Durable Medical Equipment Bond – Medicare (DMEPOS) Bonds
What is a Medicare bond?
The DMEPOS bond, also commonly referred to as the Medicare Bond, is an indemnity agreement required for all organizations that want to secure the right to file a claim or bill medical equipment through the Medicare program. This is often a necessary step for organizations that carry a license to provide medical equipment to Medicare and Medicaid recipients. The obligee in this scenario is a CMS provider. Gaining approval involves a stringent enrollment process, managed by the National Supplier Clearinghouse. They carry out this contract-based assurance to ensure an organization will comply with the rules and regulations set forth by both State and Federal Government. A robust reimbursement system like this is in place to maintain a check and balance on the medical equipment suppliers, mitigating potential malpractice or violation of CMS guidelines. Physicians, agents, and other licensed professionals involved in this process often need email updates for the latest information.
Convenient and instant surety bond quote button is provided for the immediate use of licensed providers and healthcare organizations needing to secure a DMEPOS bond.
The DMEPOS bond is designed to act as a credit-backed financial guarantee to ensure a medical facility is covered against any prospective claims or liabilities. The bond amount is typically equivalent to certain types of Medicare Bonds. In situations when claims are made, the insurance company will cover the claim, and the DMEPOS organization will then have to reimburse the cost to the insurance company.
What is a DMEPOS Bond?
Understanding the Medicare bonding requirement for medical equipment suppliers
The Basics
A DMEPOS bond (Durable Medical Equipment, Prosthetics, Orthotics, and Supplies bond) is a $50,000 surety bond mandated by the Centers for Medicare and Medicaid Services (CMS).
This bond serves as a financial guarantee that suppliers will:
Comply with all Medicare regulations
Submit legitimate claims only
Provide quality products to beneficiaries
Maintain proper business practices
Why It Exists
Established under the Balanced Budget Act of 1997, the DMEPOS bond requirement aims to:
Prevent Medicare fraud and abuse
Protect taxpayer dollars
Ensure supplier legitimacy
Maintain program integrity
Compensate for fraudulent claims
The requirement became effective in October 2009 and has significantly reduced fraudulent Medicare billing.
How It Works
Three parties are involved:
Principal: The DMEPOS supplier
Obligee: Centers for Medicare & Medicaid Services (CMS)
Surety: The bonding company providing the guarantee
If CMS determines fraud or non-compliance, they can claim against the bond. The surety pays CMS, then seeks reimbursement from the supplier.
Important: The bond must remain active continuously throughout your participation in the Medicare program. Allowing your bond to lapse can result in immediate revocation of your Medicare billing privileges.
Medicare DMEPOS bond
What is a Medicare bond? A Medicare bond is an investment tool that finance the purchase of medical equipment, supplies for home healthcare, long-term care facilities, or other qualified providers in places like North Carolina, Rhode Island and Minnesota. Bonds can be purchased at face value, with no interest, or they can be bought at a discount by applicants in return for paying a higher interest rate over time. They are issued by state or local governments but backed by the U.S. Treasury Department to help ensure their safety as investments. For applicants, it’s also important to note that non-compliance to the rules, such as engaging in billing fraud, could lead to a felony conviction.
DMEPOS Surety Bond
The CMS, in its commitment to securing trust and compliance, maintains surety bonds as a mandatory requirement and has appointed 10 organizations to operate as the National Provider Identifier (NPI) for the Federal Government across the country, which includes Medicaid. This is particularly critical when a DMEPOS business intends to operate in specific locations, and these businesses need to provide the bond to the local NPI.
If the DMEPOS business decides to operate in multiple locations under the jurisdiction of a single NPI, there is only a need to post the bond once. However, if the licensed business branches off to different areas under various NPIs, it necessitates the posting of bonds for each distinct NPI managing the varied locales.
