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Everything you wanted to know about a DMEPOS-Medicare Surety Bond

Getting this surety bond is easy! Let us help you get bonded.

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How do I obtain a DMEPOS-Medicare Surety Bond?

Our company provides fast, professional surety bond services for all types of surety bonds. The application process is amazingly simple. We would first email you an application. Once you have returned the application to us, we will begin processing your bond. Usually, we can complete the process in one day. Feel free to contact us by email or phone.

How much is a DMEPOS Bond?

The required bond amount or liability coverage is $50,000. An elevated bond amount may be required by the CMS in some cases.

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What is my cost to purchase a DMEPOS-Medicare Surety Bond?

The cost of this bond is based on your credit score. If your credit is excellent, you will usually pay 1% of the bond amount. As your credit score declines, your cost increases.

What is DMEPOS?

A DMEPOS surety bond is also known as a Medicare surety bond. The acronym stands for “durable medical equipment, prosthetics, orthotics and supplies”. These are types of equipment that patients need at home due to certain medical conditions.

 

Medicare covers Durable Medical Equipment (DME) that has the following factors:

  • Is durable – can withstand repeated use
  • Serves a medical purpose
  • Is appropriate for use in the home and can also be used outside of the patient’s home
  • Likely to last for three or more years

Some examples of such types of equipment are as follows:

  • Home Blood Glucose Monitor
  • Therapeutic Shoes for Persons with Diabetes
  • Nebulizers
  • Power Mobility Device
  • Home Oxygen Therapy
  • Positive Airway Pressure Devices
  • External Infusion Pumps
  • Ventilators
  • Respiratory Assist Devices
  • Immunosuppressive Drugs
  • Enteral Nutritional Therapy
  • Parenteral Nutritional Therapy
  • Lower Limb Prosthesis

What is a DMEPOS (Medicare) Bond?

It is a federal surety bond required of DMEPOS suppliers. A bond must be procured before the supplier is allowed to enroll for and maintain billing privileges.

 

There are three (3) parties to this bond:

  • Principal – DMEPOS supplier (you)
  • Obligee – Centers for Medicare and Medicaid Services (CMS) Contractor
  • Surety – Surety Bond Authority (us)

The Centers for Medicare and Medicaid Services (CMS) requires this type of surety bond to ensure the fulfillment of obligations of the DMEPOS supplier to the CMS in accordance with mutual terms.

 

Through this surety bond, the Surety (Surety Bond Authority) will provide the financial guarantee to the CMS along with the DMEPOS supplier.

 

The term of a DMEPOS bond is continuous.

Who needs to submit a DMEPOS Bond?

DMEPOS suppliers are required to submit this type of surety bond.

 

As defined in Section 424.57 of 42 CFR, a DMEPOS supplier is “an entity or individual, including a physician or Part A provider, that sells or rents Part B covered DMEPOS items to Medicare beneficiaries and that meets the DMEPOS supplier standards.”

 

A Part A provider is a hospital, skilled nursing facility, home health agency, hospice or comprehensive outpatient rehabilitation facility, or a related organization.

 

Part B covered DMEPOS items are those that have been prescribed by the patient’s Primary Care Provider (PCP).

 

Below are the different types of DMEPOS suppliers who are required to submit a DMEPOS Medicare Bond:

  • A DMEPOS supplier enrolling in the Medicare program for the first time
  • A DMEPOS supplier making a change in ownership
  • A DMEPOS supplier responding to a revalidation or reenrollment request
  • A supplier who is applying to become an enrolled DMEPOS supplier through a purchase or transfer of assets or ownership interest
  • A DMEPOS supplier enrolling a new practice location
  • Enrolled DMEPOS suppliers. Each Medicare-enrolled DMEPOS supplier must obtain a surety bond for each National Provider Identifier (NPI), and the bond must be submitted to the National Supplier Clearinghouse (NSC).

Why is a DMEPOS Bond required?

Since there are large numbers of DMEPOS suppliers who are filing claims with Medicare, having a surety bond in place minimizes the risks of DMEPOS suppliers defrauding or abusing the program.

 

Apart from that, the following are the benefits of having a surety bond according to CMS:

  • Enhance the Medicare enrollment process to help ensure that only legitimate DME suppliers are enrolled or are allowed to remain enrolled in the Medicare program
  • Ensure that the Medicare program recovers erroneous payments that result from fraudulent or abusive billing practices by allowing CMS or its designated contractor to seek payments from a Surety up to the penal sum of the bond
  • Help ensure that Medicare beneficiaries receive products and services that are considered reasonable and necessary from legitimate DME suppliers.

A surety bond is a financial security measure set in place along with performing a thorough screening process of the enrollees.

 

DMEPOS suppliers are required to strictly follow the laws that govern them as well as the DMEPOS Quality Standards among other things. If the bonded DMEPOS supplier violates any of those, the CMS can file a claim against the bond.

How does a DMEPOS-Medicare Bond work?

A DMEPOS Bond assures the Obligee of two things:

  • The DMEPOS supplier will fulfill his to her obligations
  • The Obligee will be compensated if the DMEPOS supplier fails to do so

By having a surety bond in place, the Obligee is transferring the risk to the Surety in case of the Principal’s default.

 

When a bond is obtained by the Principal, the Surety will partner with the Principal to ensure that those conditions will be fulfilled. The conditions of the bond are based on the laws that govern DMEPOS suppliers as well as the CMS’s rules and regulations. The Surety will act as the Principal’s financial guarantor to the Obligee.

 

If the Principal violates the conditions of the bond, the CMS will send a written notice to the Surety. The notice must contain sufficient evidence regarding the Principal’s violation.

 

The Surety will conduct a separate investigation of the claim. If the claim is valid, the Surety must pay the Obligee the following within 30 days of receiving the written notice:

  1. The amount of any unpaid claim, plus accrued interest, for which the DMEPOS supplier is responsible.
  2. The amount of any unpaid claims, CMPs, or assessments imposed by CMS or OIG on the DMEPOS supplier, plus accrued interest.

Under the conditions of the indemnity agreement, the Principal must reimburse the Surety once the payment has been made.

How to get your Bond?

  1. You must first APPLY FOR THIS BOND HERE!
  2. Once you email your application back to us, we do a simple credit check. If your credit is good, you will likely get our best rate of 1% (of the bond amount).
  3. Your surety bond will be issued and sent to you!

Can a DMEPOS Bond be cancelled?

Yes. If the Principal is planning to cancel the bond, he or she must provide a written notice to the CMS contractor 30 days before the effective date of cancellation.

 

Once a surety bond is cancelled (or if there’s a lapse in bond coverage), the DMEPOS supplier’s Medicare billing privileges will be revoked unless a new surety bond with the required bond amount is submitted.

Who are exempted to file a DMEPOS Bond?

  1. Government-operated DMEPOS suppliers who have provided CMS with a comparable surety bond under State law.
  2. State-licensed orthotic and prosthetic personnel in private practice making custom made orthotics and prosthetics that meets the following criteria:
    • The business is solely-owned and operated by the orthotic and prosthetic personnel
    • The business is only billing for orthotic, prosthetics, and supplies
  3. Physicians and non-physician practitioners as defined in section 1842(b)(18) of the Act if the items are furnished only to the physician or non-physician practitioner’s own patients.
  4. Physical and occupational therapists in private practice that meet the following criteria:
    • The business is solely-owned and operated by the physical or occupational therapist
    • The items are furnished only to the physical or occupational therapist’s own patients as part of his or her professional service
    • The business is only billing for orthotics, prosthetics, and supplies