DMEPOS Suppliers Must Post Surety Bond

The Centers for Medicare & Medicaid Services (CMS) issued a final regulation Dec. 29, 2008 requiring certain suppliers of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) to post a $50,000 surety bond.

New suppliers have until May 4 to meet this latest enrollment requirement. Suppliers currently enrolled in the Medicare program have until Oct. 2 to comply.

Physicians and non-physician practioners (NPPs), physical and occupational therapists, state-licensed orthotic and prosthetic personnel, and government-owned suppliers are exempt from this new regulation. Physicians and NPPs can expect CMS to implement extensive pre- and post-payment reviews of claims, more stringent claim validation efforts, and other safeguards.

In addition to the surety bond, CMS recently revoked the billing privileges of more than 1,100 medical equipment suppliers in South Florida and Southern California and suspended payments to home health agencies in the Miami-Dade, Fla. area.

“We know the majority of medical equipment suppliers and health care providers want to improve the health of Medicare beneficiaries, but we also know there are those who look for any opportunity to take advantage of beneficiaries and Medicare,” said CMS Acting Administrator Kerry Weems. “The steps we are taking today provide us with additional oversight of the suppliers who furnish medical equipment to Medicare beneficiaries and those who provide home health services in South Florida.”

The 2007 Medicare error rate report found approximately $1 billion in improper payments for medical equipment and supplies.

For more information regarding this regulation, go to the Press Releases page on the CMS Web site and click on the Dec. 29, 2008 link to “CMS Strengthens Efforts to Fight Medicare Waste, Fraud and Abuse.”

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4 Responses to “DMEPOS Suppliers Must Post Surety Bond”

  1. B W Sox says:

    Does this include ophthalmologists and optometrists who sell Medicare glasses after cataract surgery?

    Thank you.

  2. MARGE SCHMIDT says:

    WE ARE A SMALL PODIATRY PRACTICE IN PA WHO DISPENSES CAM WALKERS – ARE WE AFFECTED BY THIS BOND FEE?

  3. Beverley Hill, CPC, PMCC says:

    Physicians who dispense supplies within their “scope of practice” will not be required to have a surety bond. But if the doc owns a DME company, the rule will apply. I’ve cut out a small paragraph from the news release for you.

    “While this regulation requires most suppliers to obtain a surety bond, some companies or organizations that supply these items are exempt from the surety bond requirement, including certain physicians and non-physician practitioners, physical and occupational therapists, state-licensed orthotic and prosthetic personnel, and government-owned suppliers”

  4. David Green says:

    For DMEPOS Suppliers in Alabama, Mississippi,Tennessee and Georgia contact the agents at Yellowhammer Insurance Agency for your DMEPOS CMS bond.

    Three dates to remember:
    May 2, 2009: CMS will notify high-risk companies. They will need to obtain additional bond amounts in increments of $50,000.
    May 4, 2009: Deadline for new companies, including any changes of ownership after March 3, 2009.
    Oct 2, 2009: Deadline for existing companies to post a bond with CMS.
    This bond is required for all providers with a National Provider Identifier (NPI) number, and every NPI number will be required to have at least a $50,000 surety bond.

    There are few exceptions and it is important to determine if you qualify for an exception, like multiple locations.

    General Website: http://www.yellowhammerinsurance.com

    Bond Website: http://www.yellowhammersurety.com or call toll free (800) 594-2357.

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