Re: Medicare Issues Final Rule Requiring Surety Bonds for DMEPOS

Re: Medicare Issues Final Rule Requiring Surety Bonds for DMEPOS

Don Foley

1/6/2009

Dear List,
 
The Surety Bond requirements are still being worked out between CMS and the
National Assoc. of Surety Bond Producers (NASBP), and we are waiting on the
final 'bond language' to be released as of today, 1/06/08.
As soon as NASBP and CMS release the bond language and requirements Cailor
Fleming will post the information on this listserve.
 
Acquiring this type Surety Bond can be a lengthy process due to the fact
that these bonds are not an insurance policy, but, by definition, 'a
guarantee given for fulfillment of an obligation, the person or organization
that guarantees fulfillment of an obligation or the underwriter that
guarantees something in the coverage of a bond'. This means that if bonds
are used (as in a dispute with Medicare), then the O&P facility will have to
pay back the bond immediately, and because of this the bond companies will
want, at a minimum, company financial statements and personal financial
statements of the owners. Additional information such as bank lines of
credit and CPA prepared reviews may be necessary depending on the size of
your operation.
 
We recommend you start this process 90 days prior to October 2nd.
 
Cailor Fleming has been in contact with the NASBP since 2007, and contacted
them again last week when this news first came out, so our plan is to have
final answers this week and as soon as we get the info it will be posted on
this listserve.
 
Thank you,
 
Don Foley
Cailor Fleming Insurance
800.796.8495
 
 
 
 
 
-----Original Message-----
From: Orthotics and Prosthetics List [mailto:<Email Address Redacted>] On
Behalf Of Elizabeth Mansfield
Sent: Wednesday, December 31, 2008 8:05 AM
To: <Email Address Redacted>
Subject: [OANDP-L] Medicare Issues Final Rule Requiring Surety Bonds for
DMEPOS
 
CMS today issued a final surety bond regulation, required by the
Balanced Budget Act of 1997, that makes certain suppliers of durable
medical equipment, prosthetics, orthotics and supplies (DMEPOS) post a
$50,000 surety bond. Existing suppliers must comply with this
requirement by Oct. 2, 2009 while newly enrolling suppliers must meet
this requirement by May 4, 2009. This requirement was due in part to
the large number of improper and potentially fraudulent payments to
medical equipment suppliers for furnishing medical equipment and
devices to people with Medicare. The 2007 Medicare error rate report
found approximately $1 billion in improper payments for medical
equipment and supplies.
 
While this regulation requires most suppliers to obtain a surety bond,
some companies or organizations that supply these items are exempt from
the surety bond requirement, including certain physicians and
non-physician practitioners, physical and occupational therapists,
state-licensed orthotic and prosthetic personnel, and government-owned
suppliers.
 
READ MORE
<URL Redacted>
quiring-surety-bonds-for-dmepos-suppliers-and-takes-next-step-in-fighting-ho
me-health-fraud.html
 
 
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