In order for pharmacies to bill Medicare Part B for items like diabetic testing supplies, oral chemotherapy and immune suppressants, and all DME, they must first become an accredited provider of Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS).
This process is overwhelming, and for the first-time applicant it can be all-too-easy to make mistakes that lead to delays in processing the application. However, not becoming an accredited provider could mean thousands per year in lost business; in addition to losing the business from the products you could bill through Medicare B, you could also lose the accompanying prescriptions that patients will take elsewhere because they want to get everything in the same place.
For these reasons it is a really good idea to obtain DMEPOS accreditation.
You can also apply to only bill non-accredited products with it, which include oral chemotherapy, nebulized solutions, and immunosuppressants.
When I did this the first time I made tons of mistakes, which is why I’m writing this post: so you can avoid everything I did.
This guide take you step-by-step, through each part of the process and each page of the application, so you can get set up as quickly and easily as possible.
Glossary of Terms
More terms available here. I thought Medicare left some important ones out so I’m filling in those terms below/explaining the most important ones in plain language.
Accreditation Organization (AO): An independent company or organization approved by CMS, that “accredits” suppliers. “Accredit” in this case is basically verifying the supplier (i.e. you, as the pharmacy) complies with CMS quality standards.
CEDI: A “Common Electronic Data Interchange.” Basically an approved processor for your Medicare claims, like a PBM is for pharmacy claims. Information can be found on this page:
Supplier Billing Number: Also called a PTAN, or Provider Transaction Access Number. It is issued by a MAC after the CMS-855S initial approval (you will not have a PTAN the first time you apply).
MAC: Medicare Administrative Contractor. A company contracted by Medicare to administer and process claims for Medicare Part A and Part B ("A/B MAC") and DMEPOS ("DME MAC") in each assigned Jurisdiction.
Here are the DME MACs, as of 2019, for each Jurisdiction:
Palmetto GBA is also in this business and occasionally shows up on the MAC list for DMEPOS.
National Supplier Clearinghouse (NSC): According to Palmetto GBA, the “single organizational entity responsible for issuing or revoking Medicare supplier billing privileges for suppliers of Durable Medical Equipment, Orthotics and Supplies (DMEPOS).”
Authorized Official: An owner or officer of the organization allowed to sign on behalf of, and contractually bind, the organization.
Delegated Official: An individual that an Authorized Official delegates their authority to for the purposes of DMEPOS accreditation.
Directory of Links
DMEPOS State License Directory: Look up what licenses are required in your state to provide each category of DMEPOS products.
NABP Accreditation Website (note: you do not have to use NABP, but regardless which AO you use NABP has great information on this site).
Step 1: Accreditation through an AO
You can get accreditation from any number of approved accreditors. NABP is one and you can find their accreditation site here.
As they state on their website, they will mail you materials to help you prepare for their accreditation process. Accreditation is required if you are wanting to bill for anything other than the products listed in Section
Because they have an in-depth applicant guide on their website, I won’t repeat everything here.
This step can be skipped if you only plan on billing for non-accredited products (See Step 3)
Step 2: Obtain a Surety Bond
This can be done before filling out any part of the application but will need to be obtained in
order for the application to be complete.
In order to bill Medicare for DMEPOS, Medicare requires a $50,000 Surety Bond be submitted with the CMS-855S application. There are numerous companies in the business of selling these "Medicare Bonds." But what exactly is that and why does Medicare require a pharmacy to have it?
Unfortunately, Fraud, Waste, and Abuse (FWA) is all-too common in the medical business; in fact, Medicare recovered $1.8 Billion and had 1,157 convictions related to FWA in 2017. A surety bond is actually a guarantee against fraudulent claims.
Here's how it works:
A pharmacy, with a Medicare surety bond, over-bills Medicare due to FWA
Upon discovery, Medicare responds by attempting to recover the losses, but the pharmacy is unable or unwilling to repay the debt.
Medicare responds by requesting payment from the bond company, up to the bond amount (again, $50,000 is the requirement) to recover the lost money.
