Corporate Compliance

CMS requires bonds, revokes billing privileges for DMEPOS suppliers

Healthcare Auditing Weekly, January 6, 2009

CMS continues to step up its efforts to combat Medicare fraud by suppliers of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS), according to a CMS press release.
Certain DMEPOS suppliers are required to post a $50,000 surety bond to limit Medicare’s risk from fraudulent equipment suppliers. Existing suppliers must comply with this requirement by Oct. 2, while newly enrolling suppliers must meet this requirement by May 4. Supplier who have had certain adverse legal actions imposed against them in the past may need to post higher bonds.
In addition, CMS revoked the billing privileges for more than 1,139 DMEPOS suppliers in South Florida and southern California as part of the DMEPOS High-Risk Suppliers Demonstration that began in October 2007. CME also suspended payments to home health agencies in the Miami-Dade, FL, area.
In addition to suspending payment, CMS is:
  • Implementing extensive pre- and post-payment review of claims submitted by ordering/referring physicians
  • Validating claims submitted by physicians who order a high number of certain items or services by sending follow-up letters to these physicians
  • Verifying the relationship between physicians who order a large number of home health services and the beneficiaries for whom they ordered those services
  • Identifying and visiting high risk beneficiaries to ensure they are appropriately receiving the services for which Medicare is being billed


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