CMS Pub. 100-08, ch. 10, § 10.7.16

When making a claim against a surety bond in accordance with section 10.2.5(A)(2)(o)(ii) of this

chapter, the contractor shall use the applicable model letter below:

A. Letter for Overpayments – Supplier is Still Enrolled in Medicare

Date

Surety Name

Surety Address

RE: Supplier Legal Business Name

Supplier DBA Name (if any)

Supplier Address

Supplier National Provider Identifier (NPI)

Dear Surety:

(Supplier legal business name) is currently enrolled in the Medicare program as a supplier of

durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS). As a condition of

its Medicare enrollment, (Supplier) is required – under Federal regulations at 42 C.F.R.

§424.57(d) - to maintain a surety bond in an amount of no less than $50,000. In accordance with

this provision, (Supplier) has a $________ surety bond with your company.

Consistent with 42 C.F.R. §424.57(d)(5)(i)(A), the surety must pay CMS - upon receiving

written notice from CMS containing “sufficient evidence” as defined in the Program Integrity

Manual, CMS Pub. 100-08, §10.2.5(A)(3)(b) - the amount of any unpaid claim for which the

DMEPOS supplier is responsible, up to the full penal amount of the bond. An “unpaid claim” is

defined in 42 C.F.R. §424.57(a) as an overpayment made by the Medicare program to the

DMEPOS supplier for which the DMEPOS supplier is responsible.

CMS has determined that (Supplier) has incurred an overpayment in the amount of (insert dollar

amount) for (insert “a service” or “services”, as applicable) performed on (insert date(s) of

service). This determination was made based on specific information about the overpayment,

which is included in the attachments to this letter.

CMS has been unable to recover the full overpayment from (Supplier) using its existing

recoupment procedures. (Supplier) has repaid (insert “none” or “only $_____) of the

overpayment amount. Consistent with 42 C.F.R. §424.57(d)(5)(i)(A), therefore, CMS requests

that (Surety) make payment to CMS in the amount of (insert applicable amount) no later than 30

days from the date of this letter. Payment shall be made via check or money order and sent to

the following address:

Contractor Name

Address

City, State and Postal ZIP Code

The payee shall be (insert DME MAC), which is CMS’s Durable Medical Equipment Medicare

Administrative Contractor for (Supplier)’s location.

Failure to make the requested payment in a timely manner may result in referrals to the United

States Department of Justice for collection action, and/or the United States Department of the

Treasury for revocation of [surety name’s] authority to provide federal bonds.

Should you have any questions about this letter, please do not hesitate to contact _______ at

__________. (The contractor shall identify a specific individual who the surety can contact if

questions arise.)

Sincerely,

(Name and title)

cc: Supplier Name

B. Letter for Overpayments - Supplier is No Longer Enrolled in Medicare

Date

Surety Name

Surety Address

RE: Former Supplier Legal Business Name

Former Supplier DBA Name (if any)

Former Supplier Address

Former Supplier NPI

Dear Surety:

(Former Supplier legal business name) was enrolled in the Medicare program as a supplier of

durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) until (insert effective

date of termination/revocation). As a condition of its Medicare enrollment, (Former Supplier)

was required – under Federal regulations at 42 C.F.R. §424.57(d) - to maintain a surety bond in

an amount of no less than $50,000. In accordance with this provision, (Former Supplier)

obtained a $__________ surety bond with your company.

Consistent with 42 C.F.R. §424.57(d)(5)(i)(A), the surety must pay CMS – upon receiving

written notice from CMS containing sufficient evidence to establish the surety’s liability under

the bond – the amount of any unpaid claim for which the DMEPOS supplier is responsible, up to

the full penal amount of the bond. An “unpaid claim” is defined in 42 C.F.R. §424.57(a) as an

overpayment made by the Medicare program to the DMEPOS supplier for which the DMEPOS

supplier is responsible.

CMS has determined that (Supplier) incurred an overpayment in the amount of (insert dollar

amount) for (insert “a service” or “services”, as applicable) performed on (insert date(s) of

service). This determination was made based on specific information about the overpayment,

which is included in the attachments to this letter.

CMS has been unable to recover the full overpayment from (Former Supplier) using its existing

recoupment procedures. (Former Supplier) has repaid (insert “none” or “only $_____) of the

overpayment amount.

