Surety Bonds for Suppliers of Durable Medical Equipment, Prosthetics, Orthotics and Supplies

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 as a new applicant, adding an additional practice location, or changing the ownership of a DMEPOS supplier must submit a $50,000 surety bond to obtain Medicare billing privileges.

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 reactivation in the Medicare program.

A list of sureties from which a bond can be secured is found at the Department of the Treasury’s website. 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