CMS Announces Surety Bond Requirements for DMEPOS Suppliers

On December 29, 2008, the Centers for Medicare & Medicaid Services (CMS) announced regulations requiring suppliers of certain durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) to post a surety bond as a condition of new or continued Medicare enrollment. The regulation states that beginning May 4, 2009, suppliers seeking to enroll or changing the ownership of a DMEPOS supplier must submit a $50,000 surety bond for each assigned NPI for which the DMEPOS supplier is seeking to obtain Medicare billing privileges. Existing DMEPOS suppliers must submit to the NSC a $50,000 surety bond for each assigned NPI no later than October 2, 2009.

In addition, a DMEPOS supplier enrolling a new practice location must submit to the NSC a new surety bond or an amendment or rider to the existing bond, showing the new practice location is covered by an additional base surety bond of $50,000. Suppliers who have certain adverse legal actions imposed against them in the past may be required to post a higher bond amount. The final regulations permit the NSC to require DMEPOS suppliers to obtain a base surety bond of $50,000 and an elevated surety bond of $50,000 for each occurrence of an adverse legal action within ten years preceding enrollment, revalidation, or reenrollment in the Medicare program.

The final regulations are effective March 3, 2009. Some companies or organizations that supply DMEPOS are exempt from the surety bond requirements. Such exemptions include:

  • Certain physician and non-physician practitioners
  • Physical therapists
  • Occupational therapists
  • State-licensed orthotic and prosthetic personnel
  • Government-owned suppliers

For more information, view the regulation (PDF, 242 KB) in its entirety.

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