Durable Medical Equipment, Prosthetics, Orthotics, and Supplies. DMEPOS Surety Bonds

The Federal Government has announced a new Surety Bond requirement for DMEPOS Suppliers.  A DME Bond, Medicare Bond or DMEPOS Bond is the type of bond.  As of October 2, 2009 all current Durable Medical Equipment Providers, Prosthetics Providers, Orthotics Providers and Medical Supplies Provers must post a $50,000. All new DME providers must be in compliance by May 4, 2009. This surety bond aims to prevent fradulent activity within the industry and regulate the application process.
These bonds might also be called: Medicare Bonds, Medicaid Bonds or Durable Medical Equipment Suppliers Bond.
The surety bond guarantees that the Medicare program will be able to recoup losses due to fraudulent activity or abusive billing practices. 

Providers licensed as a Pharmacy to dispense prescriptions by a

DMEPOS Surety Bond Final Rule

On January 2, 2009, the Centers for Medicare & Medicaid Services (CMS) published a final rule imposing surety bond requirements on certain Medicare suppliers of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS). Specifically, suppliers generally will be required to post a $50,000 surety bond from an authorized surety, unless (1) the supplier is a high-risk supplier, in which case the bond amount will be increased, or (2) the supplier qualifies for an exemption from the surety bond requirement. A separate surety bond will required for each NPI obtained for DMEPOS billing purposes. With regard to high-risk suppliers, CMS requires an elevated surety bond amount of $50,000 per occurrence of an adverse legal action (e.g., revocation of Medicare billing number; suspension of a health care license by a state licensing authority; revocation or suspension of accreditation; felony conviction; or federal or state health care program exclusion or debarment) within the 10 years preceding enrollment, revalidation, or reenrollment. CMS has adopted exceptions to the surety bond requirement for physicians and nonphysician practitioners (NPPs) furnishing the items to their own patients as part of their professional service. Likewise, CMS has created an exception for the provision of orthotics, prosthetics, and supplies by (1) state-licensed orthotic and prosthetic personnel and (2) state-licensed physical and occupational therapists providing such items to their own patients. This exception is limited to personnel and therapists operating in private practice; medical supply companies employing such personnel or therapists do not qualify for this exception. An exception also applies to suppliers operated by a federal, state, local, or tribal government agency if the supplier has provided CMS with a comparable surety bond under state law. Despite requests by commenters, CMS did not establish exceptions for pharmacies or for nursing facilities that bill for Medicare DMEPOS services provided to their own residents. A supplier must submit the surety bond with its initial Medicare enrollment application or with its revalidation or reenrollment application. In addition, DMEPOS suppliers must submit a surety bond when a change of ownership occurs or when seeking to enroll a new location (unless the DMEPOS supplier is a sole proprietorship). The rule is effective March 3, 2009. Existing suppliers must comply with the surety bond requirement 9 months after enactment (October 2, 2009), while new enrolling suppliers or suppliers seeking to change ownership after the effective date must meet this requirement 120 days after the effective date (May 4, 2009).

DMEPOS Enrollment - Centers for Medicare & Medicaid Services