The costing parameter of a DMEPOS bond is set at $50,000 for each NPI-operated office. The bond is usually purchased from a surety on a premium, with the cost calculated based on factors such as years of experience in the industry, conduct history, Medicaid eligibility, and other professional determinant aspects.
Durable Medical Equipment Bond – DMEPOS bid bond
The NABP, the National Association of Boards of Pharmacy, characterizes 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.” More information can be garnered from their website.
Understanding & Function
How Does A DMEPOS Bond Work?
There are a few exemptions to this bond, applicable to private practice professionals, physical therapists, and others. They can provide care without concerning themselves with the complicated legal aspects linked to DMEPOS bonds. However, these exemptions are only applicable if, for instance, in certain states like California and Pennsylvania, the persons operating are licensed personnel with recognized licenses in the relevant orthotic section of the DMEPOS providers.
Who Needs A DMEPOS Bond?
Understanding which suppliers must be bonded and which qualify for exemptions
Required For:
Suppliers of durable medical equipment (DME)
Prosthetics and orthotics providers
Medical supply companies
Pharmacies billing for DMEPOS items
Home healthcare equipment providers
Nursing homes billing Medicare for DMEPOS
Dialysis suppliers
Respiratory equipment providers
Mobility equipment suppliers
Exempt Suppliers:
Physicians providing equipment only to their own patients
Physical/occupational therapists who solely own their practice and only serve their patients
State-licensed orthotists/prosthetists in private practice providing custom products
Government-operated DMEPOS suppliers with state-level comparable bonds
Certain hospital-based providers
Note: Exemptions have specific criteria. Verify your eligibility with your enrollment contractor.
Special Cases:
Dentists (Since 2018)
Dentists who bill Medicare for DMEPOS items now require bonding following regulatory updates.
Pharmacies
If your pharmacy bills Medicare for non-accredited products (Epoetin, immunosuppressive drugs, infusion drugs, nebulizer drugs, oral anticancer drugs), you must maintain a bond.
Multi-Location Operations
Each location with its own National Provider Identifier (NPI) requires a separate $50,000 bond.
Exemption Changes: If you previously qualified for an exemption but your circumstances change, you have 60 days to obtain a bond or risk losing Medicare billing privileges.
Requirements & Regulations
DMEPOS Surety Bond Requirement
Pharmacies and nursing homes that bill DMEPOS through Medicare, including Medicare Part B, do not receive any exemptions. They are mandated to adhere to these compliance protocols, and these obligations are communicated via regular email updates to keep them informed about any regulatory changes or updates regarding the DMEPOS bond. It’s worth noting that 99% of such institutions fall under these regulations. This information, along with other relevant updates, can usually be found on the official site of these institutions. It is not unordinary for companies, be it from the United States or elsewhere, to leverage social media platforms such as YouTube to notify their clients of significant changes with a purpose of wide coverage.
The demands for DMEPOS bonds for dentists have surged, especially after the revision in the Code of Federal Regulations in November 2018. Notice of this revision was published in the federal register and sparked a significant increase in interest from practitioners across all states. In other words, for successful enrollment under this section, a dental service will also need to post an equal amount of bond, often accompanied by a standard fee, like other practitioners if they employ the Medicare Durable Medical Equipment service.
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.
Like other DMEPOS suppliers, dentists are now bound to obtain a DMEPOS surety bond costing $50,000 for coverage purposes. This surety bond becomes a pivotal part during the procedure of enrollment and will be shown to the CMS. This strategy, enforced by the personnel at CMS, empowers the CMS to thwart any possible fraud in its programs by only incorporating suppliers that are enrolled. 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, based on the DMEPOS supplier standards, before you decide to skip the bonding process. Always be prepared to ask any content-related questions for your practice location. It is recommended to constantly check for updates on rates and other relevant regulations.
State-Specific Requirements
Additional bonding requirements by state
Federal Requirement: The $50,000 DMEPOS bond is a federal requirement that applies in all 50 states. Some states have additional bonding requirements beyond the federal mandate.
