How to start a DME business that bills Medicare takes five steps: get accredited unless exempt, obtain an NPI, enroll as a DMEPOS supplier in PECOS, post a $50,000 surety bond, and hold the state licenses your products require. Then set up billing so every claim has an order and proof of delivery.
This guide replaces an older start-up checklist. It keeps the questions new owners ask about business model, location and licenses, and adds the Medicare steps that decide whether you get paid: accreditation, enrollment, the surety bond and the supplier standards.
It is written for people opening a DME supplier, not for patients. Each rule is tied to a CMS, eCFR or Federal Register source.
Key takeaways
- Medicare DMEPOS enrollment is processed by the NPE DMEPOS East and West contractors, not the DME MACs or the old National Supplier Clearinghouse.
- Accreditation comes before the application unless you are exempt, and must be renewed at least every 12 months.
- The base surety bond is $50,000 per NPI and liability insurance must be at least $300,000, both kept without a gap.
- State licenses are separate from CMS enrollment and depend on your state and products.
- Set up order, delivery and proof-of-delivery records before the first claim.
What does it take to start a DME business that bills Medicare?
Five things stand between an idea and your first paid Medicare claim: accreditation (unless exempt), an NPI, a supplier enrollment application, a surety bond and the state licenses your products require. Then comes a billing set-up that can prove every claim.
Location, staff and trends matter, but they do not decide whether Medicare pays you. The rules below do. They come from CMS’s Enroll as a DMEPOS Supplier page (last modified June 3, 2026), the supplier standards in 42 CFR 424.57 and CMS’s December 2025 DMEPOS Basics fact sheet.
DMEPOS means durable medical equipment, prosthetics, orthotics and supplies. This guide is about suppliers who bill Medicare for those items through a DME MAC.
One point trips up many new owners. Medicare DMEPOS enrollment is not handled by the DME MACs. CMS says that since November 7, 2022, the National Provider Enrollment (NPE) DMEPOS East and West contractors process all DMEPOS enrollment applications, and the National Supplier Clearinghouse no longer does.
Should you open a storefront, sell online or do both?
Choose the model after you read the supplier standards, not before, because Medicare enrollment sets rules for premises, hours and phones.
A storefront gives patients and referral sources a place to see products. An online or mail-based model can reach a wider area. A hybrid combines them. For a Medicare supplier, the practice location rules in 42 CFR 424.57 apply: a publicly accessible location, posted hours, a business phone and records space. Ask the NPE contractor and your adviser how an online-only or mail-based model fits those rules before you sign a lease or build a website.
Location still matters. Being near clinics, hospitals and rehabilitation centers helps referrals, and easy access matters for older customers. Match your product list to what you will be accredited for.
If you are unsure which products count as DME and which are home medical equipment sold for cash, read our HME vs DME billing guide before you build the product list.
What are the steps to enroll as a Medicare DMEPOS supplier?
CMS lists six steps: get accredited, get an NPI, apply through PECOS with the EFT form, pay the application fee, track your application with the enrollment contractor and post a surety bond. Order matters in one place: CMS says accreditation comes before you submit the enrollment application, unless you are exempt.
| Step | What CMS says | What to prepare |
|---|---|---|
| 1. Accreditation | A CMS-approved accreditation organization checks you against the DMEPOS Quality Standards and makes unannounced site visits. Certain professionals are exempt. | Pick an accreditor, list every product category you will supply, build policies and a compliant location. |
| 2. NPI | Get an NPI for each practice location through NPPES, unless you already have one. | Create the NPPES record for each location with exact legal name and address. |
| 3. Application and EFT form | Apply in PECOS (or on paper with the CMS-855S) and complete the CMS-588 EFT agreement. | Ownership details, location, accreditation, insurance and bond information, banking details. |
| 4. Application fee | Pay the Medicare application fee through the PECOS fee payment page. | Confirm the amount at the time you apply (see the cost section). |
| 5. Contractor review | Check status with your enrollment contractor: the NPE DMEPOS East or West contractor. | Answer requests quickly; expect questions on licenses and premises. |
| 6. Surety bond | Post a $50,000 bond for each NPI, from a company on the U.S. Treasury’s certified list. | Get quotes from certified sureties; ask when the bond must be on file. |
Source: CMS, Enroll as a DMEPOS Supplier (page last modified June 3, 2026); CMS MLN905710 (December 2025).
Each practice location is enrolled separately, per CMS’s fact sheet, so a second branch needs its own NPI, accreditation, bond and licenses.
