April 23, 2009 - MLN Matters Article
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On December 29, 2008, the Centers for Medicare and Medicaid Services (CMS) issued its final rule implementing a requirement that mandates HME providers to furnish CMS with a $50,000 surety bond in order to participate in the Medicare program.
In a teleconference earlier this month, CMS confirmed the deadlines for DMEPOS providers’ surety bonds would be enforced as set out in its final rule on the new requirement. A transcript and audio from this open door forum is available at the Special Open Door Forum Website.
Effective Dates of Surety Bond Requirement
Providers enrolling in the Medicare program for the first time, existing providers undergoing a change of ownership, or existing providers establishing a new practice location are required to submit a surety bond to the National Supplier Clearinghouse (NSC) with their CMS-855S enrollment application on or before May 4, 2009.
Currently enrolled DMEPOS suppliers are required to submit a valid surety bond to the NSC by October 2, 2009.
CMS recommends that providers required to meet the October 2, 2009, implementation date should begin the work for the bonding as soon as possible and estimates that the average annual bond cost is approximately 3 percent of the value of the bond, or around $1,500 per $50,000 bond.
Requirements for Multiple Locations
Providers subject to the bonding requirement are required to obtain a surety bond for each practice location that has a separate National Provider Identifier (NPI). Thus, if a provider has two separately-enrolled DMEPOS locations, each with its own NPI, it must obtain $50,000 worth of bond coverage for each location. This can be accomplished by obtaining two $50,000 bonds or a single $100,000 bond. If the provider elects to obtain one bond that covers multiple locations, however, the bond must specify the locations it encompasses.
Required Documentation
Surety bond documentation submitted to CMS should include a copy of the bond agreement, as well as any certificates of proof. If the National Supplier Clearinghouse (NSC) requires additional supporting documentation, it will contact the provider accordingly.
CLICK HERE for a list of frequently asked questions and answers from the National Supplier Clearing House.
GAMES associate members can work with you on obtaining your required surety bond!
McNeil & Company – HOMed Insurance/Risk Management Program
Valarie VanGorder
800-822-3747
Hutton Madden
678-714-9198
Offering discounts to current clients! CLICK HERE for an update from Pharmacists Mutual.
The Surety Group Agency LLC
Sam Newberry
404-352-8211
snewberry@suretygroup.com
VGM Insurance
Call the VGM Bond Hotline 866-497-0472!
!! IMPORTANT NOTE !!
GAMES members are encouraged to contact each organization and make the best business decision for your own organizations! However, should you decide to purchase your surety bond though VGM’s program, please be sure to answer “yes” to the question “Were you referred or given a code by an organization or State Association?". Next, please enter GAMES as the referring organization. VGM has generously offered to support your association through a (small) revenue share for all referrals.
December 31, 2008 - From NIH Listserv
CMS STRENGTHENS EFFORTS TO FIGHT MEDICARE
WASTE, FRAUD AND ABUSE
Medicare Issues Final Rule Requiring Surety Bonds for DMEPOS Suppliers and
Takes Next Step in Fighting Home Health Fraud
The Centers for Medicare & Medicaid Services (CMS) announced it is requiring certain durable medical equipment suppliers to post a surety bond.
CLICK HERE to read the press release from CMS.
December 30, 2008 - From VGM
CMS Releases Final Rule for Surety Bond Requirement
CMS has issued the final rule requiring surety bonds for DMEPOS providers. In a letter to some House and Senate Committees (see below), Acting Director of the Office of Legislation, Don Johnson stated that the new regulations would “make certain” that DME providers would post a $50,0000 surety bond. Johnson’s letter also indicated that providers who “have had certain adverse legal actions imposed against them in the past may also be required to post a higher bond amount.”
The following is the letter from Don Johnson to Congress:
U.S. House and Senate Notification
Monday, December 29, 2008
To: Senate Finance Committee
House Ways and Means Committee
House Energy and Commerce Committee
House and Senate Appropriations Committees
House and Senate Budget Committees
Other Interested Hill Staff
From: Don Johnson, Acting Director of the Office of Legislation
Centers for Medicare & Medicaid Services
Subject: Medicare Issues Final Rule Requiring Surety Bonds for DMEPOS Suppliers
Today, CMS issued a final surety bond regulation, required by the Balanced Budget Act of 1997, that makes certain suppliers of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) post a $50,000 surety bond. While this regulation requires most suppliers to obtain a surety bond, some companies or organizations that supply these items are exempt from the surety bond requirement, including certain physicians and non-physician practitioners, physical and occupational therapists, state-licensed orthotic and prosthetic personnel, and government-owned suppliers.
Suppliers who have had certain adverse legal actions imposed against them in the past may also be required to post a higher bond amount. All newly enrolling suppliers that meet the requirements of the rule will be required to have a surety bond before they can enroll in the Medicare program.
The general effective date for the rule will be March 3, 2009 (60 days after publication). § 424.57(d)(1)(i) (DMEPOS suppliers seeking enrollment or with a change in ownership) will be effective May 4, 2009 (90 days after publication) and § 424.57 (d)(1)(ii) (existing DMEPOS suppliers) will be effective on October 2, 2009 (9 months after publication).
A press release is forthcoming. The regulation is available at the following link: http://www.federalregister.gov/inspection.aspx#special In addition, more information will be available shortly on www.cms.hhs.gov/MedicareProviderSupEnroll.