Minnesota
Additional Requirement: $50,000 Minnesota Health Care Programs DMEPOS Bond
Minnesota DMEPOS suppliers must file a separate state bond with the Department of Human Services in addition to the federal requirement.
Total: $100,000 in bonding for Minnesota suppliers
Florida
Additional Requirements: Home medical equipment providers and Medicaid providers may have additional state bonding requirements.
Verify with Florida Department of Health and Florida Agency for Health Care Administration.
Texas, Indiana, Other States
Some states have separate Medicaid provider bond requirements. These are distinct from the Medicare DMEPOS bond.
Action: Check with your state Medicaid agency if you participate in state Medicaid programs.
Compliance Note: State requirements are in addition to, not instead of, federal DMEPOS bonds. Always verify current requirements with your state regulatory agencies as requirements can change.
Pharmacy DMEPOS Bond Exemptions:
A Medicare bond is a type of security that can be purchased by applicants to guarantee payment for items or services provided by suppliers. These bonds are regulated by the federal government. They have strict guidelines that applicants must meet before they can be issued in locations like Arkansas, Washington D.C., or Minnesota. Brokers often guide applicants through this underwriting process to ensure everything is in order. If you’re an applicant seeking an assurance that your payments will not fall victim to fraud or get denied, Medicare bonds are a promising option to consider.
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 year
Dentist-Specific Guidance
DMEPOS bond for Dentists
The Durable Medical Equipment Prosthetics Orthotics & Supplies (DMEPOS) bond serves the purpose of being a tool of security that safeguards the interests of the CMS and its programs’ beneficiaries especially in states like California and Pennsylvania where several DMEPOS providers operate. The DMEPOS bond provides protection in cases of fraud to Medicare and DME forms, as well as any other sort of unlawful activities that parties might be a part of.
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 based on the DMEPOS supplier standards before you bypass the bonding process. Always check the official site or the federal register for the latest notice regarding exemptions and their associated qualifications.
New DMEPOS surety bond requirement for dentists
The DMEPOS bond, a vital purpose-serving instrument of security, safeguards the interests of the CMS and its programs’ beneficiaries. The DMEPOS bond provides coverage in cases of fraud to Medicare, as well as any other sort of unlawful activities that participants might partake in. It is crucial to constantly review updates regarding the DMEPOS bond to ensure compliance, especially if your operation is within the United States.
To maintain or enroll billing privileges for Medicare, including Medicare Part B, 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 wide assortment of medical equipment ranging from home dialysis supplies, therapeutic shoes, to durable medical equipment, and more. These standards also stipulate a list of required qualifications that suppliers need to adhere to for coverage purposes. These qualifications may vary from state to state, whether suppliers are based in Rhode Island, Arkansas, Washington, Washington D.C., Tennessee, Texas, South Carolina, North Carolina, New Jersey, Massachusetts, or any other parts of the U.S.
How to ensure your dental practice stays compliant
Your pharmacy may be exempt from accreditation if it meets each of the following requirements, particularly crafted with the purpose of ensuring high-quality service. It’s important to remember that regulations may slightly vary depending on the state in which your pharmacy is established, hence affecting the scope of coverage. As such, keeping up-to-date with the latest from the federal register or the site of your state pharmacy board, and promptly informing your clients or applicants about any related changes, could be vital to your operations. Whether in Tennessee, Texas, Minnesota, or even Washington, your pharmacy might have different requirements to meet exemption. This can be specific for individuals or applicants running these establishments or where billing fraud could be a concern. Always remember that, like any other applications for legal business operations, abuse of processes and rules is not tolerated and could lead to felony convictions.
A Medicare bond is a type of security that can be purchased to guarantee payment for items or services provided by suppliers. These bonds are regulated by the federal government and have strict underwriting guidelines for applicants to meet, known as ‘M’ guidelines before they can be issued in states like New Jersey, Massachusetts, South Carolina or even Minnesota. Insurance brokers can guide applicants through the process. These M guidelines are uniform whether you are in New Hampshire or Wisconsin. If you’re an applicant looking for a way to ensure your payments will not get denied, this could be an option.