Do you need DMEPOS accreditation, and who is exempt?
Most new suppliers do. CMS’s MLN fact sheet says to get accredited by a CMS-approved accreditation organization before submitting the enrollment application, unless you are exempt, and Medicare denies claims from suppliers that are not accredited. The accreditation must list the specific products and services you supply.
The process has three parts: pre-application, application and an unannounced on-site survey. Two recent changes affect planning. From January 1, 2026, a new location must be surveyed before accreditation, where it used to operate up to three months before the site visit. And reaccreditation is required at least every 12 months, down from every three years.
Exemptions exist. The fact sheet names 14 types of eligible professionals, including physicians, nurse practitioners, physical therapists and registered dietitians. It also names opticians, orthotists and prosthetists, plus certain products such as DME inhalation drugs. Pharmacies may apply for an exemption by attestation. If you think you qualify, confirm with the NPE contractor before skipping accreditation; do not assume.
Disclose all products and services at enrollment, and notify the accreditor when you add a product category.
What do the surety bond and liability insurance require?
The base surety bond is $50,000 for each NPI, and you must also carry comprehensive liability insurance of at least $300,000. Both are set in 42 CFR 424.57, and both must stay in place without a gap.
A bond is not the same as a cash deposit. The $50,000 is the bond’s face amount. What you pay is a premium to a surety company, and that cost depends on the surety’s underwriting, so get quotes from companies on the Treasury list. The contractor can also require a higher amount: an additional $50,000 for each adverse legal action in the 10 years before enrollment, revalidation or re-enrollment.
Keep the bond continuous. The surety must give at least 30 days’ written notice before canceling. A lapse leads to revocation, and Medicare does not pay for items furnished during the gap. Liability insurance works the same way: a lapse results in revocation retroactive to the date coverage ended.
Confirm the bond terms on the day you apply, because rules can be amended.
What state licenses does a DME business need?
There is no single national DME license. Medicare requires that where a state licenses an item or service, you must hold that license, and CMS can deny or revoke enrollment for not being properly licensed. Which licenses apply depends on your state and your product list.
- Business registration and tax permits. A general business license and, where you collect it, a sales tax permit come from your state, county or city. These came from the old checklist and still apply.
- State DME or pharmacy-type licensure. Some states license DME suppliers, and some license by product. Ask the state health department and board of pharmacy, and read the licensing rules for each product line.
- Oxygen. Where a state requires oxygen licensure, 42 CFR 424.57 requires you to obtain oxygen from a state-licensed oxygen supplier.
- Contracted services. You may contract with a licensed party for a licensed service unless state law prohibits it.
List every product you plan to carry, then ask your state agencies in writing what each requires, and keep the replies on file.
Buying an existing DME store?
Accreditation and enrollment do not simply transfer. CMS’s fact sheet says accreditation does not transfer automatically after a merger, acquisition or sale. A change in majority ownership by sale within 36 months of initial enrollment or the last ownership change means the new owner must enroll as a new supplier and get new accreditation, with listed exceptions such as internal corporate restructuring. Have an adviser review the deal before you sign.
Which supplier standards shape your premises and daily operations?
The supplier standards in 42 CFR 424.57(c) apply every day, not only at enrollment. Several affect how you set up the space, the phone and the paperwork. Exceptions and phase-in dates exist, so read the regulation for your case.
- Practice location. At least 200 square feet, accessible to the public, not gated or restricted, with a permanent visible sign and posted hours. There are exceptions, including some for orthotic and prosthetic personnel.
- Open hours. Open to the public at least 30 hours a week, with exceptions.
- Phone. A primary business telephone at the site. A cell phone, pager, answering machine, answering service or fax cannot be the only primary line during posted hours.
- Records space. Room to keep business records and ordering and referring documentation.
- Inspections. You must allow on-site inspections by CMS, its contractors or agents.
- Complaints. A complaint protocol, and a record of each written and oral complaint with the actions taken.
- Delivery. You are responsible for delivery, must keep proof of delivery and must document that you gave safe-use instructions.
- Rentals, warranties and disclosure. Maintain rented items, honor state warranties, and give each beneficiary the supplier standards.
- Changes. Report application changes to CMS within 30 days.
“Treat enrollment and billing set-up as one project. The order and delivery records that support the first claim are the same records a reviewer will ask for months later.”
What does it cost to start a DME business?
