New Bill Proposes $500,000 Surety Bond Rule

In an effort to deter fraud and abuse, the Senate has proposed a bill that if enacted would impose a $500,000 surety bond requirement on DME/HME providers.

"It's really out of proportion, because your everyday provider doesn't pose that big a risk to the Medicare program," said industry attorney Asela Cuervo.

In recent years, Congress has passed a law requiring a $50,000 surety bond, but it was never implemented. The industry has argued that even a $50,000 surety bond rule would put some legitimate HME providers out of business, let alone $500,000.

To meet this latest requirement, a provider would have to come up with $10,000 to $20,000 to post a bond and then put up collateral to back it up, according to estimates.

In response to the overwhelming outcry from the industry, government officials have decided to reconsider the measure.