Medicare is a federal health insurance program that aids individuals by helping pay for the cost of healthcare for people who are 65 or older, younger people with disabilities, and specific groups of veterans. One way to help cover costs associated with Medicare for applicants is through a durable medical equipment bond which acts as a buffer against fraudulent actions such as billing fraud.
Cost, Application & Claims
DMEPOS Bond Cost
Understanding pricing based on your credit profile and business history
Excellent Credit
0.5-1%
$250 – $500 annually
Credit score 720+, no adverse actions, strong financials
Most Common
Good Credit
1-3%
$500 – $1,500 annually
Credit score 680-719, clean business history
Fair Credit
3-5%
$1,500 – $2,500 annually
Credit score 640-679, some credit issues
Challenged Credit
5-12%
$2,500 – $6,000 annually
Credit score below 640, significant issues
Factors Affecting Your Rate
Credit-Based Factors
Personal and business credit scores
Credit history length
Payment history
Outstanding debts
Recent bankruptcies or judgments
Business Factors
Years in business
Annual Medicare receipts
Type of equipment supplied
Number of locations
Business structure
Compliance History
Previous Medicare violations
License suspensions or revocations
Felony convictions
Program exclusions
Civil monetary penalties
Elevated Bond Requirements: If you’ve had adverse legal actions in the past 10 years (Medicare revocation, license suspension, felony conviction, or program exclusion), CMS may require an additional $50,000 bond for each occurrence, significantly increasing your costs.
Multi-Location Cost Example
Number of Locations (NPIs)
Total Bond Amount
Annual Cost (1% rate)
Annual Cost (3% rate)
Annual Cost (5% rate)
1 Location
$50,000
$500
$1,500
$2,500
3 Locations
$150,000
$1,500
$4,500
$7,500
5 Locations
$250,000
$2,500
$7,500
$12,500
10 Locations
$500,000
$5,000
$15,000
$25,000
Cost-Saving Tip: While each location needs $50,000 in coverage, you can often consolidate multiple locations on a single bond document with addenda, potentially reducing administrative costs and simplifying renewal management.
How To Get Your DMEPOS Bond
Step-by-step process from application to Medicare enrollment
1. Obtain DMEPOS Accreditation
Before applying for your bond, you must receive accreditation from a CMS-approved organization. The accreditor will verify your business meets DMEPOS Quality Standards and conduct periodic site visits.
CMS-Approved Accreditors:
The Joint Commission
Accreditation Commission for Health Care (ACHC)
Community Health Accreditation Partner (CHAP)
Timeline: Accreditation typically takes 60-90 days. Start this process early.
2. Obtain Your National Provider Identifier (NPI)
Apply through the National Plan & Provider Enumeration System (NPPES) at nppes.cms.hhs.gov
You need a separate NPI for:
Each physical practice location
Each separately enrolled business entity
Exception: Sole proprietorships receive only one NPI but must still enroll each location separately.
Timeline: NPI assignment is usually immediate online or within 10 days by mail.
3. Apply For Your Surety Bond
Contact a surety bond provider with the following information:
Business legal name and address
Tax Identification Number (TIN)
National Provider Identifier(s) (NPI)
PTAN number (if you have one)
Type of DMEPOS equipment supplied
Years in business
Annual Medicare receipts
Owner’s personal credit information
Business and personal financial statements (if requested)
Timeline: Most surety bonds can be quoted and issued within 24-48 hours for standard applications. Complex cases may take 3-5 business days.
