Medicaid Surety Bond

A Medicaid surety bond is a license and permit surety bond required by the Centers for Medicare & Medicaid Services (CMS)  for all suppliers of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS).  Suppliers generally will be required to post a $50,000 medicaid surety bond.  Separate medicaid surety bonds are required for each National Provider Identifier (NPI) obtained for DMEPOS billing purposes.

Medicaid bonds may also be referred to as Medicare surety bonds, CMS surety bonds, DMEPOS surety bonds, Durable Medical Equipment surety bonds, Pharmacy surety bonds or Centers for Medicare and Medicaid Services surety bonds.

The purposes of the medicaid surety bond are to:

  • limit the Medicare program risk to fraudulent suppliers
  • enhance the legitimacy of the Medicare enrollment process and current suppliers
  • ensure the Medicare program is indemnified for erroneous payments resulting from fraudulent or abusive supplier billing practices
  • ensure Medicare beneficiaries receive reasonable products and services from legitimate suppliers

The medicaid surety bond requirement became a final rule in the Federal Register on January 2, 2009. Certain suppliers may be exempt from the new requirement.