HHS announced a proposed rule that would require DMEPOS to post a $65,000 surety bond as a condition of Medicare participation.
Intended to reduce fraud by increasing the cost of entry into the business, the bond was originally required by the 1997 Balanced Budget Act, although that legislation specified a slightly less expensive $50,000 bond. CMS’ predecessor, the Health Care Financing Administration, issued a proposed rule concerning the bond requirement in 1998, but it was never finalized.
Industry response ranged from dismay, especially given the onslaught of changes shaking the industry, from reimbursement cuts and oxygen cutbacks to competitive bidding and accreditation, to resignation. While some providers said the bond requirement is reasonable and worthwhile if it strengthens the industry’s reputation, others worry that it may be the final push that will convince many smaller providers to walk away from the business.
The bond is expected to cost suppliers $3,000 to $6,000 a year, which will add to the burden of increasing gasoline prices, vehicle insurance and utilities. Some providers expressed exasperation, saying that their expenses go up while reimbursements remain constant or decline.
The industry has until Oct. 1 to take a look at the proposed rule and submit comments. The complete text is available here: