think gets providersmore time to sort of wrap their
arms around what this is gonnamean for them in terms of

(07:27):
processes and costs and and allof those things.

SPEAKER_01 (07:31):
No, agreed.
And I would also say that um,you know, it also gives us as an
AO the time to make sure that wewe already have very well
qualified DME um site visitors,we call them surveyors, but to
be able to, you know, bolsterour our team and then also
ensure that, you know, umthere's a consistent

(07:53):
understanding of the standardsand the oversight processes.
That's as as the um the personalong with Shannon who oversees
the accreditation and surveyprocess, that's extremely
important.
Jennifer, I mean, um uh Shannon,did you um can you just make a
quick point about theelimination of the temporary
accreditation?

(08:14):
Because I do think that that'san important area that suppliers
need to understand andproviders.

SPEAKER_00 (08:20):
Absolutely.
So currently an AO may accredita new location for an existing
DemiPost supplier for threemonths after it's operational
without requiring a new sitevisit.
Um so what we would do is ifonce we're notified that an
organization, an alreadyaccredited organization, adds a
new location, um, we go aheadand extend accreditation and

(08:41):
then we conduct a site visitwithin 90 days.
However, effective January one,excuse me, effective January
one, all demi post suppliersmust be surveyed before being
accredited.
Uh so CMS can confirm that thelocation meets the standards.
Um so yes, that that is a bigchange.

SPEAKER_01 (09:01):
Yeah, absolutely.
And the other really is relatedto the CHOW, the change in
ownership or majority ownership,um, which is I'm gonna use the
term similar to the 36-monthrule that we see in home health
and hospice.
And so I um organizations needto understand our suppliers, if
they have a majority ownershipchange, they would actually be

(09:24):
surveyed as a as an initial umcertification, not um unless
they meet one of the exemptionsthat's that's in the rule.
And that this is importantbecause if an organization, if a
supplier is is then surveyed asan initial, they then become
subject to the annual surveyreview, uh survey timeline and

(09:49):
accreditation timeline fromthere forward.
Um so I so that I think that'sthat's an important note.
Did I um did I uh did I say thatcorrectly?

SPEAKER_00 (09:59):
You did.
Yes, you did.

SPEAKER_01 (10:01):
Yeah.
So um can you um Shannon, canyou 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 suppliersachieving a rate of 90% uh will
be offered an exemption from therequired prior authorization.
Um to determine suppliereligibility for continued

(10:29):
exemption, the MAX wouldcomplete a post-payment medical
review sample.
From this sample, suppliers canmeet a claim approval rate of
90% or greater to continue theexemption.
And suppliers who do not meetthe compliance rate must
continue submitting the priorauthorization requests.

SPEAKER_01 (10:50):
Yeah, I know.
Thanks for a little bit ofoverview.

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 bigrule.
It's full of a lot ofrequirements, a lot of changes.
But yeah, uh, we'll take umwe'll take any grace we can get
uh in terms of theimplementation.

SPEAKER_01 (11:22):
Absolutely.
And I know um Jennifer, uh yourteam, the quality team here at
CHAP, is also really busyworking on the changes that are
also going to be implementedthat impact your team as well as
the accreditation team andsuppliers.
Um, you know, both what are someof the things that that uh that

(11:44):
are impact, some of those itemsthat are impacting your um your
team, the quality team and theaccreditation process?

SPEAKER_02 (11:53):
Well, uh certainly there's you know the continued
data submission that we do do toCMS about the accreditation
surveys.
There will be some increaseddata that we will need to report
to CMS, and they're not uhforthcoming at the moment about
what that extra data is going tolook like, but certainly there

(12:16):
will be more data that we willhave to give them, and that's
really in line with all of theoversight uh that they have uh
finalized uh in this rule.
So data submission, and um, wedo have some changes with the
complaint process.
Um, we will have to giveinformation sooner and quicker

(12:37):
um about any complaints that arereceived uh about a supplier
that we accredited.
So we'll be uh making someprocess changes there.
And of course, just gettingready for um the volume of
annual surveys.
But as we said before, we dohave a bit of a ramp up for
that.
So that that's uh actually ablessing in disguise.

SPEAKER_01 (13:02):
Yeah, absolutely.
One of the items, one of the theelements that I identified that
will be also an added work umworkload, if you will, on the
accreditation team andultimately the quality team and
suppliers is the requirementthat we uh as if we accept a

(13:24):
corrective action or request acorrective action plan in lieu
of denying accreditation, thenthere needs to be a rationale
from the AO as to the reason forthe um the reason why a
corrective action plan has beenum permitted, if you will,
accreditation with an actionplan versus denial.

