The regulation of businesses providing Durable Medical Equipment (DME) or Home Medical Equipment (HME) is dependent upon the types of equipment, as well as the jurisdiction. Since the term DME covers a wide array of devices, from crutches to catheters to wheelchairs to blood glucose monitors, it may not always be clear for businesses whether they must be licensed in a particular state. Furthermore, additional permitting may be required for certain types of equipment (e.g., a Pharmacy License for oxygen-related devices).
DME suppliers are governed by stringent federal and state laws, particularly those that participate in the Medicare/Medicaid program. Initially, if a license is determined to be required, a DME company must obtain an “in-state” or a “resident” license. This generally requires an extensive application, varying fees, proof of insurance, and an inspection, which is usually scheduled upon approval of the application. If the company wishes to expand into another state, it must obtain an “out-of-state” or a “non-resident” license in that state. This process is more of the same, but also may require verification that the business currently holds a resident license (or proof that a license is not required) in the home state.
Medical practitioners and medical service providing organizations that want to be able to bill the Medicare system for supplying Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) need to undergo a rigorous process. The procedure is handled by the Center for Medicare and Medicaid Services (CMS). While there are exemptions, it is applicable to medical practitioners who want to act as suppliers of Since the beginning of 2019, dentists providing DMEPOS to patients are also required to undergo an accreditation process and meet relevant requirements.
DME providers include DME companies, home health agencies, physicians, and other practitioners. The fact that you are a licensed home health agency or physician/practitioner does not exempt you from DME licensure. The State Board of Pharmacy of the Department of Health generally issues licenses.
To help you understand how to become a DME supplier for Medicare, we’ve prepared this step-by-step guide. Learn the basics below.
Obtaining a National Provider Identifier Number
While this is not a part of the accreditation itself, getting a National Provider Identifier (NPI) number is necessary for meeting the DME license requirements. Existing providers typically have the number already, as it is required by the CMS and commercial healthcare insurers.
To obtain the National Provider Identifier (NPI) number, you’ll have to go through the process with the National Plan and Provider Enumeration System (NPPES). The NPI is a 10-digit number that will be used as your identification in the system for all types of administrative and billing transactions. We will discuss in detail on how to get NPI in our DME blog series.
Meeting Supplier and Quality Standards
Becoming an accredited DMEPOS supplier with the CMS entails satisfying a set of supplier standards. Prosthetics, Orthotics and Supplies standards handbook is a good starting point. The book is available as a free download on the CMS website. They are detailed in 42 Code of Federal Regulations (CFR) 424.57(c). By adhering with them, you ensure your Medicare billing privileges through the National Supplier Clearinghouse (NSC).
The first section covers the administration, financial management, human resources management, consumer services, performance management, product safety, and information management standards. The second lays out intake and assessment, delivery and set-up, training and instruction, and patient follow-up requirements.
Getting Accreditation with Approved Accreditation Organization
The accreditation process is the main answer to the question how to become a DME supplier for Medicare. You have to select one of the 10 approved by the CMS accreditation organizations and get acquainted with their procedure. Information about each agency is available on the CMS website. Regardless of which agency you choose, the licensing steps are the same. Then you have to fill in an official application with the respective organization. It will use the Quality Standards to assess your suitability and will make an unannounced on-site survey too.
The accreditation can take up to nine months from the time of your application. Once you have obtained it, you have to undergo the Medicare enrollment with the CMS. Institutional providers have to use the CMS-855A Form, while DMEPOS suppliers have to complete the CMS-855S Form. Each license is valid for three years and there are no annual fees.
Preparing for Application
During the pre-application phase, you will work with the accreditation agency to make sure your company meets CMS quality standards. Following an intensive review, the agency will determine whether you need to make changes, such as updating or creating new policies and procedures, conducting employee training or modifying existing services. After identifying and implementing any necessary changes, it’s time to submit an application containing detailed information about your business, a preliminary evidence report issued by the accreditation agency, a signed accreditation agreement and the required deposit.
While you can’t schedule a specific date for an on-site inspection, you can identify as many as 10 black-out dates. A surveyor from the accreditation agency will tour your facility and may interview one or more employees to verify the information in your application and the preliminary evidence report. The surveyor will also review employee and patient records, financial statements and billing records, service contracts, risk management standards, and your policies and procedures manual. It will take about two months from the inspection date to get your license provided all goes well.
Getting DMEPOS Surety Bond
One of the main DME accreditation costs is connected with meeting the bonding requirement set in the enrolment process. You have to provide a $50,000 surety bond to the CMS. This amount is necessary for each NPI you have and want to use. Thus, you may need a larger bond amount if you have numerous practice locations as an organizational supplier.
In order to get bonded, you have to pay a bond premium, which is a fraction of the required amount. In case your finances are in good shape, the rates are usually between 1% and 5%. This means that if you have to provide a $50,000 surety bond, your costs would be in the range of $500 to $2,500.