(Former Supplier’s) surety bond coverage with your company ended on (insert date). However,

consistent with 42 C.F.R. §424.57(d)(5)(iii), the surety is liable for unpaid claims that:

• CMS assessed against the supplier based on overpayments that took place during the

term of the bond or rider, and

• Were assessed by CMS during the 2 years following the date that the supplier failed

to submit a bond or required rider or the date that the supplier’s Medicare enrollment

was terminated, whichever is later.

The overpayment occurred on (insert date), which was within the period of (Former Supplier)’s

surety bond coverage with your company. Moreover, CMS has made its overpayment

determination within the 2-year period following the date of the termination of (Former

Supplier)’s Medicare enrollment. Consistent with 42 C.F.R. §424.57(d)(5)(i)(A), therefore,

CMS requests that (Surety) make payment to CMS in the amount of (insert applicable amount)

no later than 30 days from the date of this letter. Payment shall be made via check or money

order and sent to the following address:

Contractor Name

Address

City, State and Postal ZIP Code

The payee shall be (insert DME MAC), which is CMS’s Durable Medical Equipment Medicare

Administrative Contractor for (Supplier)’s location.

Failure to make the requested payment in a timely manner may result in referrals to the United

States Department of Justice for collection action, and/or the United States Department of the

Treasury for revocation of [surety name’s] authority to provide federal bonds.

Should you have any questions about this letter, please do not hesitate to contact _______ at

__________. (The contractor shall identify a specific individual who the surety can contact if

questions arise.)

Sincerely,

(Name and title)

cc: Supplier Name

C. Letter for Civil Monetary Penalties and Assessments – Supplier is Still Enrolled in

Medicare

Date

Surety Name

Surety Address

RE: Supplier Legal Business Name

Supplier DBA Name (if any)

Supplier Address

Supplier NPI

Dear Surety:

(Supplier legal business name) is currently enrolled in the Medicare program as a supplier of

durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS). As a condition of

its Medicare enrollment, (Supplier) is required – under Federal regulations at 42 C.F.R.

§424.57(d) - to maintain a surety bond in an amount of no less than $50,000. In accordance with

this provision, (Supplier) has a $_________ surety bond with your company.

Consistent with 42 C.F.R. §424.57(d)(5)(i)(A), the surety must pay CMS – upon receiving

written notice from CMS containing sufficient evidence to establish the surety’s liability under

the bond – the amount of any civil monetary penalty (CMP) and/or assessment for which the

DMEPOS supplier is responsible, up to the full penal amount of the bond. (Insert applicable

language…………..

A CMP is defined in §424.57(a) as a sum that CMS has the authority, as implemented by

42 C.F.R. §402.1(c) (or the Department of Health and Human Services Office of

Inspector General (OIG)) has the authority, under section 1128A of the Act or 42 C.F.R.

Part 1003) to impose on a supplier as a penalty.

OR

An assessment is defined as a sum certain that CMS or the Department of Health and

Human Services Office of Inspector General (OIG) may assess against a DMEPOS

supplier under Titles XI, XVIII or XXI of the Social Security Act.)

(CMS or OIG, as applicable) imposed a (CMP and/or assessment, as applicable) on (Supplier) on

(date) in the amount of ($ _____). The (CMP and/or assessment) was imposed because (insert

explanation, using information furnished by CMS or OIG).

Relevant documentation supporting our determination is attached to this letter. (Attach copy of

notice of CMP/assessment that was sent to supplier.)

(CMS or OIG, as applicable) has attempted to recover the amount of the (CMP or assessment)

from (Supplier) using its existing collection procedures. (Supplier), however, has repaid (insert

“none” or “only $_____) of this amount. Consistent with 42 C.F.R. §424.57(d)(5)(i)(A),

therefore, CMS requests that (Surety) make payment to CMS in the amount of (insert applicable

amount) no later than 30 days from the date of this letter. Payment shall be made via check or

money order and sent to the following address:

Contractor Name

Address

City, State and Postal ZIP Code

The payee shall be the Centers for Medicare and Medicaid Services.

Failure to make the requested payment in a timely manner may result in referrals to the United

States Department of Justice for collection action, and/or the United States Department of the

Treasury for revocation of [surety name’s] authority to provide federal bonds.

Should you have any questions about this letter, please do not hesitate to contact _______ at

__________. (The contractor shall identify a specific individual who the surety can contact if

questions arise.)

