Re: Surety Bonds
Wil Haines
Description
Collection
Title:
Re: Surety Bonds
Creator:
Wil Haines
Date:
1/12/2009
Text:
Hello Colleagues & Guests,
I'm certainly not up to snuff (at times I wish I were (especially in
the last couple of years)....snuffing that is,) but is there any
evidence that CMS will require a surety bond from licensed orthotists
and prosthetists? I thought that I had read this was likely to be an
exemption from the surety bond requirement. Are physicians and licensed
therapists required to post such a bond? Just curious.
Wil Haines, CPO
Don Foley wrote:
> Dear List,
>
> There has been a lot of information going around about the new Surety Bond
> requirement but as of today, 1/12/09, the bond language is still unclear and
> The Surety & Fidelity Association of America (SFAA) and the National
> Association of Surety Bond Producers (NASBP) are still working with CMS to
> get clarification as to how the final bond is to read, and what the
> expectation is as to ‘when’ the bond is supposed to respond in the event of
> a claim by Medicare.
> Without clarification and a standard bond form it is unwise to jump the gun.
>
> Cailor Fleming is in talks with several of the largest bond companies in the
> country, but their position is on hold until they resolve the final
> language.
>
> What we do know is that on January 2, 2009, seventeen months after proposing
> the regulation and eleven years after the authorizing statute was enacted,
> CMS issued the final regulations concerning the bond requirements for
> DMEPOS.
>
> The Balanced Budget Act of 1997 requires all DMEPOS suppliers to provide a
> surety bond in an amount not less than $50,000. Under final regulations,
> beginning October 2, 2009, CMS will require DMEPOS suppliers to post a
> separate surety bond in the amount of $50,000 for each NPI number to which
> Medicare has granted billing privileges. Beginning May 4, 2009, the
> following entities are required to submit a $50,000 bond:
>
> * Suppliers enrolling in the Medicare program, making a change in
> ownership or responding to a revalidation or re-enrollment request;
> * Suppliers that seek to become an enrolled DMEPOS supplier through a
> purchase or transfer of assets or ownership interest; and
> * New practice locations of a DMEPOS supplier
>
> For “high risk” suppliers, those that have a history of adverse legal
> action, a larger bond will be required. The increase will be $50,000 per
> adverse legal action, plus the base amount of $50,000. The regulations
> define ‘adverse legal action’ as (1) a revocation of Medicare billing
> privileges, (2) a suspension or revocation of a license to provide health
> care, (3) revocation or suspension by an accrediting organization, (4) a
> conviction of a federal or state felony offense within the 10 years
> preceding enrollment, revalidation or re-enrollment or (5) an exclusion or
> debarment from participation in a federal or state health care program.
>
> Under the bond, the surety is required to pay CMS, within 30 days of
> receiving sufficient evidence establishing liability: (1) the amount of any
> unpaid claim for which the supplier is responsible, and (2) the amount of
> any civil money penalty (“CMP”) or assessment imposed by CMS or the Office
> of Inspector General.
>
> The regulation exempts the following groups from posting the bond: 1)
> Government-operated DMEPOS suppliers if the supplier has provided CMS with a
> comparable surety bond under State law; 2) State-licensed Orthotic and
> prosthetic personnel in private practice making custom made Orthotics and
> prosthetics if the business is solely-owned and operated by the Orthotic and
> prosthetic personnel, and the business is only billing for Orthotic,
> prosthetics, and supplies; 3) Physicians and non-physician practitioners; 4)
> Physical and occupational therapists.
>
> The regulation is not a model of clarity (to say the least) and requires
> clarification, particularly with respect to the scope of the bond’s
> coverage. We also need to find out if C-Corps and S-Corps (let alone LLC’s)
> in licensed states are exempt, and we need to determine if all satellite
> locations truly need a bond.
>
> Lastly, these issues regarding the clarity of the regulation call for a
> standard bond form. CMS is arguing against this suggestion and appears not
> to want to put itself on the line by committing to a standard language,
> which will only serve to leave the issue grey and murky. Nonetheless, as
> soon as the Surety Association and the bond companies feel comfortable
> enough to proceed, we will inform this list.
>
> Thanks Again,
>
> Don Foley
> Cailor Fleming
> 800.796.8495
>
> No virus found in this outgoing message.
> Checked by AVG.