Some costs are fixed by rule, and most are not. The earlier version of this post showed a sample budget and projected profit. Those figures were invented and are removed, because costs and sales vary by market, product mix and payer.
| Item | What the rule sets | What you must find out |
|---|---|---|
| Medicare application fee | $750 for applications submitted from January 1 to December 31, 2026, for the group the notice defines as institutional providers, which includes CMS-855S filers. | Confirm the amount at the PECOS fee page when you apply. |
| Surety bond | $50,000 face amount per NPI, plus up to $50,000 more per adverse legal action in the prior 10 years. | The premium a Treasury-listed surety charges you. |
| Liability insurance | At least $300,000 comprehensive liability coverage. | Premium quotes for your location and products. |
| Accreditation | Required unless exempt; reaccreditation at least every 12 months. | Each accreditor’s fee schedule and survey costs. |
| State licenses and permits | Required where the state requires them. | Fees and renewal dates by state, county and city. |
| Location, inventory, staff, marketing | Not set by CMS beyond the premises standards. | Your own lease, product, payroll and marketing plan. |
Source: Federal Register (December 3, 2025) for the 2026 fee; 42 CFR 424.57 (eCFR); CMS, Enroll as a DMEPOS Supplier (June 2026).
The fee notice defines institutional providers by the form filed, including the CMS-855S, but does not name DMEPOS suppliers directly. Treat $750 as the expected 2026 amount and confirm it in PECOS. Build the plan from quotes, not rules of thumb, and use our revenue calculator to test how open claims affect cash.
How do you set up billing before the first claim?
Set up billing while you wait for enrollment. A claim is only as strong as the order, delivery record and notes behind it.
Know where claims go
Claims for non-implantable DMEPOS used at home go to the DME MAC. CMS’s claims processing transmittal (June 2021) says the filing jurisdiction depends on the supplier’s location, and payment is based on the fee schedule for the beneficiary’s state of permanent residence. Implanted DME generally goes to the A/B MAC. Confirm your jurisdiction with the DME MAC that serves your state.
Build the order and documentation workflow
For items on CMS’s required list, a face-to-face encounter and a written order prior to delivery are conditions of payment. The treating practitioner must have the encounter within the six months before the order, and the written order must be communicated to the supplier before delivery. In its January 17, 2023 notice CMS listed 63 codes (46 power mobility device K-codes, 7 existing codes and 10 added effective April 17, 2023). The list changes, so check the current list before launch.
The supplier standards also require you to keep ordering and referring documentation and proof of delivery. CMS may ask for records to support medical necessity, so file them where you can retrieve them.
Choose codes, modifiers and rental rules
Rented equipment follows month-by-month rules. Read our guide to DME billing modifiers and DME coding guide for HCPCS, modifiers and ICD-10 before you build charge templates, and our DME billing best practices for the compliance side.
Check competitive bidding for your products
Bidding status changes, so read our Medicare DMEPOS competitive bidding guide before you commit to a product line.
Decide who bills
Some owners bill in-house and others hand it to a partner. If you are weighing that, our pros and cons of outsourcing DME billing compares the models, and our medical billing services page shows what we offer. Payers beyond Medicare, such as Medicaid and commercial plans, have their own enrollment, so ask each what it needs. Our credentialing services cover payer enrollment support.
A system that tracks each claim by stage helps a small team. A practice management system that tracks claims by stage assigns an owner to each claim and checks claim data for completeness before submission. It is a claims system, not an EHR.
Want a second pair of eyes on your billing set-up?
Our free practice audit reviews your claim workflow so you can see where documents and denials may stall before you launch.
What deadlines keep your enrollment active?
Enrollment is not a one-time task. Missing a deadline can end your billing privileges. Put each of these on a calendar with an owner.
| Requirement | How often or when | If you miss it |
|---|---|---|
| Report changes (ownership, adverse legal actions, location, accreditation) | Within 30 days | Billing privileges may be revoked. |
| Reaccreditation and resurvey | At least every 12 months | Claims are denied if you are not accredited. |
| Revalidation | Every 3 years after billing privileges are first granted | Ask the contractor what happens and confirm your due date. |
| Surety bond | Continuous; 30 days’ written notice before cancellation | Revocation, and no payment for items furnished during a gap. |
| Liability insurance | Continuous, at least $300,000 | Revocation retroactive to the date of the lapse. |
| New product lines | Notify the accreditor before adding | Possible re-survey by the accreditor. |
Source: 42 CFR 424.57 (eCFR); CMS MLN905710 (December 2025); CMS, Enroll as a DMEPOS Supplier (June 2026).
A practice that adds a supply line faces the same questions. See our specialty billing pages for specialty-specific billing, and treat supplies as a separate enrollment from the practice’s own.
