DMEPOS Competitive Bidding Bonds

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DMEPOS Competitive Bidding Bonds are required for suppliers that wish to participate in the competitive bid process for  selected Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) items. Suppliers are required to submit a bid for selected products. Not all products or items are subject to competitive bidding. Bids are submitted electronically through a web-based application process. Bids are evaluated based on the supplier’s eligibility, its financial stability and the bid price. Contracts are awarded to the Medicare suppliers who offer the best price and meet applicable quality and financial standards.

On March 7, 2019, CMS announced plans to consolidate the competitive bidding areas (CBAs) included in the Round 2 Re-compete and Round 1 2017 DMEPOS Competitive Bidding Program into a single round of competition named Round 2021. Round 2021 contracts are scheduled to become effective on January 1, 2021, and extend through December 31, 2023. In order to take part in the bidding process, DMEPOS Competitive Bidding Bonds must be in place by JULY 16, 2019. (See CMS Timeline here) The bid window opens July 16, 2019 and closes September 18, 2019 for round 2021.

The registration window opens June 10, 2019. Click here to register with CMS to be able to bid.  DMEPOS Competitive Bidding Bonds will be required to complete the registration. One bond is needed for each Competitive Bidding Area.

What do DMEPOS Competitive Bidding Bonds Guarantee?

This is a forfeiture bond. Which means that once the CBA decides the bond principal (DMEPOS supplier) has not fulfilled its obligations, the full bond amount is forfeited to the CMS.

Specifically –

If the PRINCIPAL does not accept the contract offer for a product category where the PRINCIPAL’S composite bid(s), as defined at 42 CFR §414.402, is at or below the median composite bid rate(s) for all bidding entities included in the calculation of the single payment amounts for the product category in the CBA identified above, this shall constitute an event of default.

Once a default has been declared, the surety must pay on the bond and the surety will look to the principal (DMEPOS supplier) to hold it harmless.

If the forfeiture conditions are not met (DMEPOS Supplier accepts the contract) the DMEPOS Competitive Bidding Bonds are returned to the bidding entity within 90 days of the announcement of the Round 2021 contract suppliers. The contract doesn’t start until 1/1/2021 and runs through 12/31/2023 (3 years).

What are the underwriting considerations for the DMEPOS Competitive Bidding Bonds? 

If a closely held company, the surety will require personal guarantees of the owners and the owners will have to have excellent credit to obtain a preferred rate. The surety companies will require Business and personal financial statements in addition to an application.

How do I apply for the bond? 

Surety Solutions Insurance Service’s Inc. (Surety1)makes it easy to apply. Simply click here to access our easy to navigate, online application. You will have the opportunity to upload business and personal financial statements or they can be sent separately. Once the application is received you will be contacted by one of our friendly and knowledgeable agents within one business day.

Surety Solutions has been providing surety bonds nationwide since 2003. The company maintains an A+ rating from the Better Business Bureau and is licensed in all 50 states. All of our markets are Companies Holding Certificates of Authority as Acceptable Sureties on Federal Bonds. This is a requirement for all DMEPOS Competitive Bidding Bonds.