Everything a DME Supplier Needs

CMS requires every supplier it pays for DMEPOS to be accredited, enrolled as a DMEPOS supplier and covered by a surety bond. Enrollment is handled by the National Provider Enrollment DMEPOS East and West contractors, which took over from the National Supplier Clearinghouse in November 2022. You can apply online in PECOS or on the paper Form CMS-855S. The NPI, surety bond and accreditation come first, and the application fee is paid before the application is submitted, at initial enrollment, when you add a business location, at revalidation and at reactivation.

Each physical location you use to furnish Medicare-covered items has to be enrolled, except locations used only as warehouses or repair facilities, and CMS issues one supplier number per location. Each practice location needs its own NPI unless the business is a sole proprietorship. Changes such as ownership, adverse legal actions and practice locations must be reported within 30 days. When the contractor asks you to revalidate, you submit an updated application, and you should not submit one before you are contacted.

A DMEPOS supplier must be accredited by a CMS-approved accreditation organization to receive and keep a supplier billing number, and the accreditation must name the specific products and services it covers. Every location, owned or subcontracted, must meet the DMEPOS quality standards and be accredited separately. You must notify your accreditor when you open a new location or add a product line after enrollment, so it can survey and accredit you for it. Accreditation organizations conduct periodic, unannounced site visits. Certain supplier types are exempt from accreditation, and the CMS-855S asks you to show which exemption applies.

The surety bond is a separate requirement: $50,000 for each NPI, from a surety holding a Certificate of Authority from the U.S. Treasury. A supplier may obtain one bond that covers several NPIs or locations. CMS can require an elevated bond, adding $50,000 for each adverse legal action within the 10 years before enrollment, revalidation or reenrollment. Exceptions apply to government-operated suppliers with a comparable state bond, to physicians and nonphysician practitioners furnishing items only to their own patients as part of their professional service, and to certain solely owned orthotic and prosthetic practices and physical and occupational therapy practices. A supplier that loses its exception must submit a bond within 60 days.

Every Medicare DMEPOS supplier certifies that it meets the supplier standards in 42 CFR 424.57(c), and CMS revokes billing privileges when a supplier fails to meet them. The standards are concrete, and most site-visit problems trace back to one of them.

Medicare's own standards require a supplier to hold any state license needed to furnish its items, and to employ the licensed professional where a state requires one, unless the state allows that service to be contracted. A supplier that furnishes a drug used with equipment must be licensed by the state to dispense drugs. CMS will not award a competitive bidding contract to a supplier that does not meet the state licensure requirements in the bidding area.

Who licenses DME suppliers differs from state to state. In Colorado, a DME supplier doing business in the state must obtain a license from the Secretary of State. In Louisiana, the Board of Pharmacy issues a DME permit for providers of legend devices, which does not authorize dispensing prescription drugs. Other states use a health department, a pharmacy board or another agency, each with its own rules on who is exempt. We confirm the requirement in every state where you deliver or bill, prepare each application and track every renewal.

Under the DMEPOS Competitive Bidding Program, suppliers bid to furnish certain items in competitive bidding areas, and CMS uses the bids to set payment amounts. The program runs in rounds, with gaps between them. To win a contract, a supplier must meet the enrollment standards, be accredited, meet the state licensure requirements in the area and submit the financial documents the bid request asks for. While contracts are in effect in an area, non-contract suppliers generally cannot be paid by Medicare Part B for the competitively bid items there unless an exception applies. Physicians, treating practitioners and hospitals may furnish a short list of items, such as crutches, canes, walkers and off-the-shelf orthotics, to their own patients without bidding, and therapists in private practice may do the same for off-the-shelf orthotics.

Whether contracts are in effect, and which items, areas and dates a round covers, changes from round to round, so we check the program's current status before you plan a product line around it, and make sure your licenses, accreditation and enrollment are in order if you decide to bid.

Medicare DMEPOS claims go to one of four DME Medicare Administrative Contractors, Jurisdictions A through D, and the claim belongs to the DME MAC for the state where the beneficiary permanently lives, meaning where they reside for more than six months of the year, not where your business is. A supplier that ships nationally works with all four. Each DME MAC applies the local coverage determinations and policy articles for each product category.

Documentation decides most DME claims. A standard written order must include the beneficiary's name or Medicare number, the order date, the item description, the quantity where it applies, and the treating practitioner's name or NPI and signature; signature and date stamps are not allowed. The medical record has to support medical necessity, and supplier-prepared statements and practitioner attestations alone are not enough. Proof of delivery must show the date the beneficiary actually received the item, and shipped items need records linking your invoice to the carrier's tracking. A refill needs a documented, individualized request with the beneficiary's affirmative response before you ship, and you stop billing rentals and supplies once the item is no longer used. Keep documentation for seven years from the date of service.

CMS keeps a Master List of DMEPOS items that may require a face-to-face encounter and written order, prior authorization, or both before delivery, and a Required Prior Authorization List of the items where prior authorization is a condition of payment. Item categories on the required list have included power mobility devices, pressure reducing support surfaces, lower limb prosthetics, certain orthoses and pneumatic compression devices, and CMS adds codes over time. A claim for a listed item billed without an affirmed prior authorization request is denied.

The request has to carry the order, the relevant parts of the medical record and your own supplier documentation. We submit and track each request with the DME MAC, carry the decision onto the claim and resubmit with the missing documentation when a request is not affirmed.

A supplier that bills electronically is a HIPAA covered entity, and the Security Rule requires an accurate and thorough assessment of the risks to the electronic patient information it holds, plus a security awareness and training program for every member of the workforce. For a DME supplier that covers order intake, delivery records, the billing system and any refill outreach.

Program integrity rules sit alongside HIPAA. The supplier standards bar contracting with any entity excluded from Medicare or state health care programs and limit telephone contact with beneficiaries to the situations the rules allow. We run your risk assessment, write your privacy and security policies, train staff, collect business associate agreements and build intake and refill processes that keep the documentation and contact rules in view.