CMS's Use of Surety Bonds To Protect Medicare Part B From Overpayments to Durable Medical Equipment Suppliers

To limit the financial risk that fraudulent suppliers of durable medical equipment (DME) pose to Medicare, CMS implemented a surety bond requirement in 2009 that held promise as a tool to: (1) deter fraud and (2) recover overpayments. For over a decade, OIG has raised concerns about fraudulent practices among DME suppliers and has highlighted billions of dollars in potentially improper Medicare payments made to suppliers. In 2013, OIG reported that CMS underutilized surety bonds as a tool to protect Medicare from overpayments to DME suppliers. CMS recovered only $263,000 from surety bonds of $50 million in overpayments identified for collection between October 2009 and April 2011. This evaluation will update and expand upon this work. We plan to determine: (1) the total amount of outstanding DME overpayments that became eligible for surety bond collection in CY 2023, (2) the total amount of outstanding DME overpayments that have been collected and left uncollected from surety bonds, (3) potential obstacles DME Medicare Administrative Contractors and CMS face in collecting outstanding DME overpayments from surety bonds, and (4) potential changes that could make surety bonds a more effective tool to deter fraud and recover DME overpayments.

Announced or Revised	Agency	Title	Component	Report Number(s)	Expected Issue Date (FY)
February 2025	CMS	CMS's Use of Surety Bonds To Protect Medicare Part B From Overpayments to Durable Medical Equipment Suppliers	Office of Evaluation and Inspections	OEI-03-25-00080	2026