A common misconception that many people have regarding Medicare are the use of surety bonds. To often they are associated with what happens in the financial industry. However, in 1997 Congress required Medicare suppliers to have a surety bond to prevent fraud and abuses which can take place. The entire incident began back in 1995 when a Medicare whole seller had billed 1,700 different Medicare suppliers for goods that were never received or less amounts of the items were received. In an effort to prevent this Congress required all Medicare wholes sellers and providers to have at least a $50,000.00 surety bond. This money would be dipped into in the event that another supplier or whole seller tried to cheat the program as opposed to trying to go after these individuals. Recently the Centers for Medicare & Medicaid Services (CMS), which is the regulatory agency that enforces Medicare fraud, announced that it had revoked the billing privileges of 1,100 Medicare whole sellers and equipment suppliers in Florida and California. This follows a 2007 report highlighting nearly $1 billion in potentially fraudulent payments or outright fraud discovered by the CMS.What these actions show along with the increase in the number of suspensions is that the government is getting serious on fraud related issues when it comes to Medicare. Clear evidence of this is with the requirement that all whole sellers and suppliers must take out a minimum $50 thousand surety bond and the suspension of 1,100 Medicare whole sellers as well as suppliers in Florida and California.

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