(13:44):
So it sounds as though you knowCMS is really tightening up the
um, you know, looking to see whyand how uh what why and how um
um DME providers and suppliersare being um accredited and if
there is any trending there.

SPEAKER_02 (14:04):
Yeah, absolutely.
So um that's gonna be animportant change for us.
You know, one thing that um wewe can mention today, and I'm
I'm gonna ask Shannon if shecould weigh in on it, even
though it's really not in thescope of what we do as an
accreditation organization, butthere were um some changes to

(14:25):
the competitive bidding program.
And I don't know, Shannon, ifyou feel like you could give
like the 50,000-foot highlightum 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 uhcategory of remote item
delivery, um, you know, whichincludes the CGMs, infusion
pumps, um, and then of courseyour disposable supplies, uh,
you know, ostomy, um, things ofthat nature.
So yeah, I think it's going tobe important for all DemiPose

(15:02):
organizations um, you know, toreally do due diligence, right?
And and read this and understandthe process, um, consult with
industry experts and be verypurposeful in their strategic
planning.

SPEAKER_02 (15:16):
Yeah, absolutely.
And thank you for that.
So, Kim, we did mention AOchanges on the horizon, right?
So we have been um uh approvedas a DME provider since the
beginning of the program.
So we are going into somechanges now, and hopefully um

(15:38):
you could talk about thatbecause I think as a uh DME
provider or supplier, they haveto be accredited, as you
mentioned.
So they really need tounderstand the accreditation um
parameters uh as they're goingto change, as well as the
parameters for them themselves.
So uh could you give us some ofthe highlights of what our AOs

(16:01):
are going to be required to door 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 CMSindicated uh to all of us, all
AOs on our call as well lastweek and on our individual
calls, um, that this is anevolving process, both for us,
for sub for us, for suppliers,as well as for CMS.

(16:31):
So there are many um you knowareas that we are um moving
forward with and then willlikely or hopefully receive some
um you know further guidance ummoving forward with the the um
you know the survey process.
But the survey process itself umis is really specific to each

(16:53):
AO, um and we do our standardsdo uh also meet the um the CMS,
the DME quality standards.
So that's what's the whatorganizations are are surveyed
against.
And it does depend on the typeof supplier in terms of the you
know the focus of the survey.
Uh we also have not just DEMIposts, but we also are um have

(17:17):
launched our infusion pharmacyum uh service line, which also
includes some limited DME.
Um so that also you know thatthat's all that's an area that
that is included.
We will need to reapply foraccreditate to be a deemed uh an
approved dean status provider umfor CMS, and that will come

(17:39):
likely sometime in firstquarter.
Um we also one of the the goodone of the things as a good news
is um at least so far is um CMSis agreeing to continuing
sampling.
Sampling is used for largerproviders, and this also was
another area that I think AOsand suppliers are breathing a

(18:02):
sigh of relief.
Now, at the moment, we have beeninstructed that our current uh
sampling methodology can beused, although we certainly can
evaluate to evaluate that, andthen um we will await uh any
further guidance you know fromCMS, if there is any in the
future.

(18:23):
But it is um that was a welcomechange because the original
proposed language and when itthis was originally um
published, uh the final rule itthere was a concern that, or
before that the final rule wasum published, it was there was a
grave concern that allsuppliers, all locations would

(18:45):
need to be surveyed.
Now, there does need to be asystematic way of reviewing
organizations, um but again atthis point it's really up to
each of the DME providers, I'msorry, the AOs to make that
determination.
And CMS is going to beconducting validation surveys

(19:07):
following AO surveys.
It appears as though at themoment, from what we understand,
that that that will be completedremotely.
Um and if there is a need for uhCMS to go on site following a um
uh an AO survey, I believe thatthere will be some communication
that occurs with that.
But again, that's an area that'salso um um, you know, uh uh up

(19:32):
for further further discussionand development and evolving,
evolv evolvement, if that's aword.
Um Shannon, do you have anythingto add?
I don't even know.
Yeah.

SPEAKER_00 (19:44):
No, that's good.
We it's always good that we makeup words on the fly.
I think the one thing to pointout is change of location,
right?
If an organization has anaddress change, even if it's
right across the street, um, youknow, what we were told is that.
Draw a hard line when it comesto that.
So we will be making uh sitevisits, you know, for that

(20:05):
change of address.
So again, um, it's important forthe organizations to be
strategic, right, in theirplanning process and and to know
for what the next year is goingto hold because you know
additional site visits arerequired.

