Top Reasons for Procuring a Medicare & Medicaid Bond
If there is one sector that has the maximum risk due to COVID-19, it is the healthcare. There is a risk in just about everything and for everyone who works in this sector. That includes people who are at the forefront and deliver critical medical services but also vendors and suppliers of prosthetics, orthotics, and other supplies. So, procurement of assurance documents like Medicare & Medicaid Bonds becomes all the more important for everyone.
What Are These Bonds
A Medicare & Medicaid Bond is a type of security bond that medical equipment suppliers have to furnish before receiving supply contracts. These bonds:
• Ensure that the Medicare enrollment process is verified and the equipment supplier is legitimate
• Minimize the potential risk of any kind of fraud
• Bind the legal supplier to deliver the right products to the beneficiaries
• Provide assured compensation for any inappropriate billing practice
• Ensure that the supplier understands the risk and does his work diligently
How Do These Bonds Work?
In an event when a supplier delivers a faulty product or overcharges for a product, either intentionally or by mistake, the other party can file for compensation. If the bond was issued, it will safeguard the interests of the other party and compensate them for their losses. The surety company will then recover these losses from the supplier.
Final Cost of These Bonds
The final value of one such bond can be based upon the supplier’s credit score, his performance record, and the applicable state laws. The final value is a percentage of the overall bond value. To minimize any risk, these bonds also need to be renewed every year.
Most commonly, it is the hospitals, dentists, and pharmacists who require these bonds from their suppliers. Others may need them too, but since these professionals constantly need to keep their inventory moving, the need for a surety bond becomes critical to safeguard their financial interests.