HCFA standard puts DME surety bonds on hold
HCFA standard puts DME surety bonds on hold
Health care systems that provide durable medical equipment (DME) will not have to secure a surety bond until sometime next year at the earliest. The Health Care Financing Administration’s (HCFA) final rule establishing additional standards for entities to qualify as a Medicare supplier, published in the Federal Register Oct. 11, postpones the surety bond requirement indefinitely.
Corrine Parver, a partner with Dickstein Shapiro in Washington, DC, says that while the final standards, which take effect Dec. 11, do not contain many new requirements, they highlight many potential trouble spots. She warns that anybody involved with DME should read the new standards carefully. "This industry is still under intense scrutiny," warns Parver, who says that may be why HCFA was compelled to emphasize compliance in the new supplier standards. "It still strikes me that their approach to the whole process is coming from a fraud prevention mode," she says.
For example, the final standards say that suppliers can’t bill for inhalation therapy drugs used with nebulizers, but that rule has been around for years. Likewise, suppliers are largely prohibited from calling Medicare beneficiaries about furnishing DME. But that requirement has also been around for years.
HCFA’s new standards and revisions to existing standards cover compliance with Medicare statutory provisions and applicable regulations as well as applicable federal and state licensure and regulatory requirements.
The standards also cover misrepresentation of facts, scope of exclusions, rental or purchase options, warranties, delivery, reassignment of supplier numbers, liability insurance, and a host of other areas.
According to Parver, HCFA made subtle changes to the proposed rule. For example, the agency agreed with suppliers that it is not necessary to provide a complete list of warranties and no longer specifies when the warranty information must be given.
Likewise, HCFA modified the proposed rule concerning record keeping. Locations serving only as warehouses are not subject to the supplier standards as long as the central site is an enrolled supplier. In the case of multi-site suppliers, records can now be maintained at a central location. "That is very helpful," says Parver.
Eric Sokol, deputy director of government affairs at the National Association for Home Care (NAHC) in Washington, DC, predicts that only after HCFA releases a revised surety bond requirement for home health care agencies (HHA) will it revisit the requirement for DME suppliers. "Once they put out a rule for HHAs, they will probably turn their attention to home medical equipment," he says.
However, Sokol says it is a safe bet that HCFA will not revisit the surety bond requirement for HHAs, which it postponed under intense congressional pressure in 1998, until the transition to the home health prospective payment system is completed. "HCFA has a lot to chew on right now," he asserts. That means a proposed rule for HHA surety bonds will not likely surface until sometime next year, he predicts.
Sokol reports that NAHC has several remaining concerns regarding the shape of the final surety bond requirement for HHAs. For one thing, NAHC hopes to see a fraud bond as opposed to a guarantee bond, which is harder to comply with.
The association also argues that overpayments made during the interim payment system should not be counted against the bond because HCFA failed to communicate payment rates in a timely fashion.
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