If you have any questions, please contact Lisa Yen (202-690-5524 or lisa.yen@cms.hhs.gov) or Maria Martino (202-690-5512 or maria.martino@cms.hhs.gov) in the CMS Office of Legislation. Thank you.
December 29, 2008 - Summary of Policy from AAHomecare:
CMS Releases Burdensome Requirements in Surety Bond Final Rule
Today, the Centers for Medicare and Medicaid Services (CMS) issued its final rule implementing a requirement that mandates HME providers to furnish CMS with a $50,000 surety bond in order to participate in the Medicare program. This rule implements provisions included in the Balanced Budget Act of 1997.
In its analysis of the rule, CMS states that HME provider costs for securing a bond will be approximately $1,500 per year. The Agency also estimates that as many as 25,188 DMEPOS providers will exit Medicare due to the combined costs of the surety bond and accreditation requirements.
The Association has been on record as supporting effective methods to eliminate fraud in the DMEPOS arena, yet we are concerned that overly burdensome requirements applying a “one-size fits all” approach to deter fraud have real potential to harm legitimate homecare providers. We are also very concerned that this new requirement could create access problems for Medicare beneficiaries who are in need of home medical equipment, therapies and services.
For these reasons, the Association has developed a 13-point plan targeting Medicare waste, fraud and abuse. The Association’s proposal targets efforts at the most vulnerable aspects of the program such as requiring mandatory site inspections for all new home medical equipment providers, requiring a six-month trial period for new homecare providers, and establishing real-time auditing to identify aberrant Medicare billing as it is occurring. The Association’s proposal can be viewed at www.aahomecare.org.
The following is a brief summary of the key provisions of the surety bond rule:
Regulations on obtaining a $50,000 surety bond:
- Nine months after the effective date of this final rule (Oct. 2, 2009), CMS will require a separate surety bond for each National Provider Identifier (NPI) number to which Medicare has granted billing privileges. This requirement is for Medicare suppliers currently enrolled in the program;
- New HME providers seeking to enroll in Medicare or those HME providers changing ownership will be required to have a surety bond by May 4, 2009;
- Increased bond amount will be required for suppliers deemed to be “high-risk”:
- High-risk suppliers are defined as any supplier with at least one “adverse legal action” imposed on them.
- The National Supplier Clearinghouse defines an ‘elevated bond amount’ of $50,000 per occurrence (in addition to the base surety bond amount of $50,000) of an adverse legal action. (Adverse legal action is defined as a revocation of Medicare billing privileges, a suspension or revocation of a license to provide health care; revocation or suspension by an accreditation organization; a conviction of a Federal or State felony offense within the 10 years preceding enrollment, revalidation, or re-enrollment or an exclusion or debarment from participation in a Federal or State health care program).
- No later than 120 days after publication of the final rule, CMS will notify each existing DMEPOS supplier by mail of the need to obtain an elevated bond to maintain its enrollment in the program. DMEPOS suppliers that have a significantly higher level of risk must maintain the higher surety bond amount for 3 years.
Entities Who Are Exempt from the Bond Requirement:
- Government-operated DMEPOS suppliers are provided an exception to the surety bond requirement if the DME supplier has provided CMS with a comparable surety bond under State law.
- State-licensed orthotic and prosthetic personnel in private practice making custom made orthotics and prosthetics are provided an exception to the surety bond requirement if-
(1) The business is solely-owned and operated by the orthotic and prosthetic personnel, and
(2) The business is only billing for orthotic, prosthetics, and supplies.
- Physicians and non-physician practitioners as defined in section 1842(b)(18) of the Act are provided an exception to the surety bond requirement when items are furnished only to the physician or non-physician practitioner’s own patients as part of his or her physician service.
- Physical and occupational therapists in private practice are provided an exception to the surety bond requirement if—
(1) The business is solely-owned and operated by the physical or occupational therapist;
(2) The items are furnished only to the physical or occupational therapist’s own patients as part of his or her professional service; and
(3)The business is only billing for orthotics, prosthetics, and supplies.
Entities Who Are Not Exempt from the Bond Requirement:
o Pharmacies and community pharmacies,
o Publicly-traded chain DMEPOS suppliers;
o Established DMEPOS suppliers,
o Home-health agencies and hospices;
o Skilled Nursing Facilities;
o Rural DMEPOS suppliers;
o Medical supplies companies that employ orthotic or prosthetic personnel.
GAMES associate members can work with you on obtaining your required surety bond!
McNeil & Company – HOMed Insurance/Risk Management Program
Valarie VanGorder
800-822-3747
Hutton Madden
678-714-9198
Offering discounts to current clients! CLICK HERE for an update from Pharmacists Mutual.
The Surety Group Agency LLC
Sam Newberry
404-352-8211
snewberry@suretygroup.com
VGM Insurance
Call the VGM Bond Hotline 866-497-0472!
!! IMPORTANT NOTE !!
GAMES members are encouraged to contact each organization and make the best business decision for your own organizations! However, should you decide to purchase your surety bond though VGM’s program, please be sure to answer “yes” to the question “Were you referred or given a code by an organization or State Association?". Next, please enter GAMES as the referring organization. VGM has generously offered to support your association through a (small) revenue share for all referrals.
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