In addition to having a good business plan, knowing the Durable Medical Equipment (DME) industry and having valid and up-to-date industry and business specific licenses, you need to ensure everything you do is within the law where state and federal requirements dictate how you can legally operate your DME business. These rules work to ensure that only eligible providers can provide medical equipment to patients who depend on the devices for quality of life and medical support.
But whether you are considering starting a new DME company or you are looking to expand your healthcare services, it’s important to know the licensing process in order to maintain compliance and work toward your goals.
DME Accreditation
Perhaps the most critical aspect of the licensing process is DME accreditation. This is an official endorsement from a CMS-approved source saying your business is superior in safety, service, and operations practices.
Without accreditation, you cannot get reimbursed by Medicare for equipment and services. It is a necessary step for any supplier who wishes to serve patients covered by federal health care programs. When working with experts such as those at Allstate DME Consultants, the confusing process of accreditations can seem much more manageable.
What Is Durable Medical Equipment?
Durable Medical Equipment is defined as medical products that:
- Are used repeatedly
- Serve a medical purpose
- Are appropriate for home use
- Are prescribed by a physician
These may include wheelchairs, oxygen tanks, walkers, hospital beds and diabetic supplies. Due to the importance of these products with regard to patient health and safety, providers must comply with rigorous licensing and operating standards.
Federal Licensing Requirements
For your company to provide DME to Medicare patients, it must be in compliance of certain federal regulations, these include:
National Provider Identifier (NPI)
All DME providers are required to submit and obtain an NPI number. This 10-digit ID is assigned to every bill and healthcare encounter.
Medicare Enrollment
You must sign up for Medicare on Form CMS-855S. This involves reference checks, financial disclosure and adhering to supplier standards.
DMEPOS Accreditation
You must receive DMEPOS Accreditation as part of your Medicare enrollment application from a CMS-approved accrediting body (ex: ACHC, The Compliance Team, or HQAA). This step evaluates:
- Business policies
- Equipment safety
- Staff training
- Patient care standards
This is not a one-off of an intercession. Your business will still have to keep up with rules and occasionally be re-vetted.
State Licensing Requirements
And beyond federal requirements, many states have their own licensing rules. These may include:
State Board of Pharmacy Registration
Even if your business does not distribute medication, there are a few states where DME providers are required to apply for registration with the Board of Pharmacy. This guarantees oversight for those businesses that work with medical devices.
Sales Tax Permits
DME companies may be required to have a sales tax permit or resale certificate in most states to collect and file taxes owed.
Local Business Licensing
You might need a city or county business license, zoning approval or a certificate of occupancy, depending on your location.
Surety Bond
CMS and certain states mandate that DME suppliers hold a surety bond in an amount not less than $50,000. This prevents the government from being billed for something it didn’t receive.
Maintaining Compliance
Once you’re licensed and accredited, you need to stay in good standing. These are the things you will need to do regularly:
- Renew your licenses and registrations on schedule
- Update business data with CMS and state organizations
- Keep up to date with training and documentation practices
- Respond to survey and site visit findings
- Comply with HIPAA to protect patient privacy
Failure to comply may lead to fines, loss of license or Medicare billing rights, for example.
Why Work with DME Licensing Experts?
However, the licensing and accreditation process can feel overwhelming if you’re navigating it for the first time. That’s why having experienced consultants like Allstate DME Consultants can save you time in the long run.
They help you:
- Gather required documentation
- Complete forms accurately
- Avoid costly delays
- Keep up to date on regulatory changes
- Pass your site visit and audits
Your business can become licensed and serving patients sooner with professional direction.
Final Thoughts
Becoming a licensed durable medical equipment business is a multi-step process that involves both federal and state-level requirements. One of the most important aspects of DME accreditation it’s your proof that your business is fit and ready to provide safe, dependable equipment, and to bill Medicare legally.
Know what is needed, work with the proper support, and you’ll prevent a backward slide, diminish anxiety and make compliance stick for the long term. Whether you are a new DME business owner or expanding your current DME business, Allstate DME can assist you throughout the process.
