What is the purpose of an insurance bond?
An insurance bond is not meant to pay for claims. It is meant to provide a financial guarantee that the person or entity purchasing the bond (the principal) will reimburse the obligee should the principal default, fail to fulfill its obligations, or a claim is made.
What is a DME bond?
A Durable Medical Equipment (DME) surety bond is required of suppliers of durable medical equipment who accept Medicare or Medicaid payments for DMEPOS products in order to help protect against billing fraud & abuse. The most common DME surety bond is required by the Centers for Medicare & Medicaid Services (CMS).
What is the difference between a bond and a surety?
The difference between bail and surety bonds is that bail involving cash bonds only require the involvement of two parties—the defendant and the court. Surety bonds however, require the involvement of three parties in the bailing process—the court, the defendant and the bail agent.
Is bond the same as insurance?
Surety bonds protect the financial interests of the consumer, whereas general liability bonds protect the company from having to pay a lawsuit out of pocket. Insurance protects the business itself from losses, whereas bonds protect the person the company is working for.
Is bond different than insurance?
Who is protected with a surety bond vs insurance? Insurance protects the business owner, home owner, professional, and more from financial loss when a claim occurs. Surety bonds protect the obligee who contracted with the principal to perform specific work on a project by reimbursing them when a claim occurs.
Is a bond considered insurance?
The surety bond covers the municipality against financial harm, but it is not insurance. If a subcontract issues a claim against that payment bond, the contractor who purchased the bond must repay the surety for any damages paid out.
What is a Medicare Bond & Medicaid Bond?
You need to obtain a bond to protect against Medicare/Medicaid fraud and abuse. If you do not follow the rules set by the Centers for Medicare & Medicaid Services (CMS), a claim can be filed on your bond.
What Do Medicare Bond & Medicaid Bonds Cost?
These bonds generally cost between 1-15% of the requirement bond amount. The percentage you must pay is based on your financial strength, e.g. personal credit, business financials, etc. You you're ready for a quote, can get a free quote on your bond now. You can also take a look at the most frequent surety bond related questions here.
What bond do you need to bill Medicare?
Most suppliers of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) must file a $50,000 surety bond before they can bill Medicare. Because DMEPOS bonds are required by CMS, they are also known as “Medicare Bonds” or “Medicaid Bonds.”.
How much bond does a DMEPOS supplier have to maintain?
Since bond costs are calculated as a percentage of the bond amount, high premiums will cost more. DMEPOS suppliers must maintain $50,000 of coverage for each National Provider Identifier (NPI) they operate. This means if a DMEPOS supplier manages five NPI locations, they would have to obtain a $250,000 bond.
Can DMEPOS be exempt from Medicare?
Permit only legitimate D MEPOS suppliers to enroll and participate in the Medicare program to hinder Medicare fraud. Guarantee that the Medicare program is reimbursed for any losses resulting from illegal business practices. Some suppliers can be exempted from the DMEPOS bond requirement.
What is a DMEPOS surety bond?
A DMEPOS surety bond is also known as a Medicare surety bond. The acronym stands for “durable medical equipment, prosthetics, orthotics and supplies”. These are types of equipment that patients need at home due to certain medical conditions.
What happens if a surety bond is cancelled?
Once a surety bond is cancelled (or if there’s a lapse in bond coverage), the DMEPOS supplier’s Medicare billing privileges will be revoked unless a new surety bond with the required bond amount is submitted.
What happens if the principal violates the conditions of the bond?
If the Principal violates the conditions of the bond, the CMS will send a written notice to the Surety. The notice must contain sufficient evidence regarding the Principal’s violation. The Surety will conduct a separate investigation of the claim.
Does Medicare cover DME?
Medicare covers Durable Medical Equipment (DME) that has the following factors: Is durable – can withstand repeated use. Serves a medical purpose. Is appropriate for use in the home and can also be used outside of the patient’s home. Likely to last for three or more years.
Find Your Surety Bond
We offer all types of surety bonds in all 50 states. If you can't find your bond in the table below, select "General business license or permit bond (not listed otherwise)" and start your application.
About Us
Lance Surety Bond Associates, Inc. is a Pennsylvania-based surety bond agency that offers bonding at competitive rates in all 50 states. Established in 2010, our company has grown to become one of the top online bond producers in the country.
What Our Clients Have To Say?
In speaking with Jessica Hedrican, she totally understood my situation and guided me thru the process. I had some questions and she quickly got them addressed. Made entire process enjoyable. KUDOS
At a Glance
Average Cost: Between 0.5% to 5% of the bond amount per year based on the applicant’s credit
Background
Federal statute 424.57 requires all DMEPOS suppliers that bill Medicare for services to enroll with CMS. Congress enacted the enrollment requirement to ensure that eligible suppliers receive compensation for services that are covered under Medicare.
What is the Purpose of the DMEPOS Medicare Program Bond?
CMS requires DMEPOS suppliers to purchase a surety bond as part of the application process to enroll in the Medicare program. The bond ensures that CMS will receive compensation for financial harm if the supplier fails to abide by the regulations set forth in federal statute 424.57.
How Can an Insurance Agent Obtain a DMEPOS Medicare Program Surety Bond?
BondExchange makes obtaining a DMEPOS Medicare Program bond easy. Simply log in to your account and use our keyword search to find the “Medicare” bond in our database. Don’t have a login? Enroll now and let us help you satisfy your customers’ needs.
How is the Bond Amount Determined?
Federal statute 424.57 requires DMEPOS to purchase a $50,000 surety bond per National Provider Identification (NPI) registered to bill Medicare. However, the statute also dictates that suppliers must purchase an additional $50,000 surety bond for every adverse legal action that has occurred within the past 10 years.
Is a Credit Check Required for the DMEPOS Medicare Program Bond?
Surety companies will run a credit check on the owners of the Medicare Supplier to determine eligibility and pricing for the DMEPOS Medicare Program bond. Owners with excellent credit and work experience can expect to receive the best rates. Owners with poor credit may be declined by some surety companies or pay higher rates.
How Much Does the Medicare Program Bond Cost?
The Medicare Program bond can cost anywhere between 0.5% to 5% of the bond amount per year. Insurance companies determine the rate based on a number of factors including your customer’s credit score and experience. The chart below offers a quick reference for the bond cost on a $50,000 bond requirement.