4. Complete Medicare Enrollment Application
Use PECOS (Provider Enrollment, Chain, and Ownership System) to submit your CMS-855S application online at pecos.cms.hhs.gov
Required Sections for Bond Submission:
Section 1: Identification Information
Section 6: Practice Location Information
Section 7: Contact Information
Section 11: Additional Documentation (Optional)
Section 12: Authorized or Delegated Official
Section 14 OR 15: Signature
5. Pay Medicare Application Fee
The Medicare enrollment application fee is $688 (2023 rate). Pay through PECOS at the time of application submission.
Note: This fee is separate from your bond premium and is paid directly to CMS.
6. Submit Bond to National Provider Enrollment Contractor
Since November 2022, DMEPOS applications are processed by the National Provider Enrollment (NPE) East or West contractors, not the National Supplier Clearinghouse (NSC).
Your bond must include specific information for each location:
Tax Identification Number (TIN)
Legal business name
Physical address
National Provider Identifier (NPI)
PTAN number (if assigned)
7. Wait For Approval and Maintain Compliance
Your enrollment contractor will review your application. Processing time varies but typically takes 60-90 days.
Once approved, you must:
Keep your bond active and continuously in force
Report any changes within 30 days (ownership, location, adverse actions)
Undergo periodic unannounced accreditation site visits
Revalidate your enrollment every 5 years
Renew your bond annually before expiration
Critical: Allowing your bond to lapse will result in immediate revocation of Medicare billing privileges. Set calendar reminders well before your renewal date.
Typical Enrollment Timeline
Day 1-90: Accreditation Process
Obtain accreditation from CMS-approved organization
Day 90-92: NPI Application
Apply for and receive your National Provider Identifier
Day 92-94: Bond Application
Apply for and receive your surety bond
Day 94-95: PECOS Enrollment
Complete and submit Medicare enrollment application
Day 95-185: Processing
NPE contractor reviews application (60-90 days)
Day 185+: Approval & Billing
Receive Medicare billing privileges and PTAN
Understanding Bond Claims
What happens when CMS makes a claim against your bond
When Claims Occur
CMS may make a claim on your DMEPOS bond for:
Fraudulent Medicare billing
Unpaid Medicare overpayments
Civil Monetary Penalties (CMPs)
Assessments imposed by CMS or OIG
Failure to comply with supplier standards
The Claims Process
CMS sends written notice to both you and your surety company
Surety has 30 days to pay up to the full bond amount
Payment includes claim amount, accrued interest, and penalties
You must reimburse the surety company for all amounts paid
Intent to Refer Letters
Before bond activation, you’ll receive an Intent to Refer (ITR) letter when debt ages 80-90 days:
Notification sent to you and your surety
30-day window to resolve debt
If unresolved, repayment letter sent to surety
Surety has 45 days to pay CMS
Your Financial Responsibility: Unlike insurance, surety bonds are a credit instrument. You remain fully responsible for reimbursing the surety company for any claims paid, plus their collection costs and legal fees. Failure to reimburse can result in legal action, asset liens, and damage to your credit.
Practical Insight
Real-World Scenarios
How different suppliers navigate DMEPOS bonding
Case Study 1: Single-Location DME Supplier
Business Profile:
One location in Ohio
Owner with 720 credit score
5 years in business
Annual Medicare receipts: $400,000
Bonding Solution:
Single $50,000 bond
Annual premium: $500 (1% rate)
Same-day approval
Electronic delivery
Outcome: Smooth enrollment, Medicare billing approved within 75 days.
Case Study 2: Multi-Location Chain
Business Profile:
7 locations across 3 states
Corporate entity
Strong financials
700 credit score
Bonding Solution:
One consolidated bond: $350,000
Each location listed on bond form
Annual premium: $7,000 (2% rate)
3-day approval with financial review
Outcome: Simplified administration, single renewal date for all locations.
Case Study 3: Pharmacy with Past Issues
Business Profile:
Independent pharmacy
Previous Medicare audit findings
Owner credit score: 640
Financial statements provided
Bonding Solution:
Elevated bond: $100,000 (base + 1 adverse action)
Annual premium: $5,000 (5% rate)
5-day approval with underwriting review
3-year elevated term
Outcome: Successfully re-enrolled after corrective action. After 3 years of compliance, reverted to $50,000 base bond at lower rate.
