CMS issued a final rule requiring DME companies to post $50,000 surety bonds to limit Medicare exposure to fraud. CMS said companies previously cited may be required to post higher bonds. Some physicians, physical and occupational therapists, government-owned suppliers and state-licensed orthotic and prosthetic personnel are exempt from the bond regulation.
In addition, the agency also excluded more than 1,139 DME suppliers in California and Florida from billing Medicare and Medicaid as part of a high-risk suppliers demonstration project. Those suppliers accounted for more than $265 million in Medicare payments from 2005-2007, but either failed to re-enroll in the program or to meet program standards.
In October, CMS suspended Medicare payments to 10 home health agencies in fraud-plagued Miami-Dade County area of South Florida. The agency is also imposing pre- and post-payment review of claims submitted by referring physicians and is validating claims from doctors who order high numbers of items or services.
Congress mandated the surety bond regulation for DME, prosthetics and orthotics suppliers in the Balanced Budget Act of 1997. Those providers are required to post the bonds by Oct. 2, 2009. Newly enrolled companies must do so by May 4, 2009. In fiscal 2007, CMS estimated it improperly paid more than $1 billion in Medicare payments to medical equipment suppliers. CMS Acting Administrator Kerry Weems said in a news release that the new steps will provide additional oversight of medical equipment suppliers.
In October and November alone the U.S. Attorney in Miami secured the convictions of four participants in DME fraud schemes that billed Medicare of more than $60 million, according to the U.S. Justice Department.
The Medicare Fraud Strike Force in South Florida and Los Angeles earned 50 convictions and nearly $69 million in investigative receivables between April and Sept. 2008 from those states alone, according to the HHS’ inspector general.
To learn more, go to the CMS Web site for DME suppliers.
