Suppliers of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) must now secure a Medicare bond to continue participating in the Medicare program. This requirement, enforced by the Centers for Medicare & Medicaid Services (CMS), aims to protect Medicare beneficiaries and ensure that suppliers comply with regulations.
The Medicare bond requirement was established under the Balanced Budget Act of 1997. It came about due to concerns over fraudulent activities in the DMEPOS sector, which were leading to significant financial losses for Medicare and jeopardizing patient care. To combat this issue, CMS mandated that most DMEPOS suppliers post a $50,000 surety bond. This bond acts as a financial guarantee that suppliers will adhere to Medicare rules, helping to prevent fraud and allowing Medicare to recover unpaid claims or penalties if violations occur.
So, how does a Medicare bond work? It serves as a safeguard for Medicare, ensuring that if a supplier fails to meet their obligations—like paying outstanding claims—the bond will cover those losses. If CMS issues a notice, the surety is required to pay up to the full bond amount within 30 days. The bond remains effective as long as the supplier is active in the Medicare program and must be submitted with the initial application or when opening a new practice location.
Certain suppliers are exempt from this requirement, including government-operated DMEPOS suppliers that provide a comparable bond under state law, pharmacies, and some healthcare practitioners providing DMEPOS items solely to their own patients. If these exempt suppliers no longer qualify, they must obtain a Medicare bond within 60 days to stay compliant.
Each DMEPOS location must have its own National Provider Identifier (NPI) and, consequently, its own bond. For instance, if a supplier operates five locations, they would need five separate bonds unless they opt for a single bond that covers all locations.
In addition to the bond, DMEPOS suppliers can also pursue accreditation from an approved national organization. This accreditation can exempt them from routine surveys and enhance their credibility with patients.
Failing to maintain an active Medicare bond can lead to significant consequences. If a bond is canceled or lapses, CMS may revoke the supplier’s billing privileges, cutting them off from the Medicare program. To avoid this, suppliers must ensure their bond remains active and compliant with CMS rules.
Old Republic Surety offers Medicare bonds to help DMEPOS suppliers meet these requirements. They provide a straightforward application process, flexible coverage options, and competitive rates, making it easier for suppliers to stay compliant and maintain their billing privileges.
In summary, securing a Medicare bond is crucial for DMEPOS suppliers to continue providing services to Medicare beneficiaries. By partnering with a reliable surety like Old Republic Surety, suppliers can protect their business while ensuring compliance with Medicare regulations.