The Centers for Medicare & Medicaid Services (CMS) has issued a final regulation that requires most suppliers of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) to post a $50,000 surety bond. The regulation specifically includes O&P suppliers who do not have state licensure. Existing suppliers must comply with this requirement by October 2, 2009, and newly enrolling suppliers must meet this requirement by May 4, 2009. CMS stated, "The surety bond requirement is designed to limit the Medicare program risk from fraudulent equipment suppliers and help to ensure that only those suppliers who remain in the program furnish items...that are considered reasonable and necessary.... The 2007 Medicare error rate report found approximately $1 billion in improper payments for medical equipment and supplies."
Suppliers who have had certain adverse legal actions imposed against them in the past may also be required to post a higher bond amount. All newly enrolling suppliers who do not have state licensure will be required to have a surety bond before they can enroll in the Medicare program.
"We know the majority of medical equipment suppliers and healthcare providers want to improve the health of Medicare beneficiaries, but we also know there are those who look for any opportunity to take advantage of beneficiaries and Medicare," said CMS Acting Administrator Kerry Weems. "The steps we are taking today provide us with additional oversight of the suppliers who furnish medical equipment to Medicare beneficiaries..."
CMS states that while the new 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."
More information about the new regulation can be found at www.cms.hhs.gov/medicareprovidersupenroll
