The Joint Commission on Accreditation of Healthcare Organizations early next month will decide on the amount of a general fee increase for all accreditation programs in 2005, which could rekindle a hospital industry debate about survey value that had cooled in recent months.
The JCAHO's board of commissioners will hold a meeting Sept. 7 "to consider various fee increase scenarios," according to an item in the accrediting agency's monthly electronic news briefing called JCAHOnline. According to the item, a fee increase will be instituted; the decisions will be about the amount, which will vary for each accreditation program.
The last general rate increase of 3.25% was instituted in 2000 for all programs except ambulatory-care and home-care accreditation, and the increase in 2005 will be only the second in a decade, the JCAHO said. But the prospect of higher survey fees doesn't sit well with the American Hospital Association.
"The AHA takes a dim view of the increase at this time," said spokesman Richard Wade. He said the fee increases would be "counterproductive" to the campaign in recent years to establish that the cost of accreditation is at least equal to the value received from it.
Persistent complaints from providers about the high cost of preparation and questionable relevance of the traditional survey process led to a complete redesign and a focus on quality-improvement issues (Oct. 7, 2002, p. 8). Since the debut of the new accreditation process in January, criticism that it doesn't provide value "has largely quieted lately," Wade said.
But value is a function of return on the money spent, and a fee increase would reintroduce the gap between cost and payback that started the complaints in the first place, he said. In addition, other hits to the financial health of hospitals loom in 2005, when for example "the government turns attention to deficits" that could affect Medicare payments, Wade said.
The JCAHO has it own deficits to tackle. Beset by slumping survey revenue, the accrediting agency lost $1.5 million on operations in 2003 (July 19, p. 10). Hospital surveys and revenue have remained steady, but the number of total surveys for all programs has declined 29% from the peak year of 1998, and survey revenue has declined nearly 20% in that time. Another 4% decrease in surveys was predicted for 2004.
According to the JCAHOnline item, the fee increase is "directly attributed to inflation, improved customer support and increases for surveyor compensation and training."
The deficit in 2003 was the second straight after two years of eight-digit surpluses that had provider representatives calling for the JCAHO to hold the line on fee increases. But those profits came mainly from reducing operating costs.
The fortunes of the accreditation operation were raised during those deficit years by the performance of a not-for-profit subsidiary called Joint Commission Resources. The unit earned $6.8 million in 2003 and $5.5 million in 2002 after a major reorganization beginning in 2001 that transferred a substantial portion of the parent organization's business activities to its once-minor subsidiary.