DMEPOS (Medicare Bond)
What is a Medicare Bond?A DMEPOS surety bond, which is also referred to as a Medicare bond, is a federal surety bond required by the Centers for Medicare Medicaid Services CMS. It is intended for suppliers of KWle medical equipment, prosthetics, orthotics, and supplies. The purpose of the Medicare bond is to limit the number of Medicare billing fraud cases. Suppliers must post a special bond amount for each of their National Provider Identifier NPI practice locations. However, this must be done before receiving authorization to bill Medicare Medicaid services. For situations where the applicant has been involved in past legal actions such as convictions, loss of accreditation, or loss of Medicare billing privileges, then the surety bond limit will cost a higher amount.
Types of DMEPOS BondsNow that you know a little background on DMEPOS bonds, we’ll now talk about the different types of DMEPOS bonds out there. There are two different types of DMEPOS bonds to consider:
- Durable Medical Equipment Suppliers Bond (DMEPOS) (bond amount: $50,000)
- Medicare DMEPOS Competitive Bid Bond
Medicare Surety Bond RequirementThere are some strict requirements to understand about these types of surety bonds. In a final rule titled, "Medicare Program: Surety Medicare Bond Requirement for Suppliers of Durable Medical Equipment Prosthetics Orthotics and Supplies DMEPOS", The Centers for Medicare Medicaid Services CMS published this in the Federal Register that requires non-exempt DMEPOS suppliers to furnish and maintain a surety bond on a continuing basis. In section 4312(b), it states that a surety bond in a penal sum or coverage amount must exceed $50,000. Another factor is that DMEPOS suppliers must submit a $50,000 surety bond for every single National Provider Identifier (NPI) to the National Supplier Clearinghouse (NSC). A National Provider Identifier (NPI) must be issued for every practice location (except for sole proprietorships). That being said, a separate surety bond DMEPOS is necessary for every additional location. It’s also important to note that certain DMEPOS suppliers are exempt from surety bond requirements. Take a look at the business suppliers that are exempt:
- Government-owned suppliers have provided CMS with a comparable surety bond under state law.
- State-licensed orthotic and prosthetic personnel in private practice who develop custom orthotics and prosthetics; however, the business must be solely owned and operated by said personnel and the business must only bill for orthotic prosthetics and relevant supplies.
- Physicians and non-physician practitioners only if the DMEPOS equipment is built for the needs of his or her patients as part of the business’ professional services
- Physical and occupational therapists if the business is solely owned and operated by the therapist, and only if the DMEPOS devices are built for the needs of their patients as part of his or her services.
How Do I Become an Enrolled and Accredited DMEPOS Provider?There are currently ten national accreditation organizations that are used to accredit suppliers of durable medical equipment prosthetics orthotics and supplies DMEPOS who meet quality standards under Medicare Part B. When looking to enroll and maintain Medicare Medicaid billing privileges, all DMEPOS non-exempt suppliers must comply with the Medicare program's quality standards and supplier standards (42 CFR §424.57 (c)) in order to become accredited. The following suppliers must all be accredited:
- Durable medical equipment
- Medical supplies
- Home dialysis supplies and equipment
- Parenteral/enteral nutrition
- Transfusion medicine and prosthetic devices
- Therapeutic shoes
- Prosthetics and orthotics
What Are the DMEPOS Supplier Standards?There are numerous key DMEPOS supplier standards to understand. Take a look at these important standards below:
- Compliance must be met by a supplier that includes all applicable federal and state licensing and regulation requirements.
- Complete and accurate info must be present on the DMEPOS supplier application. If changes are needed, they must be reported to the federal National Supplier Clearinghouse within 30 days.
- An authorized person must sign the enrollment application in order to have billing privileges.
- Suppliers must complete orders by filling from their own inventory, or they must contract with other businesses to purchase the necessary items to fill the orders. A supplier must never contract with someone who is excluded from the Medicare program.
