A $50,000 Durable Medical Equipment, Prosthetics, Orthotics, and Suppliers (DMEPOS) bond is required of businesses who submit bills to Medicare and Medicaid for the sale of durable medical equipment, prosthetics, orthotics and other medical supplies. The Center for Medicare & Medicaid Services requires this bond to be renewed for the life of the business license. DMEPOS bonds are commonly referred to as Medicaid or Medicare bonds and patient trust bonds. These bonds have premiums that are based on the credit of the owner, business and personal financials, and how long the business has been operating. Premiums can range from 1% to 15% of the bond penalty amount.
These bonds are required to ensure that medical suppliers, dentists, pharmacists and other businesses that submit billings to Medicaid and Medicare do not market medical equipment that is unnecessary to clients or submit fraudulent billings to Medicaid or Medicare for reimbursement.
One business may need to purchase numerous DMEPOS bonds. A $50,000 DMEPOS bond is required for each competitive bidding area (CBA) in which a business location operates. So if a business has multiple locations in different CBA’s, they will need to purchase multiple DMEPOS bonds for each location in different CBA’s. Currently there are 130 bidding areas with sixteen different product categories. Bidding for each category has an open period to bid for specific categories in certain areas. Round 2021 is currently closed.