Medicaid bonds are an absolute necessity for any businesses who submit bills to Medicare. This is a type of medical license bond which ensures that professionals are adhering to the rules as prescribed by the Centers for Medicaid and Medicare Services (CMS). All personal care agencies and those providing durable medical equipment, prosthetics, orthotics and supplies (DMEPOS), may require a bond. Whether or not your business actually requires a DMEPOS bond will depend on the laws in your state, so be sure to do your research and follow the guidelines in the area where your business operates. These bonds are required for as long as your business carries out the prescribed functions and assists in regulating the actions of companies submitting bills to Medicare, and helps provide some peace of mind to their clients. There are some exceptions to this rule, but generally every medical service provider with a National Provider Identifier Number (NPI) will need a minimum of a $50,000 Medicaid bond.
In 2009 CMS brought forth new regulations requiring the existence of these bonds to protect the public and help control the existence of fraudulent claims made to Medicare. Some exceptions to these rules include DMEPOS which are government operated, some physicians and occupational therapists, as well as state licensed orthotic personnel who work in private practice and bill to Medicare only for prosthetics, orthotics and supplies.
An application for a Medicaid bond can be obtained by visiting the website of the United States Department of Treasury’s listing of certified bond companies. The estimated cost per bond is approximately 3% of the actual value of the bond. While some businesses will require a minimum bond in the amount of $50,000 be advised that depending on the type of services you provide you could be required to hold a higher valued bond. Additionally, if you are a service provider with multiple locations, note that a Medicaid bond is required for each location which is or will be submitting bills to Medicare.
Each Medicaid bond must include certain aspects such as:
- within 30 days of receiving notice from the CMS, pay any unpaid claims or penalties;
- a statement claiming liability for unpaid claims which occur during the period of the bond’s existence;
- a statement that actions may be brought forth by the CMS;
- indicate the DMEPOS as supplier, CMS as obligee and surety as surety
To obtain a bond, suppliers can start by contacting their insurance company or agent, preferably one that works in surety bonds. The insurance agent will request information such as corporate financial statements, personal statements, tax returns, agreement of indemnity, application for a National Provider Identifier number, surety application, as well as any other documents which they may deem as being of assistance during the application process. The application for the Medicaid bond will ask the business owner relevant information required in assessing the value required for the surety, such as: information on the ownership of the business and its name and location; business’ nature including the equipment it provides to its clients. Also of importance are the annual billings the business already makes to Medicare and the business’ accreditation documents.
There are also a myriad of insurance companies and brokers available on the internet which businesses can choose to apply to online for these bonds. This may be convenient if your current insurance broker doesn’t deal with bonds or if you’d like to investigate various price options.
For consumers looking to receive Medicare benefits, contact the local Medicare office in the state you reside in and inquire about the next steps to take to receive benefits.