Upon paying it, the bond company will then attempt to recover the money from the pharmacy.
Requiring a surety bond protects Medicare from FWA, can help deter FWA, and is considered more of a line of credit than insurance. The pharmacy does not have a right to the $50,000 in the case they do not pay Medicare for over-billed claims. This is important to understand because the surety bond protects Medicare, not the pharmacy. It is still the pharmacy's responsibility to accurately bill claims and not doing so can put the pharmacy at significant risk of financial and potentially criminal charges.
Here are some companies in the Surety Bond business:
Once you receive the Surety Bond, the Authorized Official MUST sign it! I’ve used Marsh in the past and they do state that in their cover letter they mail with the copy of the bond, but it is easy to overlook.
Also, make a copy of the Surety Bond. NSC will want to see it for their site visit (see Step 5).
Step 3: The CMS-855S Application
Go to this website and download the application.
Prepare yourself a stiff drink, because you’ll need it (see Step 9).
Fill it out electronically so you can save it. You will probably mess up and make changes a lot, so if you do it by hand older versions can easily get mixed in with the newest versions. Electronic makes it easy to print the most up-to-date copy as edits are made.
SECTION 1: BASIC INFORMATION
Fill in your state, NPI, Tax ID, etc.
One important point to note - the name you list under Legal Business Name must match the legal name provided to the IRS, the NABP, etc. If the names don't match exactly get them changed before submitting this application or it will get rejected.
At this point you will probably not have a Supplier Billing Number so just leave that blank.
Reason for submitting this application will be "new enrollee" if you have not ever submitted this application before.
What information is changing? fields can be left blank if this is a new application.
SECTION 2: IDENTIFYING INFORMATION
Date this business started at this location can typically be the initial licensure date, unless your business moved after getting licensed.
Leave the Change box and Effective Date blank if you are submitting a new application. That box is there in case an existing DMEPOS supplier needs to update their address with Medicare.
States where items provided: The boxes you check here will assign your application to the MAC for that jurisdiction. Future correspondence about this application will come from the MAC, not from CMS.
SECTION 3: PRODUCTS/ACCREDITATION INFORMATION
In this section you have two big options to choose from:
Only sell non-accredited products
If becoming accredited, you will need to first apply through an Accreditation Organization (AO); however, it can also lead to a large additional source of revenue so most pharmacies choose to pursue accreditation. For example, pharmacies must become accredited to bill CMS (i.e. Medicare B) for diabetic testing supplies.
As you can see on the application, the following products can be billed through Medicare B without Accreditation:
Oral Anticancer Drugs
Oral Antiemetic Drugs (Replacement for Intravenous Antiemetics)
If choosing to only pursue non-accredited products, check the box next to the Note that says "Check here if the supplier provides one or more of the products shown above but does not furnish any of the products and/or services listed in Section 3D. If checked, skip Section 3D and continue to Section 4."
Then follow the instructions and skip to Section 4.
I would also recommend that, if you are choosing only these products, it is best to check the box next to all of them so that you have the flexibility later to start billing for those products without updating your application if it makes good business sense to do so.
This section lists a wide variety of DMEPOS products, but if you’re pursuing Accreditation to bill for any of these products, most pharmacies are going to want to at least be able to bill for "Blood Glucose Monitors and/or Supplies."
REALLY IMPORTANT: Check licensing requirements for any DMEPOS item you intend to bill Medicare for. Not sure where to look? Thankfully Palmetto GBA has done the work for you and created a directory here.
Other items that many pharmacies are in the business of providing and might make sense for you:
Canes and/or crutches
Surgical dressings (wound care can be a great business model, especially if you tie it in with Santyl, SSD cream, and, if you have the capacity to do it, home infusions. Combine that with home delivery and you're really setting yourself apart from the chains).
