DMEPOS (durable medical equipment, prosthetics, orthotics, and supplies) bond is a federal surety bond required for DMEPOS Suppliers by the Center for Medicare and Medicaid Services (CMS). DMEPOS are different types of equipment patients need at home due to certain medical conditions. Examples include at-home ventilators and home oxygen therapy, to name a few. Most DMEPOS supplier organizations must obtain a DMEPOS bond before applying for CMS accreditation and Medicare billing enrollment.  The DMPEOS bond protects customers from unethical practices, mainly to curb medical billing fraud by physicians or medical practitioners. 

Sample Payment and Performance Bond Form
Example DMEPOS Bond Form

Required By: Center for Medicare and Medicaid Services

Bond Amount: $50,000

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How much does a DMEPOS Bond cost?

The cost of your bond depends on mainly two factors:

  • The bond amount
  • Applicant credit score

DMEPOS suppliers (except sole proprietors) must post a minimum of $50,000 surety bond for each National Provider Identifier (NPI) practice location before submitting their accreditation to CMS for authorization to bill Medicare. If you have more than one NPI practice location, you would need multiple DMEPOS supplier bonds. A higher bond limit is required if the applicant has previously violated Medicare rules.

The applicant's credit score will affect the premium percentage of the total bond amount. This premium percentage ranges from 0.5% to 2% of the bond amount. If you need a $50,000 bond, you could pay a premium ranging from $250 to $1,000, depending on your credit score.

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‍Who needs a DMEPOS bond?

To obtain accreditation from the CMS, all DMEPOS suppliers must purchase a DMEPOS bond.

A DMEPOS supplier, as outlined in section 424.57 of 42 CFR (Code of Federal Regulations), includes entities or individuals, including physicians or Part A providers. These suppliers engage in the sale or rental of DMEPOS items covered under Part B to Medicare beneficiaries, and they must adhere to established DMEPOS supplier standards.

A Part A provider can be identified as a hospital, skilled nursing facility, home health agency, comprehensive outpatient rehabilitation facility, or an affiliated organization. Part B covered DMEPOS items refer to medical equipment and supplies prescribed by a patient's Primary Care Provider (PCP).

For those uncertain about whether they require a DMEPOS bond, comprehensive information can be accessed on the website.  

‍Why do I need a DMEPOS bond?

A DMEPOS bond is required for DMEPOS suppliers to get registered with the CMS but it also serves some other purposes. The DMEPOS bond helps reduce the prevalence of Medicare billing fraud among suppliers of DMEPOS equipment. It also guarantees that DMEPOS suppliers will act according to the DMEPOS fee schedule, supplier standards, and other healthcare laws. The bond protects the public from these unethical practices, and since healthcare is such an essential part of someone’s life, it also establishes trust with your customers.  

How does a DMEPOS bond work?

Each DMEPOS bond issued is a legal contract binding three parties together.

  • The principal is the DMEPOS supplier, who purchases the bond.
  • The obligee is the government agency that requires the bond, in this case, CMS
  • The surety is the insurance company that issues the bond.

If a DMEPOS supplier conducts fraudulent activities (i.e., mishandling funds or customer information), the obligee can seek reimbursement by filing a claim against the agency’s bond. If a claim is valid, the surety will pay for the claim up to the bond amount. Then, the surety will require reimbursement from the DMEPOS supplier, the bond's principal.

How do I make changes to a DMEPOS bond?

DMEPOS suppliers need to keep their accreditation with the CMS up to date at all times because it is such a highly regulated industry.  As part of that, keep your DMEPOS bond up to date with your business, too.  If there are any changes to your business, such as your name or address change, then you can contact your surety company, and they’ll be able to write a rider form to update your bond.  A bond rider form is a way to update your bond without the need to cancel and purchase a new one.  Most changes to your bond will not impact the rating but if there are any rate-bearing changes, there may be an additional premium.  

How do I enroll as a DMEPOS supplier?

The steps to enroll as a DMEPOS supplier are really straightforward. However, you should follow them closely to ensure a smooth enrollment process.  

  1. Get your DMEPOS accreditation from a CMS-approved organization.  They will verify your business meets all the quality standards set by the CMS. Note that unannounced site visits is to be expected.
  2. Apply for a National Provider Identification Number (NPI) from the National Plan & Provider Enumeration System (NPPES). It’s important to note that you’ll need an NPI for each location you operate. The application for an NPI can be found on the NPPES website.
  3. Complete the online PECOS application to enroll in the online Medicate enrollment system.  
  4. Pay the required Medicare Application fee of $688, which can be made on the PECOS website.
  5. Check on the status of your application with your assigned enrollment contractor.  You can find the contact information for your enrollment contractor on the CMS website.
  6. Lastly, secure a $50,000 DMEPOS bond for each NPI that you have and post this bond to your enrollment contractor.

After you complete these steps, you will be enrolled with the CMS as a DMEPOS supplier and can start supplying medical devices to your clients. 

How do I renew my DMEPOS bond?

DMEPOS suppliers need to revalidate every three years with the CMS to continue to do business. You’ll need to keep your bond active during those three years so it’s crucial to renew it on time.  When renewing your bond, your surety company will reach out about 30 days before expiration to work on the renewal process.  Since a DMEPOS accreditation will last 3 years, you can also purchase a 3-year bond to save on the annual discount and focus on your bond and accreditation renewal at the same time. 

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