Effective May 4th, 2009, the U.S. Department of Health and Human Services (DHHS), Medicaid and Medicare Services instituted new protocols for obtaining billing privileges which included a DMEPOS surety bond. Pursuant to federal code §424.58, a DMEPOS supplier means a supplier of durable medical equipment, prosthetics, orthotics and the like, that has been accredited by a recognized independent accreditation organization approved by the DHHS. Those suppliers that do not provide a DMEPOS bond cannot achieve approval and cannot receive Medicare Part B billing authorization.

Subsection (ii) of the Federal Code states that, a supplier that seeks to become an enrolled DMEPOS supplier through a purchase or transfer of assets or ownership interest or by formation of a new entity must submit a surety bond from a surety company approved by the U.S. Treasury in the amount of of $50,000 and if required by the National Supplier Clearinghouse (NSC) an elevated bond amount. A supplier enrolling a NEW office location must a new DMEPOS surety bond or a rider to the existing bond in an additional $50,000. The issuance of a “National Provider Identifier (NPI)” is the trigger for increased bond requirements. For example, $50,000 is required for each NPI/practice location except for sole-proprietorships, so as supplier with five locations would necessarily provide a $250,000 surety bond or five $50,000 bonds. The bond must be written as a continuous obligation and on its face reflect the requirements of the Code. The surety bond must guarantee that the surety will, within thirty days of receiving written notice from the CMS containing sufficient evidence to establish the surety’s liability for unpaid claims, CMPs, or assessments, pay the CMS a total of up to the face amount of the bond in the following amounts:
(A) The amount of any unpaid claim, plus accrued interest, for which the DMEPOS supplier is responsible.
(B) The amount of any unpaid claims, CMPs, or assessments imposed by CMS or OIG on the DMEPOS supplier, plus accrued interest.

The DMEPOS supplier may cancel the bond by providing written notice of at least 30 days before the effective date of the cancellation to the NSC. Likewise the surety may notice cancellation by written notification. The supplier’s privilege is revoked upon notice until new financial assurance is provided. The original surety CONTINUES to be responsible for claims incurred until such replacment security is received. The CMS or any contractor of the CMS may claim agains the DMEPOS surety bond. A supplier that obtains a replacement surety bond from a different surety to cover the remaining term of a previously obtained bond must submit the new surety bond to the NSC at least 30 days prior to the expiration of the previous DMEPOS bond. There can be no gap in the coverage of the bonded periods. If a gap in coverage exists, the NSC will not pay for any items or services provided by the supplier during that period. If a replacment bond is posted during the term of the original bond, then the new surety is liable for any overpayments, CMPs, or assessments incurred by the supplier beginning with the effective date of the new DMEPOS surety bond. Subsection (15) of the Code does allow an exemption of the federal requirement if the supplier is licensed under a state statute and provides a sufficiently similar bond to that respective state OR if the provide meets certain criteria as a physician or occupational therapist.

Surety bond leader, Surety One, Inc. offers immediate approval of your DMEPOS bond request. Our special programs afford each applicant bonding capacity regardless of credit and/or financial condition. Operating in multiple states or multiple locations? No problem! We offer surety bonds in all states and offer fidelity bond coverages for this class of business. Visit us at SuretyOne.com, call (800) 373-2804, or email us at Underwriting@SuretyOne.com for a DMEPOS bond application or for information on any surety need.

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