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As leaders in Medicare Surety Bonds, VGM Insurance is focusing on some surety bond basics in this month’s newsletter series. Here are more helpful questions and answers.Definition of fraud   Why Do You Need Medicare Surety Bonds? You know that if you are a provider of home medical equipment or O&P services billing Medicare, surety bonds are a must. But why? Why do you need these surety bonds (besides the fact that it’s a law)? Like so many of our laws and mandates, the need for surety bonds comes out of dishonest people and dishonest business practices, namely fraudulent billing and overpayment.   Medicare Surety Bonds Fight Fraud If a provider is caught being dishonest (or is just a really bad record keeper and Medicare biller) Medicare will go after that provider and try to collect the overpayment. If that provider refuses to make the overpayments with Medicare, Medicare will then try to collect that money from the bond issuer. The idea is that if the provider has spent the money to get the bond, they are less inclined to be fraudulent. Like any law, there will always be people who try to break it for their own profit. While there is not a 100% guarantee these bonds will end Medicare fraud, it will help. If a business gets a reputation as a bad risk, the odds of them finding good bond rates (if any) are low.   The Exceptions to the Rule While there are a few exceptions, most providers will need to have the bond. If you no longer bill Medicare and only offer cash sales on your items, you are not required to have these surety bonds. While this practice has become more common after Medicare’s Competitive Bidding, most providers are still billing Medicare for at least a portion of their business.   Another exception to the surety bond rule includes government-operated DMEPOS (Durable Medical Equipment, Prosthetics, Orthotics, and Supplies) suppliers, so long as  that supplier has provided CME with another comparable surety bond under State law. State-licensed orthotic and prosthetic personnel in private practice, making custom-made orthotics and prosthetics, are also exempted from the surety bond requirement if the business is solely-owned and operated by the orthotic and prosthetic personnel, and the business is only billing for orthotics, prosthetics and supplies.   The surety bond and insurance professionals at VGM Insurance are here for you and we are just a click or a call away at 866-497-0472.

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