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Minnesota is one of a handful of states that has its own surety bonding requirement for providers of DMEPOS (Durable Medical Equipment, Prosthetics, Orthotics, and Supplies). DMEPOS items include oxygen equipment, hospital beds, canes and crutches, wheelchairs, nebulizers, CPAP machines, and so on.
Minnesota DMEPOS bonds help ensure that Minnesota DMEPOS providers abide by applicable state laws governing DMEPOS providers, specifically Chapter 256B of the Minnesota Statute. These bonds also provide financial protection for the Minnesota Department of Human Services against fraudulent billing and overcharging for DMEPOS items provided to Medicaid recipients.
To enroll as a supplier authorized to bill Medicaid for DMEPOS items provided to clients, or to renew your enrollment, you’ll need to purchase a Minnesota DMEPOS bond. A separate Minnesota DMEPOS bond is required for each NPI (National Provider Identifier) location a supplier operates. Additionally, a federal DMEPOS bond may also be required by the Centers for Medicare and Medicaid Services (CMS).
The required bond amount (the bond’s penal sum) for a new Minnesota Medicaid DMESPOS provider is $50,000. After the first year, the penal sum is based on the prior year’s revenue from Medicaid billing:
Suppliers considered “high risk” due to legal action taken against them in the 10 years prior to enrolling as a Medicaid provider must purchase an additional $50,000 in coverage for each such incident.
There are three parties to a Minnesota DMEPOS bond:
A violation of the terms of the surety bond agreement gives the obligee the right to file a claim against the principal’s Minnesota DMEPOS bond and recover the amount owed by the principal. It’s the legal responsibility of the principal to pay all valid claims against the bond. In practice, however, the surety typically pays a claim and is then repaid by the principal.
The annual premium for a Minnesota DMEPOS bond is a small percentage of the bond’s penal sum. The surety sets the premium rate on a case-by-case basis, taking into consideration certain indicators of the principal’s creditworthiness, especially the principal’s personal credit score. The better the principal’s credit, the less risk there is in paying claims on the principal’s behalf and waiting for reimbursement.
For a well-qualified principal, the premium rate for a Minnesota DMEPOS bond will be in the range of 1% to 5%. With lesser credit, it should be in the 5% to 10% range.
Request a convenient online quote today, or discuss your Minnesota DMEPOS bond needs with one of our experienced surety bond specialists.
