The surety-bond limit for providers of durable medical goods should be increased beyond $50,000, senior members of two Senate committees said in a joint statement in which they noted insufficient bonds mean the government will be unable to recover $42 million in Medicare overpayments since 2009.
The chairmen and ranking members of the Senate Finance Committee and the Homeland Security and Governmental Affairs Committee cited a March 21 report by the U.S. Department of Health & Human Services' Office of Inspector General, finding that only $263,000 out of $50 million backed by surety bonds had been recovered.
The Centers for Medicare & Medicaid Services had inaccurate and incomplete bond information for many suppliers, the senators said, and many overpayments exceeded the $50,000 that could be collected on the surety bond. One supplier received $5 million in overpayments.
The senators did not offer a specific plan. Finance Committee Chair Rep. Max Baucus (D-Mont.) called for the administration to "do all it can to plug the leaks, and that includes making surety bonds a more effective tool of recovering lost funds." Ranking member Orrin Hatch (R-Utah) noted "tools like surety bonds" can help eliminate waste.
The senators, along with chairman Tom Carper (D-Del.) and Tom Coburn (R-Okla.) of the Homeland Security and Governmental Affairs Committee, pointed out the Affordable Care Act allows CMS to increase the surety-bond requirement.
In its report, OIG recommended CMS improve oversight of information provided by durable medical goods suppliers, begin using the surety-bond requirement to recover overpayments, consider increasing the bond amounts for suppliers that receive large Medicare payments and change its guidelines to collect debts based on dates of service.
CMS agreed with the recommendations.
Some medical equipment suppliers warned they would be forced out of business at the time the surety bonds and other requirements took effect. Home-oxygen companies, for example, said patients would be left hanging as companies closed down. Small providers in particular complained of the costs involved in becoming accredited as Medicare suppliers.
Meanwhile, last fall CMS was praised by the OIG for improving its reporting of adverse actions taken against durable medical equipment suppliers in a report that otherwise criticized the agency for failing to adequately report disciplinary actions against providers to the national Healthcare Integrity and Protection Data Bank.