WASHINGTON – Senate Finance Committee Chairman Max Baucus (D-Mont.), Ranking Member Orrin Hatch (R-Utah), Homeland Security and Governmental Affairs Committee Chairman Tom Carper (D-Del.) and Senator Tom Coburn (R-Okla.) today highlighted a new report from the Department of Health and Human Services (HHS) Inspector General showing nearly $70 million lost in Medicare overpayments to suppliers of durable medical equipment – most of which will go unrecovered. The report demonstrates the need for HHS to recover overpayments using surety bonds, which are issued by companies as guarantees that health care providers will pay the Centers for Medicare & Medicaid Services (CMS) any money they owe.
Since 2009, CMS has required suppliers of durable medical equipment to obtain at least $50,000 in surety bond coverage per location in order to recover debts owed to Medicare and protect against fraudulent suppliers. But the report showed that only $263,000 out of $50 million backed by surety bonds had been recovered, and CMS had inaccurate and incomplete bond information for many suppliers. It also found many overpayments to suppliers exceeded $50,000, the maximum amount CMS can collect on a surety bond. Because of the $50,000 limit per bond, as much as $42 million of that total will go uncollected. One supplier alone was overpaid by $5 million, but had carried bonds that only covered a fraction of that amount. Another $20 million in overpayments were made to suppliers who took out no surety bonds at all and therefore will not likely be recovered. Read More »