DMEPOS is an acronym that stands for Durable Medical Equipment, Prosthetics, Orthotics, and Supplies. DMEPOS bonds play an important role in the efforts of the Centers for Medicare and Medicaid Services (CMS) to prevent fraudulent billing by health care providers. Learn more about these bonds, and request a quote from Surety Bond Professionals today.

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What Are They?

Specifically, DMEPOS bonds protect the Medicare and Medicaid programs against financial loss stemming from the unlawful or unethical acts of DMEPOS companies. They also help to ensure that Medicare and Medicaid doctors and other health care providers are dealing with only legitimate DMEPOS suppliers.

Who Needs Them?

Before they can submit bills to Medicare or Medicaid, most DMEPOS suppliers must first purchase a DMEPOS bond in the amount of $50,000. There is an exemption for certain physical and occupational therapists in private practice that:

  • Operate as a solely-owned business
  • Do not provide DMEPOS to anyone other than their own patients
  • Bill Medicare or Medicaid only for orthotic, prosthetics, and supplies

Certain DMEPOS suppliers are required to obtain additional coverage:

  • An additional $50,000 for each additional site (with its own National Provider Identifier, or NPI) operated by the supplier
  • An additional $50,000 for each infraction committed in the preceding 10 years that resulted in license suspension, felony convictions, or loss of Medicare or Medicaid billing privileges

How Do They Work?

Unethical DMEPOS providers have a number of schemes through which they defraud Medicare and/or Medicaid to collect money they are not entitled to. Inadvertent billing errors can also result in unwarranted overpayments to a legitimate DMEPOS provider.

Any overpayment, fraudulent or not, can result in a claim being filed against the supplier’s DMEPOS bond. When that happens, the surety company that issued the bond will investigate to make sure that the claim is valid. If it is, the surety may try to iron out the problem, but failing that, the surety will most likely go ahead and pay the claim. However, the bonded individual is ultimately legally responsible for claims payments and must therefore reimburse the surety.

What Do They Cost?

The premium for a DMEPOS bond is a small percentage of the required bond amount. The surety will base the premium rate on an applicant’s personal credit score and financial situation. For applicants with good credit, the premium rate should be between 0.5% and 1.5% of the DMEPOS bond amount. Applicants with poor credit may pay a higher premium rate.

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