Senate requests $500k surety bond for HME

 - 
02/12/2008

Penelope buy The 13th Warrior divx I'm sure you'll be hearing a lot more about this in the coming days and weeks and with good reason. It could knock a lot of small providers out of business.

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Here's what AAHomecare reported this morning about the proposal:

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ALEXANDRIA, Va. — A Senate bill introduced last week would impose a $500,000 surety bond requirement on providers of durable medical equipment (DME) under Medicare and would put thousands of small homecare companies out of business, says the American Association for Homecare.

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A law passed in 1997 requires a $50,000 surety bond for DME providers as a deterrent to fraud and abuse. However, the federal government has never actually implemented the surety bond requirement for the DME sector. The Centers for Medicare and Medicaid Services has proposed that the amount increase to $65,000.

The bill introduced last week, S. 2603, called the “Medicare Fraud Prevention Act of 2008,” would increase the $50,000 surety bond requirement by a factor of 10. The bill would also increase civil and criminal fines for Medicare fraud and abuse. The bill is sponsored by Senators Mel Martinez (R-Fla.), John Cornyn (R-Texas), Norm Coleman (R-Minn.), Lamar Alexander (R-Tenn.), David Vitter (R-La.) and Jim DeMint (R-S.C.).

“The impact of a half-million dollar surety bond requirement would be devastating on law-abiding small providers,” said Tyler J. Wilson, president of the American Association for Homecare. “This provision would put a lot of home medical equipment providers out of business without fixing the fraud and abuse problem. No one is more concerned about getting criminals out of Medicare than the homecare sector, but this is clearly a case of throwing the baby out with the bathwater. Why would the government increase the surety bond by 1000 percent before it has even implemented the original amount?”

Insurance experts say a $500,000 surety bond would require that DME providers put up collateral to back the half-million-dollar bond, on top of the $10,000 to $20,000 cost of the bond.