A Senate bill introduced last week would impose a $500,000 surety bond requirement on providers of durable medical equipment (DME) under Medicare and would put thousands of small homecare companies out of business, says the American Association for Homecare.
A law passed in 1997 requires a $50,000 surety bond for DME providers as a deterrent to fraud and abuse. However, the federal government has never actually implemented the surety bond requirement for the DME sector. The Centers for Medicare and Medicaid Services has proposed that the amount increase to $65,000.
The bill introduced last week, S. 2603, called the "Medicare Fraud Prevention Act of 2008," would increase the $50,000 surety bond requirement by a factor of ten. The bill would also increase civil and criminal fines for Medicare fraud and abuse. The bill is 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.).
"The impact of a half-million dollar surety bond requirement would be devastating on law-abiding small providers,"