Industry seeks improvements to surety bond program

Thursday, June 21, 2012

WASHINGTON – Industry stakeholders yesterday submitted comments to CMS outlining concerns with a recent wave of claims against surety bonds—some triggered by overpayments as low as $16.

"Our position is that the surety bond is an anti-fraud tool; it is not a collection instrument and should not be used for that purpose," said Walt Gorski, vice president of government affairs for AAHomecare and a member of a newly formed stakeholder group. "CMS does recognize that there is a problem here and that changes need to be made."

CMS started requiring HME providers to obtain surety bonds in 2009. A report released by the Office of Inspector General last fall criticized the agency for failing to recoup overpayments through surety bonds. In recent months, underwriters have noticed an increase in claims for overpayments.

The stakeholder group, which includes the Wayne van Halem Group, U.S. Rehab and VGM Insurance, recommends that CMS only allow DME MACs to trigger a surety bond if a threshold dollar amount is reached. 

The group also asked for better communication throughout the process, including more notice for providers when the surety bond is about to be triggered; and allowing surety bond companies more time to notify providers that the surety bond is about to be triggered, which would allow them to take corrective action.

If changes aren't made, the group stated, surety bonds will be hard to underwrite and surety companies will exit the business.


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