Medicaid Bonds

Medicaid Bonds are mandatory bonds for some medical equipment providers and for Home Healthcare Agencies (HHA).  Medicaid bonds are compulsory for suppliers and manufacturers of durable medical equipment, prosthetics, orthotics and supplies, (DMEPOS) and hence these bonds are alternatively called DMEPOS Bonds.

The Centers for Medicare & Medicaid instituted the new bonding requirement after a ruling in January 2009 to cut down on malpractice and medical fraud.  Accordingly, all DMEPOS companies must have obtained a bond by Oct. 1, 2009.  Generally, the amount of the bond will be $50,000 and may increase, depending on the level of risk involved.  Companies with more than one location must obtain a bond for each location.

Certain classes of professionals are not required to obtain a Medicaid bond like suppliers operated by the government with a similar surety bond.  Also, private-practice or state-licensed companies making custom prosthetics and orthotics are exempted “if they are owned and operated solely by prosthetic and orthotic personnel and only billing for those supplies.”  Both physician and non-physician practitioners are exempt if the items are furnished only to their respective patients as part of the service.  In addition, physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, certified nurse-midwives, clinical social workers, clinical psychologists and registered dietitians or nutrition professionals are not required to obtain a Medicaid bond.

“Private-practice occupational and physical therapists are exempted if they are owned and operated by the therapist, the DMEPOS items are given to patients as part of professional service, and the business bills only for DMEPOS supplies.”

DMEPOS suppliers who had lost their Medicare billing privileges in the previous ten years must obtain additional $50,000 bonds.  Also those DMEPOS who had their licenses or accreditation suspended or revoked or had a felony conviction or who had been excluded from state or federal health program in the past ten years have to obtain additional $50,000 bonds.

Inside Medicaid Bonds