> Version: 7.5.552 / Virus Database: 270.10.6/1888 - Release Date: 1/12/2009
> 7:04 AM
>
>
>
I'm certainly not up to snuff (at times I wish I were (especially in
the last couple of years)....snuffing that is,) but is there any
evidence that CMS will require a surety bond from licensed orthotists
and prosthetists? I thought that I had read this was likely to be an
exemption from the surety bond requirement. Are physicians and licensed
therapists required to post such a bond? Just curious.
Wil Haines, CPO
Don Foley wrote:
> Dear List,
>
> There has been a lot of information going around about the new Surety Bond
> requirement but as of today, 1/12/09, the bond language is still unclear and
> The Surety & Fidelity Association of America (SFAA) and the National
> Association of Surety Bond Producers (NASBP) are still working with CMS to
> get clarification as to how the final bond is to read, and what the
> expectation is as to ‘when’ the bond is supposed to respond in the event of
> a claim by Medicare.
> Without clarification and a standard bond form it is unwise to jump the gun.
>
> Cailor Fleming is in talks with several of the largest bond companies in the
> country, but their position is on hold until they resolve the final
> language.
>
> What we do know is that on January 2, 2009, seventeen months after proposing
> the regulation and eleven years after the authorizing statute was enacted,
> CMS issued the final regulations concerning the bond requirements for
> DMEPOS.
>
> The Balanced Budget Act of 1997 requires all DMEPOS suppliers to provide a
> surety bond in an amount not less than $50,000. Under final regulations,
> beginning October 2, 2009, CMS will require DMEPOS suppliers to post a
> separate surety bond in the amount of $50,000 for each NPI number to which
> Medicare has granted billing privileges. Beginning May 4, 2009, the
> following entities are required to submit a $50,000 bond:
>
> * Suppliers enrolling in the Medicare program, making a change in
> ownership or responding to a revalidation or re-enrollment request;
> * Suppliers that seek to become an enrolled DMEPOS supplier through a
> purchase or transfer of assets or ownership interest; and
> * New practice locations of a DMEPOS supplier
>
> For “high risk” suppliers, those that have a history of adverse legal
> action, a larger bond will be required. The increase will be $50,000 per
> adverse legal action, plus the base amount of $50,000. The regulations
> define ‘adverse legal action’ as (1) a revocation of Medicare billing
> privileges, (2) a suspension or revocation of a license to provide health
> care, (3) revocation or suspension by an accrediting organization, (4) a
> conviction of a federal or state felony offense within the 10 years
> preceding enrollment, revalidation or re-enrollment or (5) an exclusion or
> debarment from participation in a federal or state health care program.
>
> Under the bond, the surety is required to pay CMS, within 30 days of
> receiving sufficient evidence establishing liability: (1) the amount of any
> unpaid claim for which the supplier is responsible, and (2) the amount of
> any civil money penalty (“CMP”) or assessment imposed by CMS or the Office
> of Inspector General.
>
> The regulation exempts the following groups from posting the bond: 1)
> Government-operated DMEPOS suppliers if the supplier has provided CMS with a
> comparable surety bond under State law; 2) State-licensed Orthotic and
> prosthetic personnel in private practice making custom made Orthotics and
> prosthetics if the business is solely-owned and operated by the Orthotic and
> prosthetic personnel, and the business is only billing for Orthotic,
> prosthetics, and supplies; 3) Physicians and non-physician practitioners; 4)
> Physical and occupational therapists.
>
> The regulation is not a model of clarity (to say the least) and requires
> clarification, particularly with respect to the scope of the bond’s
> coverage. We also need to find out if C-Corps and S-Corps (let alone LLC’s)
> in licensed states are exempt, and we need to determine if all satellite
> locations truly need a bond.
>
> Lastly, these issues regarding the clarity of the regulation call for a
> standard bond form. CMS is arguing against this suggestion and appears not
> to want to put itself on the line by committing to a standard language,
> which will only serve to leave the issue grey and murky. Nonetheless, as
> soon as the Surety Association and the bond companies feel comfortable
> enough to proceed, we will inform this list.
>
> Thanks Again,
>
> Don Foley
> Cailor Fleming
> 800.796.8495
>
> No virus found in this outgoing message.
> Checked by AVG.
> Version: 7.5.552 / Virus Database: 270.10.6/1888 - Release Date: 1/12/2009
> 7:04 AM
>
>
>
Citation
Wil Haines, “Re: Surety Bonds,” Digital Resource Foundation for Orthotics and Prosthetics, accessed November 23, 2024, https://library.drfop.org/items/show/230012.