Our recommendations
- Read the supplier standards before you sign a lease. Check the premises, hours and phone rules in 42 CFR 424.57 against your planned space and model.
- Start accreditation early. Accreditation comes before the enrollment application unless you are exempt. Choose an accreditor and list every product line first.
- Put every deadline on one calendar. Track the 30-day reporting rule, the 12-month reaccreditation, the 3-year revalidation, the bond and the insurance, each with one named owner.
- Ask each state agency in writing. For every product you plan to carry, ask what license applies and keep the reply on file with your accreditation records.
- Test billing on paper before the first claim. Run three sample patients from order to payment and confirm each has the order, delivery proof and notes a reviewer would ask for.
- Do not budget from rules of thumb. Use real quotes for the bond, insurance and accreditation.
A claims system built for small DME teams.
RCM Finder's portal tracks each claim by stage with an owner and checks claim data for completeness before submission. It is a claims system, not an EHR.
See how the RCM Finder portal works · Create a portal account
Disclosure: RCM Finder builds and sells this portal. It is a practice management system, not an EHR.
Bottom line
Starting a DME business is mostly a sequencing problem: accreditation, enrollment, bond, insurance and state licenses first, then a billing process that can prove each claim. If you want help with payer enrollment, our credentialing services are one place to start, and the contact page is the quickest way to ask a question. For a review of your planned billing workflow, ask for a free practice audit.
Frequently asked questions
Do I need a license to sell durable medical equipment?
It depends on your state and your products. Medicare requires that where a state licenses an item or service, you must hold the license. You also need ordinary business registration and any tax permits. Ask your state health department and board of pharmacy what applies to each product line, and keep the replies in writing.
How much is the DMEPOS surety bond?
The base amount is $50,000 for each NPI, from a company on the U.S. Treasury’s certified list. That is the face amount, not what you pay; you pay a premium set by the surety. The contractor can require an extra $50,000 per adverse legal action in the prior 10 years. Confirm current terms with CMS before you apply.
Who processes DMEPOS enrollment applications?
The National Provider Enrollment DMEPOS East and West contractors process them. CMS says the National Supplier Clearinghouse stopped processing DMEPOS applications on November 7, 2022. DME MACs do not handle enrollment; they process claims. You apply through PECOS, or on paper with the CMS-855S if you cannot apply online.
Is accreditation required for every DME supplier?
Not for everyone. Most Medicare DMEPOS suppliers must be accredited by a CMS-approved organization before applying. CMS’s fact sheet lists exempt groups, including 14 types of eligible professionals, opticians, orthotists and prosthetists, and lets pharmacies apply by attestation. Confirm your status with the enrollment contractor before skipping it.
How often must a DME supplier renew its Medicare enrollment?
Revalidation is due every three years after billing privileges are first granted, per 42 CFR 424.57. Separately, accredited suppliers must be resurveyed and reaccredited at least every 12 months, and you must report changes to CMS within 30 days. Use a calendar with owners for each.
Can I run a DME business online only?
The supplier standards describe a publicly accessible practice location with posted hours, a business phone and space for records, with some exceptions. Whether an online or mail-based model fits depends on your facts. Ask the NPE contractor and an adviser before you build the plan around that model.
Get your free practice audit
Tell us about your practice. We will contact you using the details you give.
- A review of your recent claims, denials and A/R aging
- Where your front desk and prior authorizations slow payment
- A prioritized fix list you keep, whether or not you hire us
Pricing is quoted after the audit, based on your volume and the services you choose. Prefer to talk? Call +1 (302) 556-2288.
Sources
- Enroll as a DMEPOS Supplier — CMS (2026 (page last modified 2026-06-03))
- 42 CFR 424.57 Special payment rules for items furnished by DMEPOS suppliers — eCFR (2026 (accessed 2026-10-17))
- DMEPOS Basics (MLN905710) — CMS Medicare Learning Network (2025 (December))
- Medicare Program; CY 2026 application fee amount — Federal Register / GovInfo (2025)
- Required Face-to-Face Encounter and Written Order Prior to Delivery List — Federal Register / GovInfo (2023)
- Transmittal 10840 (CR 12310), Claims Processing Manual Chapters 1 and 20 — CMS (2021)
Disclaimer: This article is general educational information for people starting a DME business. It is not legal, tax, compliance, coding or billing advice. Medicare rules, fees and CMS lists change and vary by contractor and state. Confirm requirements with CMS, your enrollment contractor, your state agencies and a qualified adviser before you act.
