What is a Medicare bond?
The DMEPOS bond, also known as the Medicare Bond, is required for all organizations that want to file a claim or want to bill for medical equipment through the Medicare program. The obligee in this case will be a CMS provider. They do this to ensure the organization will be in compliance with the rules and regulations set forth for them by the State and the Federal Government.
DMEPOS Surety Bond
The purpose of the DMEPOS bond is to act as a financial guarantee to a medical facility is covered against any potential claims against it. In case such claims are made, the insurance company will pay the claim, and the DMEPOS organization will have to pay back the cost to the insurance company.
The CMS appointed 10 organizations to operate as the National Provider Identifier (NPI) for the Federal Government across the country. Whenever a DMEPOS business wants to operate in a certain location, they will have to provide the bond to the NPI of that location.
DMEPOS bid bond
If the DMEPOS business chooses to operate in multiple locations that are under the jurisdiction of one NPI, the business will only have to post the bond once. If the business, however, does choose to operate in different locations that are under different NPIs, then the business will have to post bonds to the different NPIs overseeing the different locations.
The cost of a DMEPOS bond is set at $50,000 for each NPI location. Purchasing one from a surety will be on a premium, which is calculated according to various factors such as: years of experience, and conduct history among other things.
How Does A DMEPOS Bond Work?
The NABP, the National Association of Boards of Pharmacy, describes a DMEPOS surety bond as a “bond issued by an entity (the surety) guaranteeing that a DMEPOS supplier will fulfill an obligation or series of obligations to a third party (the Medicare program). If the obligation is not met, the third party will recover its losses via the bond. ” https://nabp.pharmacy/help/what-is-a-dmepos-surety-bond/ “
DMEPOS Surety Bond Requirement
Some states may also require the DMEPOS business to acquire different bonds aside from those required by the NPI. A good example is Florida, which requires businesses to purchase either, or both Bonds for Medical Providers or the Bond for Medicaid Providers. Texas will also require a Medicaid provider bond and Minnesota a DMEPOS bond as well.
There are a few exemptions to this bond. These exemptions will apply to occupations and physical therapists who are in private practice. Even then, they will only be exempt if:
- The business is wholly owned by the occupational and physical therapist. They also need to be the ones operating it full time.
- The DMEPOS items are only for use with the patients of the occupational or physical therapist. This must be done within the therapist’s professional service.
- The business bills only for supplies, prosthetics, and orthotics.
Pharmacies and nursing homes that bill DMEPOS through Medicare do not get any exemptions.
DMEPOS bond for Dentists
DMEPOS bonds for dentists are now a requirement after the Code of Federal Regulations was updated in November of 2018. This means that for an enrollment to be successful, a dentist service will also need to post a bond that is equal to that of other practitioners if their practices use the Medicare Durable Medical Equipment service.
See our DMEPOS Bond Form Application here:
Like the rest of DMEPOS suppliers, dentists now must obtain a DMEPOS surety bond costing $50,000. This surety bond will be shown to the CMS during the procedure of enrollment. This way, the CMS will try to prevent fraud in its programs by only using suppliers that are enrolled.
New DMEPOS surety bond requirement for dentists
Now, some businesses do not need the requirement of bonding. The exemptions can range from you being a licensed private practice making custom orthotics and prosthetics, if you are already bonded under similar circumstances, or if you operate an IHF that is not completely ran by a tribe. Despite these exemptions, please check on the specifics for you before you skip the bonding process.
The DMEPOS bond is an instrument of security that safeguards the interests of the CMS and its programs’ beneficiaries. The DMEPOS bond provides protection in cases of fraud to Medicare, as well as any other sort of unlawful activities that parties might be a part of.
How to ensure your dental practice stays compliant
In February of 2019 the CMS started to send notifications to dentists to provide their DMEPOS bonds within 60 days of purchase/receipt. If you have received the notification, you must comply to get bonded, or fight the risk of losing your PTAN, your Medicare Provider Transaction Access Number. Accredited DMEPOS can only work with dental practices that are compliant with the bonding process, so they will check your bonding before deciding to work with your practice. Failing to follow the new rules can and will lead to financial fees and sanctions.
To be compliant with the new bond rules, you must apply for a DMEPOS bond with an authorized surety provider. Despite the DMEPOS bond amount $50,000 dollars, you would only need to cover a small amount of this money, typically ranging from .5% and 5%. This is the bond premium, but the premium that your practice will be billed is most likely to be lower if your finances are secure.
Medicare DMEPOS bond
To maintain or enroll billing privileges for Medicare, all DMEPOS suppliers must follow the Medicare quality and supplier standards to become or stay accredited. The requirement of accreditation applies to suppliers of a large assortment of medical equipment ranging from home dialysis supplies, therapeutic shoes, durable medical equipment, and more.
Pharmacy DMEPOS Bond Exemptions:
Your pharmacy may be exempt from accreditation if it meets each of the following requirements:
- Your pharmacy has been a supplier of a variety of durable medical equipment, orthotics, and prosthetics along with having a provider number for at least five years.
- The total bill from the DMEPOS by the pharmacy is less than 5% of total sales by the pharmacy.
- Your pharmacy as determined by the CMS must submit an attestation if CMS decides that the pharmacy can meet the first three points of criteria.
- Annually, a random selection of pharmacies will go through an audit. If the pharmacy submits select materials as requested by the audit, they can become exempt.
- The pharmacy has not been imposed by any final adverse action for at least five years