Surety bond application gets green light
WASHINGTON - CMS has approved a surety bond application for the HME industry, opening the door for providers to purchase bonds from approved carriers.
For months now, providers could only begin the process by filling out preliminary applications.
"Let the races begin," said Bill McMahon, an account executive for Boardman, Ohio-based Cailor Fleming Insurance, which offers bonds through Western Surety/CNA Surety.
The approved application comes none to soon: New providers and those changing ownership must obtain $50,000 bonds by May 4. Existing providers must obtain bonds by Oct. 2. Approved carriers can be found on the Department of Treasury Web site: http://www.fms.treas.gov/c570/c570_a-z.html.
Industry sources, echoing the calls to action when the accreditation requirement was announced, say providers should apply to obtain bonds sooner rather than later.
"Whoever they pick, providers need to start the process now," said John Spragle, president of Waterloo, Iowa-based VGM Insurance, which offers bonds through Lexon Insurance. "If providers sit and wait until the last minute, there are going to be way too many of them submitting applications and the carriers aren't going to be able to handle it."
AAHomecare's Tilly Gambill agreed.
"From what we're hearing, the process could take up to six months, depending on how a provider's financial statements come in," said Gambill, manager of marketing and communications for the association, which offers bonds through Aon Affinity Insurance Services and its carriers.
Some providers may get some good news when they apply to obtain their bonds, industry sources say. Although CMS estimated that the cost of obtaining a bond would be about $1,500, it may cost as little as $250 to $500 for some providers.
"Providers should shop around, because I've seen a lot of different prices," McMahon said.
The industry continues to work with CMS to get answers to several outstanding questions. Among them: If a provider re-enrolls for an existing supplier number, must the provider have a bond in place by May 4 or Oct. 2; and if a multi-location provider has an adverse action against it, must the provider purchase an elevated surety bond for each location or just the location against which the action was taken?