Sincerely,

(Name and title)

cc: Supplier Name

D. Letter for Civil Monetary Penalties and Assessments – Supplier is No Longer Enrolled

in Medicare

Date

Surety Name

Surety Address

RE: Former Supplier Legal Business Name

Former Supplier DBA Name (if any)

Former Supplier Address

Former Supplier NPI

Dear Surety:

(Former Supplier legal business name) was enrolled in Medicare as a supplier of durable medical

equipment, prosthetics, orthotics and supplies (DMEPOS) until (insert effective date of

termination/revocation). As a condition of its Medicare enrollment, (Former Supplier) was

required – under Federal regulations at 42 C.F.R. §424.57(d) - to maintain a surety bond in an

amount of no less than $50,000. In accordance with this provision, (Former Supplier) obtained a

$_________ surety bond with your company.

Consistent with 42 C.F.R. §424.57(d)(5)(i)(A), the surety must pay CMS – upon receiving

written notice from CMS containing sufficient evidence to establish the surety’s liability under

the bond – the amount of any civil monetary penalty (CMP) and/or assessment for which the

DMEPOS supplier is responsible, up to the full penal amount of the bond. (Insert applicable

language…………..

A CMP is defined in §424.57(a) as a sum that CMS has the authority, as implemented by

42 C.F.R. §402.1(c) (or the Department of Health and Human Services Office of

Inspector General (OIG) has the authority, under section 1128A of the Act or 42 C.F.R.

Part 1003)) to impose on a supplier as a penalty.

OR

An assessment is defined as a sum certain that CMS or the Department of Health and

Human Services Office of Inspector General (OIG) may assess against a DMEPOS

supplier under Titles XI, XVIII or XXI of the Social Security Act.)

(CMS or OIG, as applicable) imposed a (CMP and/or assessment, as applicable) on (Former

Supplier) on (date) in the amount of ($ _______). The (CMP and/or assessment) was imposed

because (insert explanation, using information furnished by CMS or OIG).

Relevant documentation supporting our determination is attached to this letter. (Attach copy of

notice of CMP/assessment that was sent to former supplier.)

(CMS or OIG, as applicable) has attempted to recover the amount of the (CMP or assessment)

from (Former Supplier) using its existing collection procedures. (Former Supplier), however,

has repaid (insert “none” or “only $_____) of this amount.

(Former Supplier)’s surety bond coverage with your company ended on (insert date). However,

consistent with 42 C.F.R. §424.57(d)(5)(iii), the surety is liable for CMPs and/or assessments

that:

• CMS or OIG imposed or asserted against the supplier during the term of the bond or

rider, and

• Were imposed or assessed by CMS during the 2 years following the date that the

supplier failed to submit a bond or required rider or the date that the supplier’s

Medicare enrollment was terminated, whichever is later.

The (CMP and/or assessment) was based on events that occurred (insert relevant date(s)), which

was within the period of (Former Supplier’s) surety bond coverage with your company.

Moreover, CMS imposed the (CMP and/or assessment) within the 2-year period following the

date of the termination of (Former Supplier)’s Medicare enrollment. Consistent with 42 C.F.R.

§424.57(d)(5)(i)(A), therefore, CMS requests that (Surety) make payment to CMS in the amount

of (insert applicable amount) no later than 30 days from the date of this letter. Payment shall be

made via check or money order and sent to the following address:

Contractor Name

Address

City, State and Postal ZIP Code

The payee shall be the Centers for Medicare & Medicaid Services.

Failure to make the requested payment in a timely manner may result in referrals to the United

States Department of Justice for collection action, and/or the United States Department of the

Treasury for revocation of [surety name’s] authority to provide federal bonds.

Should you have any questions about this letter, please do not hesitate to contact _______ at

__________. (The contractor shall identify a specific individual who the surety can contact if

questions arise.)

Sincerely,

(Name and title)

cc: Supplier Name

E. Surety Non-Payment Letter

Date

Surety Name

Surety Address

RE: Supplier Legal Business Name

Supplier DBA Name (if any)

Supplier Address

Supplier National Provider Identifier (NPI)

Dear Surety:

Consistent with 42 C.F.R. §424.57(d)(5)(i)(A), we sent you a letter dated (date of letter)

requesting that you make payment to CMS in the amount of (insert applicable amount) no later

than 45 days from the date of said letter, a copy of which is attached. (Attach a copy of the

demand letter.) As payment has not been received, this matter may be referred for further action

to the United States Department of Justice for collection and/or the United States Department of

the Treasury for revocation of [surety name’s] authority to provide federal bonds.

Should you have any questions about this letter, please do not hesitate to contact _______ at

__________. (The contractor shall identify a specific individual who the surety can contact if

questions arise.)

Sincerely,

(Name and title)

cc: Supplier Name