SPEAKER_01 (20:21):
And they have to be, as as Jennifer pointed out, and
in the final rule, they need tobe approved with uh with a site
with a um you know with asurvey, right?
Um for the change of locationbefore it's not just a
notification.
And we know in other settings aswell that there are sometimes
delays, um, often not sometimes,very often, delays not from the

(20:46):
surveying entity, but from theprocessing, you know, from CMS
and the MAX are part of thatapproval process.
So I think it's a good point,Shannon, that you know,
suppliers really need to thinkthrough operationally, you know,
what their plan is going to bein terms of any moves.
Um, and the other is looking atwhat locations that you they

(21:09):
currently have as um both thesuppliers and or warehouses.
Um does that because how do Iguess my question to you,
Shannon, is um can you justexplain the um how being
designated as a warehouseimpacts the um you know the
survey requirement?

SPEAKER_00 (21:31):
Sure.
So CMS requires that all servicelocations, that's that's the
term that CMS uses.
Service locations uh you knowmust be accredited and of course
obviously require the PTAN.
Um warehouses can be extensionsof those service locations.
Uh so they don't necessarilyrequire their own PTAN.
However, some of the processesthat are conducted at a

(21:54):
warehouse location are what wewould determine, you know,
whether we're doing a site visitor not to that particular
warehouse.
So for example, if a servicelocation, meaning a location
where patients can come rightand pick up their equipment and
receive instruction, um, maybeat that service location they
don't necessarily clean andrepair equipment, but they do
that at a warehouse that's acouple of miles down the road,

(22:17):
um, you know, that warehousewould be seen in conjunction
with, right, that servicecenter, because uh we obviously
part of the accreditationprocess is to review and assess
compliance with infectioncontrol, you know, repair and
maintenance and those standardsas specified in the CMS quality
standards.
Um but you're right, to yourpoint, again, organizations uh

(22:39):
are going to be lookingstrategically, right, at whether
or not uh these locations aregoing to continue to be service
locations, whether some of themmay be changed to a warehouse,
or you know, whether or not someof them can be eliminated.
But again, that will go to theirstrategic 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 andShannon, what would you say um
to them?
What are what are sometakeaways?
What are um some pieces ofadvice you would give suppliers
today on December 15th, knowingthat the rule implements on

(23:18):
January 1?

SPEAKER_00 (23:21):
Yeah, absolutely.
If if I were a um a provider, Iwould be looking at my
resources, right?
I would be uh reaching out towhether it's a national
association, a stateassociation, uh being sure that
I do my homework, that Iunderstand exactly what's
required, and then sitting downwith my team, right?

(23:42):
To whether it's my budget orlooking at not only just the
next year, but maybe even thenext couple of years.
Again, you got to be verystrategic about this in order to
ensure that you continue toprovide 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 umread the final rule.
Read the final rule, listen towhat any um, you know, industry
webinars, um, state or nationalassociations or experts, um, as

(24:20):
well as certainly we haveourselves in addition to this
podcast, and uh we also have umfabulous resources that thank
you, Jennifer, have been pulledtogether to summarize what these
what these um the final rule umkey elements are and the direct
impact on suppliers.

(24:41):
Also understand that um theseare the while everything is
effective January 1st, 2026,there are some processes um that
will be evolving both from CMSas well as from the AOs.
So just staying in communicationwith you know um us if if we're

(25:05):
if you're if um you know ifyou're accredited by CHAP or
your AO to ensure that that youalso understand those those
changes as well.
So um uh mostly staying uh aheadof what those and knowing what
those requirements are andstaying connected.

SPEAKER_02 (25:22):
Excellent.
Yes, and there are there arethings out there for uh folks to
read, but they gotta read.
They have to actually read thesummaries and all of the
different blogs that are outthere.
Well, thank you so much, uh Kimand Shannon uh for laying out
the um ABCs of the DMEprovisions of this rule.

(25:44):
Any final parting thoughts forour listeners?

SPEAKER_00 (25:50):
No, just be knowledgeable, right?
And um, you know, put your timeand 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 theroad, right?
Yeah.
Oh my gosh.
Well, thanks so much uh to bothof you, and thanks to all of you
out there uh for taking time outof your day uh to listen to our
DME podcast.
So from Kim and Shannon and meand the entire CHAP staff, keep

(26:29):
your quality needle movingforward, stay safe and well, and
thanks for all you do.