Surety Insurers Oppose H.R. 3962

WASHINGTON BUREAU — Surety bond insurers are up in arms over a section of H.R. 3962, the House health bill, that would affect Medicare durable equipment providers.

The provision would waive a bond requirement for most pharmacies that provide durable equipment for Medicare beneficiaries.

“In the absence of bonding, who will be looking to assure that all providers that submit claims to Medicare are legitimate and that overpayments, fines and penalties assessed by [the Centers for Medicare and Medicaid Services] are paid?” asks Lynn Schubert, president of the Surety & Fidelity Association of America, Washington.

Today, the pharmacies are part of the biggest class of providers that has to obtain the surety bond, Schubert says.

The surety bond waiver provision is not in S. 1679, health bill approved by the Senate Health, Education, Labor and Pensions Committee in July, an SFAA representative says.

S. 1796, the bill approved by the Senate Finance Committee in October, would create a tiered pricing structure for the bonds, with the price based on a supplier’s volume, the SFAA representative says. The S. 1796 provision would cap the bond cost for large suppliers at $50,000.

Senate Majority Leader Harry Reid, D-Nev., has sent a Senate health bill draft based on a combination of S. 1679 and S. 1796 to the Congressional Budget Office for budget impact scoring.

“We are still waiting to hear back from the Congressional Budget Office and hope to hear from them soon,” a CBO representative said today.

“They are working as quickly as they can to get back to us,” the staffer said. “Depending on when we hear from them, we hope to be able to move to the legislation [on the Senate floor] as early as next week.”