Medicare (DMEPOS) Bonds
Medicare Bonds, often referred to as DMEPOS Bonds, are mandatory for manufacturers and suppliers of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS). The regulation took effect in January 2009 after a rule imposed by the Centers for Medicare & Medicaid Services (CMS). The requirement is aimed at curbing medical fraud and malpractice.
In most cases, suppliers are required to obtain a $50,000 surety bond. There are a couple unique exceptions. The bond amount will actually increase beyond $50,000 for suppliers deemed high risk. At the same time, some suppliers may qualify for an exemption from the Medicare (DMEPOS) Bond requirement.
Physicians and non-physician practitioners, as defined in section1842(b)(18) of the Social Security Act, if the items are furnished only to the physician or non-physician practitioner's patients as part of the service. Also covered are:
- certified nurse-midwives
- certified registered nurse anesthetists
- clinical psychologists and registered dietitians or nutrition professionals.
- clinical nurse specialists
- clinical social workers
- nurse practitioners
- physician assistants
Physical and occupational therapists in private practice are exempted if 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; and, the business is only billing for orthotics, prosthetics and supplies.
Suppliers with multiple locations need to be aware that bonds are required for each National Provider Identifier (NPI). For example, a larger DMEPOS supplier with five locations would have to obtain a $250,000 Medicare (DMEPOS) Bond, one for each location. Further, DMEPOS suppliers will have to obtain additional $50,000 surety bonds for any adverse legal actions taken against the company within the past 10 years before enrolling. Those adverse legal actions can include:
- Losing Medicare billing privileges
- Suspension or revocation of a license
- Loss or suspension of accreditation
- A felony conviction
- Exclusion from a federal or state health care program
There are no exceptions for nursing homes or pharmacies that bill for Medicare DMEPOS to their own residents. The new regulation also requires suppliers to submit a Medicare (DMEPOS) Bond upon a change of ownership or a move to enroll a new business site.
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