Medicare Surety Bond Issue — Overpayments

I was recently notified by VGM Insurance that they have begun to see Medicare Surety Bond Claims come into their office at a steady pace.  Currently they are receiving about 4 new bond claims per business day.  While this may seem like a relatively small number the growing concern is that these bond claims are brand new, coming in for various reasons, and the frequency of these claims seem to be increasing.  Our industry was originally led to believe that the Medicare Surety Bond was to be used for fraud and to help maintain the integrity of the Medicare Trust Fund.  VGM Insurance is now seeing claims come in for any overpayment situation; basically it appears that the DME MAC’s are issuing claims on bonds for any overpayment past 100 days.  As you can imagine there are a variety of reasons why overpayments could go past 100 days.  One such scenario involves a company that does 99% of their billing in one DME MAC region but had an overpayment in another region.  Since they don’t regularly bill in the second region there were no payments pending to recoup the overpayment, thus the DME MAC sent that amount to the surety company as an overpayment. 

The claims range from $16 up to the full $50,000 face value of the bonds.  While the smaller dollar amount claims seem insignificant the real concern is that even these smaller amounts could jeopardize a providers billing privileges and if this process continues it will most definitely impact the underwriting, rates and ability of providers to obtain surety bonds in the future.

In a recent email VGM Insurance shared 3 important tips that I would like to share with you:

  • Make certain that your Medicare billing and overpayment staff (or company) understand that all overpayments must be settled before they hit 100 days. The DME MACs may submit a claim against your surety bond for any overpayment amount, so don’t let a $16 claim jeopardize the future of your business.
  • A bond is not insurance. A bond is more like an advance from a bank or credit card. If the bond company pays a claim for you, they will treat that claim like a debt and use all available tools to collect that debt plus interest. Also, when a claim is paid by the surety, renewal of your surety bond may be jeopardized. Most surety bond companies will not write a bond for a provider who had a claim on a previous bond.
  • If you are notified of a claim please contact VGM Insurance’s Medicare Bond Hotline immediately.

For questions please contact VGM’s Bond Hotline at 866-497-0472.

This entry was posted in Orthotics and Prosthetics, Prosthetist, Regulatory and tagged , , , , . Bookmark the permalink.

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