ATLANTA — Many HME providers successfully secured the $50K per location surety bond by the Oct. 2, 2009, deadline. However, some received ominous letters indicating they were "not compliant." After one to two weeks, that initial notification letter was usually followed up with an actual revocation notice, according to industry consultant Andrea Stark.
So far, said Stark, founder of MiraVista LLC, the most common problems have arisen due to bonds that have no NPI number and address. "The bond has to be specific for $50,000 per NPI and location," she said. "You must specifically notate the NPI and address for which that bond is effective. If you have multiple NPIs and addresses affected by one bond, then of course the increment of the bond is going to increase by $50,000 per location."
According to Warren Freeman, director of sales and marketing for VGM Insurance, Waterloo, Iowa, surety bond concerns have actually calmed down quite a bit in recent weeks. "Businesses are getting rejections from the [National Supplier Clearinghouse] on their bonds, but most of it has actually been just a miscommunication," said Freeman. "Either they've had the wrong business name, or they have put their 'doing business as' name."
Fortunately, when the misunderstanding is corrected, most providers are being covered retroactive to the date of the bond with no problems. "Every day we get calls where people are frantic saying they got a revocation letter from NSC and they are wondering what they need to do," added Freeman. "The NSC is sending out these notices saying that a company's billing privileges are going to be revoked, and they are giving those companies 30 days to fix it. They are sending [the notice] out as a warning, and [the company] just needs to get it fixed. Once they do, there are no more issues."
Many bonds came through with just the name and address of the company, Stark reported, noting that a number of smaller companies with a single location did not consider that it might be necessary to incorporate specifically their address and NPI number into the bond — but that is a requirement.
"Yet another issue we are seeing is that the bond has a place for the principal to sign to execute the bond," said Stark. "It is typically signed by the bond's attorney or an official within the bond company. The provider actually has to sign, and usually that is on the second page; the bonds typically are two pages long. The principal who signs must be the authorized official as designated in the CMS 855S application. It is also prudent to print the name of the individual who signed, because not all signatures are legible."
Making it clear that the authorized official has signed could be crucial if corrections ultimately have to be made. The best-case scenario is that the bond company will rewrite the bond and still maintain the same effective date. In this case, there will no gap in coverage, Stark said.
She added that the revocation notice gives suppliers instructions to send an email to NSC.revocation@palmettogba.com, and that address makes sense for providers who have a fully compliant bond if the only problem is that the NSC may have overlooked receipt. For those who can prove tracking with no deficiencies, Stark confirmed that everything should be fine.
However, she said, "When the bond has to be corrected, then that email to the NSC revocation address is not going to allow you to update the bond." In that case, Stark said, providers have to wait for the revocation letter, submit to the NSC as a corrective action plan (CAP) or a reconsideration, and attach the corrected bond to the letter.
"November [was] really when those letters started to go out," said Stark. "All of the bond companies are able to make these corrections, and from what I've seen they still maintain the original effective date … that would keep the company in compliance. Whatever changes need to be made can go through the CAP, and when the NSC processes the CAP, they will reinstate the supplier retroactive to the compliance date of the bond. So it should be without a gap, but the problem is there will be a revocation, and claims will be denied if not medically necessary until the CAP is completed."
Another consequence of a bond issue is that any HME provider trying to submit a bid for competitive bidding in the Round 1 rebid could get caught up in the mess. "If they are subjected to a surety bond compliance issue and their number is revoked or suspended, they will be unable to [access the online dBids bidding system]," confirmed Stark. "Basically, they get an error message saying that their provider number is not found in the database. Those providers are under a specific strain and deadline with significant potential consequences."
The deadline for submitting Round 1 bids is Dec. 21.
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