CMS Announces Final Rule Regarding Surety Bond Requirement for DMEPOS Suppliers

In an effort to prevent Medicare program risk from fraudulent suppliers and ensure only legitimate Medicare suppliers provide items to Medicare beneficiaries, CMS now requires all DMEPOS suppliers (unless exempt) to secure a $50,000 surety bond for each National Provider Identifier (NPI). Suppliers with multiple locations may obtain a single bond covering all locations, provided the base amount of $50,000 per site is maintained.

Physicians are exempted from this requirement if the items are furnished only to the physician’s own patients as a part of his or her physician services. This includes optical dispensaries owned by ophthalmologists and optometrists.

Note that states vary in their definition of doctor-patient relationships and you may need to check your state law to see if such a definition is broad enough to allow you to provide these services or you can contact a local attorney

IMPORTANT: You are not exempt if you accept walk-in customers and/or fill glasses prescriptions from outside doctors.

If you are not exempt, you must submit a copy of the required surety bond to the National Supplier Clearinghouse (NSC) no later than October 2, 2009. Failure to do so will result in the revocation of the supplier’s billing privileges. If you are a new supplier or if you add a new location, you must have a surety bond in place at the time you apply to the NSC for a provider number.

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