Insulin infusion pumps
SECTION 4: IMPORTANT ADDRESS INFORMATION
Just like in Section 1, it is crucial that the legal name provided on the form match IRS records exactly. The application does say this ("If you are an organizational supplier, furnish the supplier’s legal business name (as reported to the IRS) and TIN") but it is easy to miss.
Leave "Change" and "Effective Date" blank, just as you had in the previous sections.
I can't imagine that we have many pharmacies out there that are sole proprietors, so unless that is you leave A.2 blank. All of your information will go in A.1 "Organizational Suppliers."
For Sections C and D, if you want everything mailed to the same address check the box indicating that and the leave those sections blank.
E: MEDICARE BENEFICIARY MEDICAL RECORDS STORAGE ADDRESS
Many pharmacies store records off-site. If that is your case, check the "Add" box and then fill out the information on the vendor. You can Google their address or contact your representative to find out what address to put on the application.
Yes, you do store records electronically and your software system is what stores them. Put the name of the pharmacy software system and/or its parent company in this field. For example, QS1 is owned by JM Smith Corporation, so if I had that system and was filling out the application I would put "QS1 Pharmacy Software, owned by JM Smith Corporation."
SECTION 5: COMPREHENSIVE LIABILITY INSURANCE INFORMATION
Most of this section is straightforward with one major exception: the National Supplier Clearinghouse MUST be listed as the certificate holder on the policy. I have made this mistake before and it sucked having to submit a revision just because of that.
SECTION 6: SURETY BOND INFORMATION (See Step 2)
First you need to have a Surety Bond, which you probably don't have if you have not billed for DMEPOS in the past. Step 2 contains a list of companies in that business for you to find one that fits your needs.
SECTION 7: FINAL ADVERSE LEGAL ACTIONS
One big thing about Section 7. If you have not had any legal actions you cannot just skip it. Instead, go to Section C and check "NO" on Question 1. If you miss this section, you'll get a deficiency letter (again, I’ve done this before - don’t do it!)
SECTION 8: OWNERSHIP INTEREST AND/OR MANAGING CONTROL INFORMATION (ORGANIZATIONS)
If your pharmacy is owned by another company you will need to fill this out. That would apply to most chain pharmacies and independents with multiple locations.
For the initial application you can check "ADD" on the top section.
For "Medicare Identification Number," that is your PTAN. If this. is your first time doing this application you will not have one so skip it.
Other than that, complete Sections 1-5 for Part A.
If you add an organization in Section 8, you HAVE TO fill out legal actions. If you have not had any legal actions, check “NO” on Part B, Question 1.
SECTION 9: OWNERSHIP INTEREST AND/OR MANAGING CONTROL INFORMATION (INDIVIDUALS)
This section is filled out similar to the way as Section 8.
Of note, though, Medicare requires that you add
An Officer (it’s a good idea for them to also be your Authorized Official) and
A Managing Employee.
They also require that you list all owners.
If you add Delegated Officials, they will also need a Section 9 completed.
In other words, you will need multiple copies of this section. If you only have one Section 9, that’s a red flag you’re doing something that will get your application rejected.
SECTION 10: BILLING AGENCY INFORMATION
Self-explanatory. Pharmacies usually don’t use a billing agency.
We prepare and submit our own claims typically, so there’s no need to list a PSAO (which only contracts with third-parties), a switch (which routes the claim, not prepares or submits it), or your software vendor (you pay them for the system but the claim is still coming from you).
SECTION 11: CONTACT PERSON INFORMATION
Not much to be said here. In my case, though, I have completed the application for outpatient pharmacies within hospitals, so the CEO or COO are the Authorized Officials. They definitely don’t want to be contacted about the application, so although I’m not either Authorized or Delegated for my pharmacy to sign on their behalf I listed myself as the contact so I could at least be the ‘gatekeeper’ and help save hospital leadership some headache.
SECTION 12: SUPPORTING DOCUMENTS
DO NOT GLOSS OVER THIS SECTION!
The application has a good checklist, so I won’t re-list it all here, but the first time I filled this out I made the mistake of missing numerous pieces of supporting information they said were required.