Insights & Interesting Facts
Durable medical equipment (DMEPOS) bonds, mandated by CMS since 2009, require $50,000 minimum per NPI for Medicare suppliers of wheelchairs, oxygen, prosthetics, etc., rising $50,000 per adverse action in the past 10 years. They protect against billing fraud, with premiums 0.5-2% for good credit.
Bond Escalation
Base $50k adjusted from 1997 $50k (now ~$65k CPI-equivalent); high-risk adds $50k per adverse action like felony or payment suspension.
Premium Costs
$250 for $50k (0.5%) or $500 for higher; U.S. DME market $70.66B in 2025, $74.69B projected 2026.
Claim Liability
Sureties pay unpaid claims, CMPs, assessments + interest; MACs notify within 6 months of claim determination.
Supplier Impact
All ~60,000 DMEPOS suppliers need bonds continuously; non-compliance revokes Medicare billing.
Market Growth
Global DME $173.15B in 2021 to $282.9B by 2028 (6.8% CAGR), fueling bonding demand.
Risk Level
Bond Amount
Premium Est.
Adjustment
Base
$50,000
$250 (0.5%)
Per NPI
CPI-Adjusted
~$65,000
$325
1997 value 2007
1 Adverse Action
$100,000
$500
Past 10 years
2+ Actions
$150k+
1-2%
Felony/suspension
Market Size US
$70.66B
N/A
2025 estimate
What are some Other Durable Medical Equipment Bond Things to Consider?
What is a Medicare bond? A Medicare bond is an investment tool that helps finance the purchase of medical equipment and supplies for home healthcare, long-term care facilities or other qualified providers in states like Texas. Applying for these bonds involves underwriting, and brokers can guide applicants through this process. They are issued by state or local governments, but are backed by the U.S. Treasury Department, ensuring investments’ safety. Applicants must be cautious, as non-compliance with regulations, such as a felony conviction for billing fraud, can lead to the bond’s disqualification.
Support & Closure
Frequently Asked Questions
Common questions about Medicare DMEPOS bonds
What happens if my DMEPOS bond is canceled?
If your DMEPOS bond is canceled or lapses, the Centers for Medicare and Medicaid Services (CMS) can immediately revoke your Medicare billing privileges. This means:
You will lose the ability to bill Medicare for any equipment or supplies
You cannot submit claims until you secure new bonding
Your practice may face significant revenue disruption
You may need to reapply for Medicare enrollment
Patient care relationships may be affected
You must maintain continuous bond coverage throughout your participation in the Medicare program. Set calendar reminders well before your renewal date, and consider setting up automatic renewal with your surety provider to prevent accidental lapses.
Can I get one bond for multiple locations?
Each location with its own National Provider Identifier (NPI) requires a separate $50,000 bond. However, you can obtain a single bond document that covers multiple locations by listing each location’s information on the bond form or through addenda.
Example: If you operate 5 locations with 5 different NPIs, you need $250,000 in total bond coverage. You can either:
Obtain 5 separate $50,000 bonds, or
Obtain one $250,000 bond that lists all 5 locations
Each location listed must include:
Tax Identification Number (TIN)
Legal business name
Physical address
National Provider Identifier (NPI)
PTAN number (if assigned)
Consolidating on one bond document can reduce administrative complexity and may offer slight cost savings on surety fees.
Can I get a DMEPOS bond with bad credit?
Yes! While credit is a significant factor, most surety companies offer specialized programs for applicants with challenged credit. Approval rates exceed 99% for DMEPOS bonds.
