CMS issued on December 29, 2008 a final rule concerning surety bonds that requires HME providers to post a $50,000 surety bond. By Oct. 2, 2009, current HME providers must deliver CMS a bond or they will not be able to continue participating in the Medicare program.

New HME providers seeking to bill Medicare and  HME providers changing ownership must post a surety bond by May 4, 2009.

Providers have technically been required to keep a $50,000 surety bond as a fraud deterrent since 1997 as part of the Balanced Budget Act of that year. However up to now, the federal government has never actually implemented the surety bond requirement.

The Centers for Medicare and Medicaid Services had initially proposed earlier in 2008 that the requirement should be boosted to $65,000.

The requirement is lower than previous surety bond legislation that was under consideration in Congress. In February 2008, a bill was introduced into the Senate that would have required 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.

The American Association for Homecare says it is working with AON Affinity Insurance Services to deliver a cost-effective industry surety
bond program. Interested providers should contact AON Affinity at 1-800-544-2672 and reference source code AAHC.