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DMEPOS Bond

In 2009, the Centers for Medicare and Medicaid Services (CMS) mandated bonding in an effort to curb medical billing fraud committed by physicians and other medical practitioners. This established a requirement for most suppliers of durable medical equipment, prosthetics, orthotics, and supplies to acquire a specific $50,000 surety bond. The DMEPOS bond is required in all 50 states.

What is a DMEPOS Bond?

A Durable Medical Equipment, Prosthetics, Orthotics, and Supplies Bond, also known as a DMEPOS bond or a Medicare surety bond, is a surety bond required of most suppliers of durable medical equipment (DME). The bond requirement is in place to protect Medicare and Medicaid. The Medicare bond guarantees that all claims submitted by the bonded party to Medicare will be legitimate. The DMEPOS bond makes the surety liable for any unpaid claims, an unpaid claim being an overpayment from Medicare/Medicaid to the DMEPOS supplier. Essentially, the underwriting surety company guarantees the CMS that any fraudulent claims to Medicare by the bonded party will be rectified, up to the bond penalty amount.

The CMS rule requires that durable medical equipment DME suppliers must be bonded and must maintain the bond on a continuing basis. The minimum DMEPOS bond amount is $50,000. However, the bond amount may be higher for DME suppliers with more than one National Provider Identifier (NPI).

How Does a DMEPOS Bond Work?

Just as with any type of surety bond, there are three essential parties to a DMEPOS bond. They are:

• The Principal – This is the DMEPOS supplier who requires bonding.
• The Obligee – This is the Center for Medicare and Medicaid Services (CMS) or a state Medicaid agency.
• The Surety – This is the surety agency that underwrites the DMEPOS bond.

Through this Medicare bond, the Surety provides a financial guarantee that the Principal will bill the Obligee fairly and not engage in fraud. If a disputed claim occurs, Medicare or Medicaid can make a claim on the DMEPOS Bond. At that point, the Surety makes the required payment, up to the bond amount, to settle the claim. The Surety, in turn, will attempt to collect the paid amount from the DMEPOS supplier. The supplier, as the bond Principal, is ultimately financially responsible for any amount paid out on a claim by the Surety.

Who Needs a DMEPOS Bond?

DMEPOS suppliers who provide patients with durable medical equipment, prosthetics, orthotics, and other supplies must obtain a DMEPOS bond in order to bill Medicare or Medicaid. Section 424.57 of 42 CFR defines a DMEPOS supplier as "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 may be a hospital, skilled nursing facility, hospice care, home health care, or a related organization. Part B covered DMEPOS items are those prescribed by a Primary Care Physician, (PCP) such as:

• Blood sugar meters and testing supplies
• Mobility aids, like canes, crutches, walkers, wheelchairs, scooters
• CPAP devices
• Commode chairs
• Hospital beds
• Oxygen equipment and accessories
• Patient lifts
• Traction equipment
• Other Durable Medical Equipment (DME)

Qualifying DME meets the following criteria:

• Durable or capable of repeated use
• Used for a medical reason
• Typically of no use to someone who doesn't have a medical need for it
• Used in the home
• Typically has an expected lifespan of three or more years

If you provide DME and wish to bill Medicare or Medicaid, you must get a DMEPOS bond.

Medicare Surety Bond Requirements

The Centers for Medicare and Medicaid Services legislation establishes the surety bond requirements for Medicare bonds.

• Specific Bond form – A bond form is the actual document that contains the wording of the bond. In many cases, the governing agency will require the use of their specifically worded bond forms. Often, we already have a copy of these bond forms on file.
• Bond Amount – The governing agency will specify the bond amount. This information needs to be passed to the surety to get a quote. The minimum DMEPOS surety bond requirement is $50,000, but, in some cases, it can be higher.

How Much Does a DMEPOS Bond Cost?

The cost of a DMEPOS bond is an annual premium that is a small fraction of the bond's value. An applicant with sterling credit will typically pay 1 - 3% of the bond amount, or $500 - $1,000. The poorer the credit rating, the higher the rate that will be charged for DMEPOS Bonds. The best way to get a truly accurate quote for a DMEPOS Bond is to apply for the bond and let the underwriter review your request and put a quote together.

Viking Bond Service, Inc. will always attempt to get the best rate for any surety bond request. We offer a bad credit surety bond program that helps those with troubled credit to obtain an affordable DMEPOS bond. In instances where the rate is high to start due to challenged credit, our renewal department can remarket the bond if there has been an improvement in credit and/or financial standing.

How to Get a DMEPOS/Medicare Surety Bond?

We make it easy to obtain a surety bond at Viking Bond Service.

To apply for your Medicare surety bond, please complete our Online Application. A financial statement is not always needed but may be required along with the application. One of our friendly and knowledgeable agents will let you know if a financial statement will benefit the quote.

Once we receive your application, we will work to get you the best quote for your request. Typically, we will get you the quote the same day or within 24 hours. All Viking Bond Service, Inc. quotes are FREE with No Obligation.

The final step is simply to pay the premium and receive your DMEPOS bond.

Request Your DMEPOS Bond Quote Today

Viking Bond Service is your surety partner. We will guide you at every step and are happy to get you the best possible pricing for all your surety needs. You are welcome to call us with any questions at 1-888-2-SURETY (1-888-278-7389) or contact us online. We're here to help you make the wise choice for your business.