Bad credit programs typically:
Charge higher premiums (5-12% vs 0.5-3%)
May require personal or business financial statements
Could ask for collateral in extreme cases
Might require a co-signer or indemnitor
Credit issues that can be accommodated:
Low credit scores (below 640)
Past bankruptcies
Collections or charge-offs
Tax liens
Limited credit history
Working with a surety specialist who has access to multiple bonding companies increases your chances of approval and competitive pricing despite credit challenges.
Do DMEPOS bonds renew annually?
Yes, most DMEPOS bonds require annual premium payment, though the bond itself runs continuously from the effective date until canceled. Here’s how renewal works:
Base $50,000 bonds:
Continuous term (not limited duration)
Annual premium billing
Must be renewed before expiration
30-90 day advance renewal notice typical
Elevated bonds (for adverse actions):
3-year term established by CMS
Annual premium billing during term
May reduce to base amount after 3 years if no new violations
At renewal:
Your rate may adjust based on credit changes
Better credit = potential rate reduction
Worse credit = potential rate increase
Shopping rates at renewal can save money
Set calendar reminders for 90 days before renewal to allow time for rate shopping and prevent lapses.
Are pharmacies required to have DMEPOS bonds?
It depends on what your pharmacy bills to Medicare. Pharmacy exemptions are complex and have specific criteria:
Pharmacies MUST be bonded if:
Billing for non-accredited DMEPOS products
Providing Epoetin
Providing immunosuppressive drugs
Providing infusion drugs
Providing nebulizer drugs
Providing oral anticancer drugs
Pharmacy exemption criteria (ALL must be met):
Been a supplier with a provider number for at least 5 years
DMEPOS billing is less than 5% of total pharmacy sales
Submit attestation to CMS upon request
Pass random audits if selected
No final adverse actions in past 5 years
If you meet all five criteria, you may qualify for exemption. However, if any criterion isn’t met, you must obtain the full $50,000 bond. When in doubt, contact your NPE contractor to verify your exemption status.
How do I update my bond information with CMS?
You must report changes to your bond or business within 30 days to maintain compliance:
Changes requiring updates:
New practice locations (requires additional bond)
Closed practice locations
Change of ownership
Change of business name or legal structure
New surety company (if you switch providers)
Bond cancellation or renewal
How to update:
Online: Through PECOS at pecos.cms.hhs.gov
Paper: Submit CMS-855S form to your NPE contractor
Required sections: 1, 6, 7, 11 (optional), 12, and 14 or 15
Adding new locations:
Obtain new $50,000 bond or bond amendment
Submit updated CMS-855S
Wait for NPE approval before billing from new location
Failure to report changes within 30 days can result in billing privilege revocation. Work with your enrollment contractor if you’re unsure about reporting requirements.
What’s the difference between accreditation and bonding?
Both are required for Medicare DMEPOS suppliers, but serve different purposes:
DMEPOS Accreditation:
Quality assurance process
Verifies compliance with DMEPOS Quality Standards
Conducted by CMS-approved organizations (Joint Commission, ACHC, CHAP)
Involves on-site inspections
Periodic unannounced visits
3-year accreditation cycle
Costs: $1,000-$5,000+ depending on organization and scope
DMEPOS Surety Bond:
Financial protection mechanism
Guarantees compliance with Medicare regulations
Protects Medicare from fraud and unpaid claims
Required from certified surety companies
$50,000 minimum per NPI location
Annual premium: $250-$6,000+ based on credit
Continuous coverage required
Timeline: Obtain accreditation first, then the bond, then complete Medicare enrollment. Both must remain active throughout your participation in Medicare.
What is a Medicare bond? A Medicare bond is an investment tool that helps finance the purchase of medical equipment and supplies for home healthcare, long-term care facilities or other qualified providers in various states like Texas. They are issued by state or local governments, but backed by the U.S. Treasury Department to help ensure their safety as investments. Bonds can be purchased by applicants at face value with no interest, or they can be bought at a discount in return for paying a higher interest rate over time.
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How to Complete the Bond Application - Short Form Walkthrough
