Surety bond rule sticks
WASHINGTON--CMS approved a surety bond application for the HME industry in April, and new providers and those changing ownership had to obtain $50,000 bonds by May 4.
The bulk of providers, those already part of the program, must obtain bonds by Oct. 2.
“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.
Approved carriers can be found on the Department of Treasury Web site.
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 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 against it, must the provider purchase an elevated surety bond for each location or just the location against which the action was taken?