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Minnesota Medicaid DMEPOS Supplier Bond: A Comprehensive Guide

January 13, 2022

Minnesota Medicaid DMEPOS Supplier Bond

This guide provides information for insurance agents to help their customers obtain a Minnesota Medicaid DMEPOS Supplier bond

At a Glance:

  • Average Cost: Between 1% to 7.5% of the bond amount per year based on the applicant’s credit
  • Bond Amount:
    • $50,000 for initial enrollment applicants and suppliers that received $300,000 or less in Medicaid payments in the previous calendar year
    • $100,000 for suppliers that received over $300,000 in Medicaid payments in the previous calendar year
  • Who Needs it: All durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) suppliers operating in Minnesota and receiving Medicaid funds
  • Purpose: To ensure the public will receive compensation for financial harm if the DMEPOS supplier violates the statutes regulating their enrollment as a Medicaid provider
  • Who Regulates Medicaid Suppliers in Minnesota: The Minnesota Department of Human Services

Background

Minnesota statute 265B.04 requires all DMEPOS suppliers operating in the state to enroll with Minnesota Health Care Programs (MHCP). Minnesota enacted the enrollment requirement to both ensure that eligible suppliers receive compensation for services provided that are covered by Medicaid and that they do not engage in unethical business practices. To provide financial security for the enforcement of the enrollment requirements, DMEPOS suppliers must purchase and maintain a surety bond to be eligible for enrollment.

What is the Purpose of the Minnesota Medicaid DMEPOS Supplier Bond?

Minnesota requires DMEPOS suppliers to purchase a surety bond as part of the application process to enroll as a Medicaid provider. The bond ensures that the public will receive compensation for financial harm if the DMEPOS supplier violates any of the regulations outlined in Minnesota statutes 256B. Specifically, the bond protects the public if the supplier engages in any acts of fraud or fails to refund overpayments received from Medicaid funds. In short, the bond is a type of insurance that protects the public if the supplier violates the enrollment regulations.

Minnesota Medicaid DMEPOS Supplier Bond Form

Minnesota Medicaid DMEPOS Supplier Bond Form

How Can an Insurance Agent Obtain a Minnesota Medicaid DMEPOS Supplier Surety Bond?

BondExchange makes obtaining a Minnesota DMEPOS Supplier bond easy. Simply log in to your account and use our keyword search to find the “DMEPOS” bond in our database. Don’t have a login? Enroll now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone at (800) 438-1162, email, or chat from 7:30 AM to 7:00 PM EST to assist you.

At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.

Is a Credit Check Required for the Minnesota Medicaid DMEPOS Supplier Bond?

Surety companies will run a credit check on the owners of the DMEPOS supplier to determine eligibility and pricing for the Minnesota Medicaid DMEPOS Supplier 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. The credit check is a “soft hit”, meaning that the credit check will not affect the owner’s credit.

How Much Does the Minnesota Medicaid DMEPOS Supplier Bond Cost?

The Minnesota Medicaid DMEPOS Supplier bond can cost anywhere between 1% to 7.5% 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 both the $50,000 and $100,000 bond requirements.

$50,000 Medicaid DMEPOS Supplier Bond Cost

Credit Score Bond Cost (1 year)
800+ $500
625 – 799 $750
575 – 624 $1,875
550 – 574 $2,500
500 – 549 $3,750

$100,000 Medicaid DMEPOS Supplier Bond Cost

Credit Score Bond Cost (1 year)
800+ $1,000
625 – 799 $1,500
575 – 624 $3,750
550 – 574 $5,000
500 – 549 $7,500

*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.

Who is Required to Purchase the Bond?

Minnesota requires all DMEPOS suppliers to purchase a surety bond as part of the application process to enroll as a Medicaid provider. To paraphrase Minnesota statute 265B.04, a DMEPOS supplier is any medical supplier that is able to purchase durable medical equipment, prosthetics, orthotics and supplies to be sold or rented out to the general public and can perform or arrange for the repairs and maintenance of the equipment.

How Do Minnesota DMEPOS Suppliers Enroll as a Medicaid Provider?

Minnesota requires DMEPOS suppliers to enroll as Medicaid providers through the MCHP. Below are the general application guidelines, but DMEPOS suppliers should refer to the application form for details on the process.

Enrollment Period – All Minnesota DMEPOS Medicaid providers must revalidate their enrollment at least once every five years, with most revalidations occurring 3½ years apart

Step 1 – Purchase a Surety Bond

DMEPOS suppliers must purchase and maintain a surety bond with one of the following limits:

    • $50,000 for initial enrollment applicants and suppliers that received $300,000 or less in Medicaid payments in the previous calendar year
    • $100,000 for suppliers that received over $300,000 in Medicaid payments in the previous calendar year

Step 2 – Register with the MPSE Portal

DMEPOS suppliers that wish to submit their enrollment application online must register with the Minnesota Provider Screening and Enrollment (MPSE) portal. Suppliers that do not register with the MPSE will have to fax their enrollment application to MCHP.

Step 3 – Complete the Application

All Minnesota Medicaid Provider Enrollment applications can be completed online here or faxed to 651-431-7462. DMEPOS suppliers must complete the application in its entirety, and submit the following items:

After the supplier has submitted their application, the MCHP will contact them if any additional information is needed.

How Do Minnesota DMEPOS Suppliers Revalidate Their Medicaid Provider Enrollment?

The MCHP will contact the supplier with instructions on how to revalidate their Medicaid provider enrollment. All Minnesota DMEPOS Medicaid providers must revalidate their enrollment at least once every five years, with most revalidations occurring 3½ years apart.

What are the Insurance Requirements for DMEPOS Suppliers in Minnesota?

Minnesota does not require DMEPOS suppliers to obtain any form of liability insurance as a prerequisite to enrolling as a Medicaid provider. DMEPOS suppliers must purchase and maintain a surety bond with one of the following limits:

  • $50,000 for initial enrollment applicants and suppliers that received $300,000 or less in Medicaid payments in the previous calendar year
  • $100,000 for suppliers that received over $300,000 in Medicaid payments in the previous calendar year

How Do Minnesota DMEPOS Suppliers File Their Bond?

DMEPOS suppliers should fax their completed bond form, including the power of attorney, to 651-431-7462. The surety bond requires signatures from both the surety company that issues the bond and from a representative of the DMEPOS supplier. The surety company should include the following information on the bond form:

  • Legal name, address, and agency type of the entity/individual(s) buying the bond
  • Surety company’s name and state of incorporation
  • Bond amount
  • Date the bond goes into effect
  • Date the bond is signed
  • Acknowledgement of the principal and surety company

What Can Minnesota DMEPOS Suppliers Do to Avoid Claims Against Their Bond?

To avoid claims made against their bonds, DMEPOS suppliers in Minnesota must ensure that they follow all regulations outlined in Minnesota statutes 256B, including some of the most important issues below that tend to cause claims:

  • Do not engage in any acts of fraud
  • Refund all overpayments received by Medicaid

What Other Insurance Products Can Agents Offer DMEPOS Suppliers in Minnesota?

Minnesota does not require DMEPOS suppliers to purchase any form of liability insurance as a prerequisite to enrolling as a Medicaid provider. However, most reputable businesses will seek to obtain this insurance anyway. Bonds are our only business at BondExchange, so we do not issue any other types of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.

How Can Insurance Agents Prospect for Minnesota DMEPOS Supplier Customers?

Minnesota conveniently provides a public database to search for active DMEPOS suppliers in the state. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.

2022-01-21T11:58:45-05:00