DME companies must post surety bonds, HHS says
As part of its continuing scrutiny of potential fraud in the durable medical equipment (DME) industry, the federal Department of Health and Human Services has published new regulations requiring that DME suppliers obtain surety bonds of at least $50,000.
The regulations follow on the heels of similar regulations targeting home health providers. "Surety bonds are needed to weed out unscrupulous providers," June Gibbs, HHS inspector general said. "These actions will help protect Medicare by ensuring that suppliers are legitimate business enterprises, not rip-off artists."
The regulations respond to a 1997 report commissioned by HHS, which concluded that it was too easy for prospective DME suppliers to enroll in Medicare. The report also found that a "significant number" of suppliers did not have physical business addresses or had no actual supply of equipment to provide. Medicare spent about $6 billion on DME in FY 1997.
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