Surety Bond Issue to Be Addressed at a Later Date

Washington

After almost three years, the Health Care Financing Administration finally has released its final rule regarding qualifying standards for home medical equipment suppliers. The rule, proposed in January 1998, is scheduled to go into effect Dec. 11.

"We believe that our standards will help bar fraudulent suppliers from participating in the Medicare program and provide an added level of protection to Medicare beneficiaries," HCFA stated in the rule. "Therefore, we expect to have an impact on an unknown number of persons and entities who will effectively be prevented from practicing their aberrant billing activities."

While most of the provisions in the final rule are essentially the same as in the original draft from 1998, HCFA implemented some changes based on comments from dealers and industry groups. One such change is HCFA's decision "not to incorporate the provisions related to surety bonds in this final rule." HCFA said it will deal with the surety bond issue and a proposed rule at a later, unspecified time.

Another important revision concerns liability insurance. HCFA's final rule states that suppliers must carry comprehensive liability insurance of at least $300,000 "that covers both the supplier's place of business [as well as] customers and employees of the supplier." In the initial proposed rule, HCFA made liability insurance a requirement but did not state an exact amount.

Some industry advocates also were intrigued by changes made concerning suppliers' facilities. In the final rule, HCFA added that "the supplier location must be accessible during reasonable business hours ... and must maintain a visible sign and posted hours of operation."

David Williams, director of government relations at Elyria, Ohio-based Invacare, said: "I think that this provision could be interesting to see how HCFA interprets [the above requirement], especially with some of the dot-coms and mail-order places. There are some people in this industry whose business location is in the trunk of their car. So that's a big change."

Although this is a final rule and HCFA is not asking for further comments on these standards, HCFA is soliciting comments on other home care areas, specifically home oxygen, specialized shoes for diabetics and some orthotics issues. To submit comments, mail an original and three copies to HCFA, Dept. of Health and Human Services, Attn.: 6004-FC, P.O. Box 8013, Baltimore, MD 21244-8013. Deadline for comments is Dec. 11.