What is Durable Medical Equipment Suppliers Bond?
A Durable Medical Equipment Suppliers Bond is a type of security that an organization or individual may require before entering into a business transaction with them.
The purpose of the Durable Medical Equipment Suppliers Bond is to ensure that in case there are any disputes or grievances about money, goods, etc., between the two parties, they will be able to use this bond as compensation for any loss sustained by either party due to dishonest acts on part of one another.
The bond comes into play when there are claims made because it provides protection against fraud and suspected fraud. This way, both parties are protected from each other zesty without having to resort to legal proceedings. It is quite an like insurance, but here the compensation is made available even before any legal claims are brought up in court.
Why Do You Need a DMEPOS Bond?
Since Durable Medical Equipment Suppliers Bonds are for use in case of disputes and grievances, you require one if:
You have a business transaction that requires security from your partner. You need to comply with state or federal laws that require DMEPOS Bond. You want to register with the government as an organization selling durable medical equipment.
In the first two scenarios, when you have made a deal with someone but there is no security, they can still contest your claim later on by saying it was never a legitimate agreement due to a lack of guarantees or agreements in place. In case you do not have a bond, you will have very little legal ground to stand on in such situations. And even worse, without being able to provide any proof, you could risk losing your reputation as an organization.
A DMEPOS Bond helps you settle financial disputes between the two parties in a smooth way without taking legal action or resorting to courts, saving both time and money. You can either file for arbitration where both parties agree to take their dispute before one or more trained individuals instead of taking up the case in court.
Or if there is no agreement on arbitration, you can go for mediation which is much like arbitration but conducted by professionals instead of volunteers. Both these processes are quick and efficient since they require less paperwork than litigation would; therefore it saves your time and resources that you could use for other business matters.
What are the requirements when getting a DMEPOS Bond?
Whether you are a Durable Medical Equipment Supplier, Pharmacy or Supplies, you may be asked to provide proof of your business with a bond. You will be required to have a valid license before being allowed to apply for the DMEPOS Bond. To check whether your state requires licensing from providers in the durable medical equipment supply industry, check this list from CMS.gov.
In addition to that, DMEPOS suppliers must comply with federal laws including the Health Insurance Portability and Accountability Act (HIPAA), Privacy Rule, Stark Law, and Anti-Kickback Statute when dealing with patients and insurance providers.
Getting a Durable Medical Equipment Suppliers Bond can help protect both parties against frauds committed by either of them. It is necessary to prove authenticity and credibility in this line of business, wherein people do get cheated every day by unlicensed providers for health care products that they may not even need.
A DMEPOS Bond will help you arrive at an agreement faster than through courts or lawyers, saving both parties time and money while keeping their dignity intact.
How to Get a DMEPOS Surety Bond?
To get a DMEPOS Bond, you need to:
Fill out and submit an application. Your application should include information about your business and yourself. Pay the premium fee which would usually depend on the bond amount applied for; it can be anywhere from $500 up to $50,000 or more. Provide required documents such as articles of incorporation, certificate of formation (for LLCs), license, lease agreement (if applicable), and tax ID number (EIN).
The premium you pay for this bond is based on two main factors – your net worth and how many employees you have in your company. The higher these numbers are, the more expensive your bond will be. This is because a greater financial responsibility is being assumed in the case of a high net worth or large number of employees.
Your premium amount will also vary based on where you live in. This is because different states have adopted various rules when it comes to DMEPOS suppliers by requiring varying levels of bonding, at fault law, and caps on their liability. Some states permit up to $50,000 in liability while some cap the bond at only $5000.
Usually, there are no restrictions when it comes to using an insurance agency for your DMEPOS Surety Bond. You can use any insurance company even if they are not licensed in your state as long as they are able to provide you with a surety bond worded according to your state’s requirements.