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The Centers for Medicare and Medicaid Services (CMS) oversees both the Medicare and Medicaid programs at the federal level. It has implemented certain measures to prevent fraudulent billing by providers of DMEPOS (Durable Medical Equipment, Prosthetics, Orthotics, and Supplies). Items that fall into this category include oxygen concentrators, hospital beds, wheelchairs, nebulizers, CPAP machines, canes and crutches, and more.
While DMEPOS suppliers bill CMS for DMPOS items provided to their Medicare clients, for DMPOS items provided to Medicaid clients, they bill the government agency that regulates Medicaid in their particular state. In either case, a Michigan DMEPOS bond serves as the supplier�s pledge to abide by all applicable laws and regulations in their dealings with Medicare and Medicaid clients and billing for the DMEPOS items they provide those clients.
A Michigan DMEPOS bond also ensures that funds will be available to pay claims filed against the bond. A claim may be filed to recover damages stemming from fraudulent billing or overcharging for items provided to Medicare and Medicaid clients.
Every new Michigan DMEPOS supplier must register with CMS and obtain a National Provider Identification (NPI) number for each location that it operates.
To become accredited to bill CMS, a DMEPOS supplier must purchase a separate $50,000 Michigan DMEPOS bond for each NPI.�?It’s is possible, under certain circumstances, to get permission from CMS to combine coverage for multiple NPI locations under one bond in an amount equal to what the supplier would have paid in total for separate bonds.
Any DMEPOS supplier who has committed an infraction in the preceding decade and been convicted of a felony, had their license suspended, or lost their Medicare and/or Medicaid billing privileges must purchase an additional $50,000 in Michigan DMEPOS bond coverage.
Certain physical and occupational therapists in private practice are exempt from the bonding requirement.
There are three parties to the surety bond agreement for a Michigan DMEPOS bond:
The surety bond agreement legally obligates the principal to pay all valid claims against the bond.�?However, in practice, the surety first makes sure a claim is valid, pays the claimant on behalf of the principal, and then is repaid by the principal. This ensures quick payment of claims while giving the principal a little time to gather the funds to reimburse the surety.
The annual premium for a Michigan DMEPOS bond is determined by multiplying the required bond amount by the principal�s premium rate. The premium rate is assigned by the surety�s underwriters after careful consideration of the principal�s creditworthiness. That premium rate reflects the degree of risk the surety is assuming in agreeing to extend credit to the principal by paying claims and waiting for reimbursement.
With excellent credit, the premium rate for a Michigan DMEPOS bond could be as low as 1%. With poor credit, it could be as high as 15%.
Request a convenient online quote today, or discuss your Michigan DMEPOS bond needs with one of our experienced surety bond specialists.