One in particular I missed was the EFT form, or CMS 588, that is required to go with the application.
SECTION 13: PENALTIES FOR FALSIFYING INFORMATION ON THIS ENROLLMENT APPLICATION
Here’s all the scary stuff telling you how long you could go to jail if you lie on the application.
SECTION 14: ASSIGNMENT OF DELEGATED OFFICIAL(s)
An Authorized Official (who is an owner or officer of the organization) can choose to delegate their authority to another person to sign the application. If you or your organization chooses to do this, you must fill out a Section 9 for each Delegated Official.
Skip this and they’ll send you a deficiency letter.
SECTION 15: AUTHORIZED OFFICIAL CERTIFICATION STATEMENT AND SIGNATURE
All Authorized Officials fill out and sign this section.
Just like Section 14, you must fill out a Section 9 for each Authorized Official!
Skip this and they’ll send you a deficiency letter.
Step 2: The EFT Form
You are required to be enrolled in EFT for payments.
Be sure to include either a voided check or a bank letter confirming your Routing and Account Number.
It’s a good idea to make the contact person the same contact person as the CMS-855S so there aren’t too many cooks in the kitchen.
Step 4: Finally you can mail the application!!
Do yourself a favor - for an application this important, mail it Certified with a Return Receipt.
Expect a response within a few weeks or so. You will either get a deficiency letter (in which case you have 30 days to correct deficiencies), or you will get a notice that all is good.
Step 5: The NSC Site Visit
After everything is OK with the application, an inspector will come to the pharmacy and do an inspection. Here is their entire checklist so you can prepare in advance (the applicable law can be found here) :
Required licenses, including zoning
Credit agreement(s), or invoices
Capped rental/inexpensive or routinely purchase option agreement
Proof of warranty coverage
Accessibility to physical site
Hours of operation
Comprehensive liability insurance policy and/or Certificate of Insurance showing NSC as the certificate holder with PO Box 100142 Columbia, SC 29202
Documentation for written instruction/information on beneficiary use/maintenance of supply
Beneficiary copy of supplier standards found in 42 CFR 424.57
Listing of all Management/Owners, including name and title
Complaint resolution protocol
Surety bond agreement
License of oxygen supplier/distributor/wholesaler
BOOKMARK THIS PAGE. It lists requirements and provides templates for several of these documents you would otherwise have to make on your own. Instead, just fill in your pharmacy’s info and print it off for the inspector.
Unfortunately, their templates are kind of a pain because you can’t edit them to just change the address to your pharmacy. That’s why I created templates you can easily edit in the Free Products section. They are also at the bottom of this post, including places to put your hours of operation and list of managers/owners.
For #3, print it directly of their website.
For #8, that means a label. Print a copy of your label (maybe with a Dummy patient, if you have one), and stick it in your files to prepare for the inspection.
For #9, get supplier standards here.
Step 7: Setting up the processor (i.e. CEDI)
In Medicare jargon, these people are termed a CEDI, or a Common Electronic Data Interchange. If you’re looking for some thrilling reading, you can read all about them here.
Medicare approves these certain companies to electronically process DME claims so you’ll need to enroll with one.
You can find the full list of approved CEDI companies here. Pick your poison, call one of them, and follow their instructions to get set up. The company I chose gave me a no-brainer guide to filling out the last of the electronic application so they could bill my claims and it took all of 10 minutes.
Step 8: Adding processor's information to pharmacy software system
You should receive the BIN and PCN numbers to bill your DMEPOS processor in the pharmacy. Get that added in and get to it!
Step 9: Celebrate, have a drink, and enjoy the bump in business
Let’s face it - that sucked! Glad that’s over. I usually feel like I need a glass of wine (preferably Oregon Pinot Noir) after dealing with Medicare’s obscene amount of paperwork. I’m sure you do too.
I hope all of your hard work pays off and you can get a revenue boost as well as provide expanded services to your community. Enjoy!