Texas: Surety bond issues galore

Tuesday, August 25, 2015

AUSTIN, Texas – Texas Medicaid is deactivating some DME providers for not having a current surety bond on file, even though, technically, they do.

Provider Alicia Correa, owner of San Antonio-based Bexar Care Home Medical, lost $100,000 in Medicaid business over three weeks because the agency couldn’t locate her original bond. At press time, Correa’s provider number was on hold, even though the agency has since acknowledged that it does indeed have her bond. 

“It’s a huge problem for many customers,” said LeAnn Kelly, surety bond portfolio manager at VGM Insurance Services. “Some people called Medicaid, verified that their bond was in place and they still got deactivated.” 

Texas Medicaid started requiring providers to purchase $50,000 surety bonds for each enrolled location in 2013, but the agency hasn’t enforced the policy until recently, Kelly says. Providers without a 2015 surety bond on file were deactivated June 1, even if their 2014 surety bond didn’t expire until later in the month.

That’s what happened to Spearhead Home Medical in Amarillo, Texas. Beth Depew, manager, called Texas Medicaid after a claim was denied and was told the provider was “placed inactive.”

“I told them, ‘Our bond is good until June 6,’” she said. “You can’t just deactivate us early unless you’re going to refund us some money.”

After speaking with a supervisor, who escalated the issue, Depew was able to get the number reactivated.

Other reasons providers have been deactivated: They’ve submitted Texas Medicaid surety bonds without a signature, and the bonds they’ve submitted have suffixes on their provider numbers that aren’t properly linked in the state’s system.