- A supplier must explain to beneficiaries that they can rent or buy cost-effective or routinely purchased durable medical equipment.
- Beneficiaries must be notified by the supplier regarding warranty coverage and they also must honor those warranties under applicable state law.
- Another requirement is that suppliers must maintain a physical facility on an appropriate site and that the site has a visible sign where the hours of operation are posted.
- CMS or the supplier’s agents must complete on-site inspections to ensure compliance.
- A primary business phone number must be used in a local directory or a toll-free number must be available.
- Comprehensive liability insurance in the amount of $300,000 must be obtained. This should cover the place of business and all customers of employees belonging to the supplier.
- Direct solicitation to Medicare beneficiaries is prohibited.
- Delivery is the responsibility of the supplier and they must instruct beneficiaries on how to use Medicare-covered items.
- Another requirement is that suppliers must answer questions in regards to complaints from beneficiaries.
- With Medicare-covered items rented out to patients, the supplier must maintain and replace these devices at no charge, repair directly, or contract out to another company for the repairs.
- Supplier must accept substandard and unsuitable items from beneficiaries.
- These standards must be disclosed to beneficiaries.
- If someone has ownership, financial, or control interest in the supplier, then the supplier must disclose that person.
- The supplier’s Medicare billing number should never be changed or reassigned.
- Suppliers must always have a complaint resolution protocol.
- Complaint records must include name, address, phone number, and health insurance claim number. There also needs to be a summary of the complaint and the actions used to resolve it.
- There must be an agreement to furnish CMS any information required by the Medicare statute and implementing regulations.
- In order to receive and keep a supplier billing number, the supplier must be accredited by a CMS-approved accreditation organization.
- When a new DMEPOS location is opened, the appropriate accreditation organization must be notified.
- DMEPOS quality standards must be met at all supplier locations. They also must be separately accredited.
- Upon enrollment, all suppliers must disclose all products and services offered.
- Surety bond requirements specified in 42 C.F.R. 424.57(c) must be met.
- Oxygen from a state-licensed oxygen provider must be obtained.
- Ordering and referring documentation must be maintained that is consistent with provisions found in 42 C.F.R. 424.516(f).
- A supplier must never share a practice location with other Medicare suppliers and providers.
- A supplier must have hours of operation that total at least 30 hours a week. Physicians (as defined in section 1848 (j) (3) of the Act) or physical and occupational therapists or a DMEPOS supplier working with custom made orthotics and prosthetics are exempt from this requirement.
Who Are the Eligible Professionals for DMEPOS Accreditation?As defined in section 1848(k)(3)(B)), the following practitioners and professionals are eligible for DMEPOS accreditation:
- Physicians (as defined in section 1861(r) of the Act)
- Physical Therapists
- Occupational Therapists
- Qualified Speech-Language Pathologists
- Physician Assistants
- Nurse Practitioners
- Clinical Nurse Specialists
- Certified Registered Nurse Anesthetists
- Certified Nurse-Midwives
- Clinical Social Workers
- Clinical Psychologists
- Registered Dietitians
- Nutritional professionals
What does Medicare CMS 855s allow for?The CMS-855S application is used for pharmacies that want to bill for "non-accredited drugs" and/or durable medical equipment (DME).
How do I become a Medicare DME supplier?The steps include:
- Obtain a National Provider Identifier number
- Meet all DME standards
- Go through the accreditation process
- Get bonded
How do I get Medicare certified?Getting Medicare certified is a process with many steps. These steps involve understanding state requirements, meeting all CMS requirements, completing an 855A application, and more.
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Surety Bond Definition: The definition of a surety bond is as follows: A surety bond is a binding agreement between three parties. This agreement sets forth a financial guarantee by one party ( “surety” ) to another party ( “obligee” ) that a third party ( “principal” ) will fulfill required obligations to the obligee, and that state, federal, and local laws and applicable regulations will be adhered to. Let’s examine each of the three parties.Learn more about surety bonds
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