Friday, January 2, 2009

Surety Bond Applies One-Size-Fits-All Approach to Providers

The Centers for Medicare and Medicaid Services (CMS) issued its final rule Monday, December 30, implementing a requirement that mandates home medical equipment providers to furnish CMS with a $50,000 surety bond in order to participate in the Medicare program. This rule implements provisions included in the Balanced Budget Act of 1997.

In its analysis of the rule, CMS states that HME provider costs for securing a bond will be approximately $1,500 per year. The Agency also estimates that as many as 25,188 DMEPOS providers will exit Medicare due to the combined costs of the surety bond and accreditation requirements.

"We are concerned that overly burdensome requirements applying a one-size-fits-all approach will harm legitimate homecare providers," American Association for Homecare President Tyler J. Wilson, told the Associated Press in an article about the surety bond changes that was printed in Forbes and other newspapers across the nation.

The Association has been on record as supporting effective methods to eliminate fraud in the DMEPOS arena and has developed a 13-point plan targeting Medicare waste, fraud and abuse. The Association’s proposal targets efforts at the most vulnerable aspects of the program such as requiring mandatory site inspections for all new home medical equipment providers, requiring a six-month trial period for new homecare providers, and establishing real-time auditing to identify aberrant Medicare billing as it is occurring. The Association’s proposal can be viewed at

To view the Associated Press article visit:


Brian said...

No one has mentioned that there is no Insurance company willing to sell a surety bond to a DME Company. Our associations have called several Insurance Companies and no one will touch it. What does Medicare suggest in this case? Too Bad So Sad is my answer.

Anonymous said...

Brian – I believe you’re correct that a bond capable of meeting the CMS DME surety bond does not exist yet. The coverage form and premium rates have not yet been developed by the bond industry (the Surety and Fidelity Association of America and several bond companies). The bond industry is currently working with CMS on a solution, and Aon Affinity Insurance Services is working directly with the bond industry to ensure the bond is both accessible and affordable. If you have any questions on the DME surety bond or would like to register your firm, please contact Aon bond hotline at 800-554-2672 and mention code AAHC.

David Green said...

For DMEPOS Suppliers in Alabama, Mississippi,Tennessee and Georgia contact the agents at
Yellowhammer Insurance Agency for your DMEPOS CMS bond.

Three dates to remember:
May 2, 2009: CMS will notify high-risk companies. They will need to obtain additional bond amounts in increments of $50,000.

May 4, 2009: Deadline for new companies, including any changes of ownership after March 3, 2009.

Oct 2, 2009: Deadline for existing companies to post a bond with CMS.

This bond is required for all providers with a National Provider Identifier (NPI) number, and every NPI number will be required to have at least a $50,000 surety bond.

There are few exceptions and it is important to determine if you qualify for an exception, like multiple locations.

General Website:

Bond Website: or call toll free (800) 594-2357.