CMS Admits New Surety Bond and Accreditation Requirement for Home Medical Equipment Suppliers Creating Patient Access Issues

Medicare Beneficiaries in Eight Montana Counties May Be Forced to Pay Full Costs for Supplies if They Have No Access to a Medicare Approved Supplier

WASHINGTON, Nov. 3 /PRNewswire-USNewswire/ -- In an email sent to Montana home equipment suppliers on October 30th, a Center for Medicare and Medicaid Services (CMS) official admitted there are "areas within Montana, a Medicare beneficiary may experience supplier access issues in obtaining certain" durable medical equipment and supplies. CMS official Lucretia James further notes patient access problems are due to a shortage of suppliers meeting the agency's new surety bond and accreditation requirements. She added, "some have chosen not to stay enrolled."

The email states Medicare patients may have experienced problems accessing oxygen, enteral nutrition (tube feeding), parenteral (intravenous nutrition), and power wheelchairs in eight Montana counties, Daniels, Sheridan, Roosevelt, Phillips, Musselshell, Fergus, Stillwater, and Carbon. In addition to this burgeoning access problem, Medicare patients will be penalized financially if they use a supplier they've being going to for years, which doesn't meet the new requirements, but may be the only supplier in their area. James warns, "If a beneficiary continues to get supplies from a supplier who has not met these requirements, Medicare won't pay and the beneficiary may have to pay the full cost for the supplies."

"While CMS claims these requirements were aimed at preventing fraud and increasing patient quality standards, it's clear the $50,000 surety bond mandate per store combined with up to a $25,000 accreditation cost is a financial burden too great for many small independent suppliers to shoulder. These well-intended, but misguided policies are clearly reducing the number of qualified suppliers to serve patients, thereby restricting patient access to services and equipment in Montana and who knows how many other states," said Wayne Stanfield, president, National Association of Medical Equipment Suppliers (NAIMES).

"Durable medical equipment (DME) is a small player in Medicare, comprising less than 1.7% of CMS' estimated $460 billion Medicare costs each year. If home medical equipment was such a wildly profitable industry, suppliers could afford to meet these costly albeit misguided requirements," noted Bob Sherman, outgoing President of the Big Sky Association of Medical Equipment Suppliers representing Montana and Idaho suppliers.

Mandated by the 1997 Balanced Budget Act, the surety bond requirement, which became effective October 2, 2009 requires durable medical equipment suppliers to maintain a surety bond of $50,000. If a supplier has multiple locations, he must have a surety bond for each store. CMS alleges this new rule was designed to combat fraudulent Medicare payments to phony supplier companies.

The new accreditation requirement, which was part of the 2003 Medicare Modernization Act, requires home medical equipment suppliers to become accredited to meet the Medicare's quality and business standards. Accreditation is granted by independent organizations and initially costs suppliers about $25,000 and thereafter thousands of dollars in renewal costs every three years. Instead of helping Medicare beneficiaries continue to get high-quality products and services and prevent fraud, as CMS alleged, the accreditation/surety bond requirement is causing interruption in patient care.

"Attacking the home medical equipment industry through onerous policies and blaming suppliers for the fraud and abuse in the system only harms patients and makes CMS look like it's not doing its job. More than 55,000 independent home medical equipment suppliers in this country make up over 95% of the industry's suppliers. The DME industry is already highly regulated by FDA, DOT, and State Pharmacy Boards," added Stanfield. "We abhor any fraud and abuse, however these two programs and the pending competitive bidding program will do little to stop it. CMS must act to stop fraud and abuse by preventing criminal elements from entering the DME industry, not by harming patients with programs which limit access to care."

It is quite probable more small independent suppliers won't be able to afford this double whammy of costly new requirements and be driven out of business. This will leave patients with limited or no access to life sustaining home medical equipment and supplies, resulting in increased emergency room visits and soaring Medicare costs. NAIMES urges members of Congress to closely examine this harmful patient access issue erupting because of the new accreditation/surety bond requirement and support HR3790, sponsored by Congressman Kendrick Meek (D-FL), to repeal the competitive bidding program, which would further limit patient access to services and suppliers.

About NAIMES
NAIMES is a national association representing independent durable medical equipment suppliers and a grassroots advocate for the DME industry. Leveraging its grassroots network of small independent suppliers, the association has a committed, aggressive, proactive approach to changing political minds, one member of Congress at a Time! NAIMES was founded on the belief that influencing the political process begins with harnessing local relationships at home to create a powerful national organization driven by the strength of its members.