Senate Bill Could Cost Providers Up to $20,000
A new bill introduced to the Senate in February would require HME providers to retain a $500,000 surety bond, which would cost them between $10,000 and $20,000 and would also require providers put up collateral to back it.
Providers have been required to keep a $50,000 surety bond as a fraud deterrent since 1997.
However, while the Centers for Medicare and Medicaid Services has proposed the requirement should be boosted to $65,000, the federal government has never actually implemented the surety bond requirement, according to the American Association for Homecare.
Co-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.), Senate bill S.2603 would bump the $50,000 requirement to $500,000 and would at least double civil and criminal fines for Medicare fraud.
“The impact of a half-million dollar surety bond requirement would be devastating on law-abiding small providers,” said AAHomecare president Tyler Wilson in a prepared statement. “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?
“The Association continues to work with federal agencies and Congress to prevent fraudulent activity in the DME sector,” Wilson said, “However, it is essential for the public and Congress to understand that the Medicare program has failed to effectively exercise its already ample authority to combat fraud and abuse. And while increased civil and criminal penalties may help thwart fraud and abuse in Medicare, we suspect that most of the people who willingly engage in such activity will not be deterred by higher penalties.”
AAHomecare pushed for CMS to concentrate on accreditation as a more effective tool in fighting fraud. Read “Accreditation: Time Is Running Out,” to learn more about CMS accreditation.
This article originally appeared in the March 2008 issue of HME Business.