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This guide is for someone planning to start a durable medical equipment (DME) business that will bill Medicare, and it sets out the order in which the steps depend on each other. It is general information, not legal or medical advice. Medicare calls these businesses DMEPOS suppliers (durable medical equipment, prosthetics, orthotics and supplies). A supplier is, in the words of 42 CFR 424.57, an entity or individual that “sells or rents Part B covered items to Medicare beneficiaries.”
How do you start a durable medical equipment business?
For a business that will bill Medicare, CMS lays out six enrollment steps: get accredited, get an NPI for each practice location, complete the enrollment application, pay the application fee, work with your enrollment contractor, and post a surety bond. State licensure, where your state requires it for the items you supply, is a condition on top of those steps. CMS lists accreditation and the NPI ahead of the application itself, which is why the order matters more than any single step.
What is a DME business?
A DME business sells or rents durable medical equipment to patients, either for cash or through payers. If it bills Medicare Part B for covered items, it must meet the Medicare DMEPOS supplier standards in 42 CFR 424.57. The detailed standards are covered in DMEPOS supplier standards; this page covers the launch sequence around them.
What you need
These figures come from 42 CFR 424.57 (eCFR text as of 2026-10-01, checked 2026-11-01). Check each against your state rules and your accreditor before you commit to a lease or an insurance policy.
| Requirement | What 42 CFR 424.57 says |
|---|---|
| State licence | Where a state requires it, the supplier must be licensed to provide the item or service (paragraph (c)(1)(ii)(A)). |
| Practice location | At least 200 square feet, accessible to the public and staffed during posted hours (c)(7)(i)(A)(1). |
| Hours | Open to the public a minimum of 30 hours per week, with exceptions for certain physicians, therapists and custom orthotics and prosthetics suppliers (c)(30)(i). |
| Liability insurance | Comprehensive liability insurance of at least $300,000 (c)(10). |
| Accreditation | Required to enroll and bill; the supplier must be surveyed and reaccredited at least once every 12 months (c)(22)(i), (c)(24). |
| Surety bond | $50,000 base amount (d)(2)(i); the bond must be continuous (d)(4)(i). An elevated amount can apply after adverse legal actions in the prior 10 years (d)(3)(ii). |
| Revalidation | Billing privileges are revalidated every 3 years (g). |
Steps: the order of operations
Before the six CMS steps, settle the state licence and the location and insurance requirements above. CMS’s page “Enroll as a DMEPOS Supplier” (last modified 2026-06-03, checked 2026-11-01) then lists six enrollment steps, numbered below as CMS numbers them.
- Obtain DMEPOS accreditation. CMS states that “a CMS-approved accreditation organization will verify that your business meets the required DMEPOS Quality Standards.” See DMEPOS accreditation. Certain professionals may be exempt from the accreditation requirement.
- Get an NPI for each practice location. NPIs are issued through the National Plan and Provider Enumeration System (NPPES). See how to apply for an NPI number.
- Complete the enrollment application and the electronic funds transfer authorization agreement (CMS-588). Enrollment applications now go to the National Provider Enrollment DMEPOS East and West contractors.
- Pay the Medicare application fee. Use the amount stated on the CMS enrollment page at the time you apply.
- Work with your enrollment contractor. Suppliers must report changes within 30 days.
- Post a surety bond to your enrollment contractor. CMS states that “DMEPOS suppliers are required to post a surety bond in the amount of $50,000 for each NPI they maintain.”
After enrollment, claims use HCPCS codes for each item; see HCPCS Level II codes.
Sourcing products
Medicare enrollment covers how you bill, not where your stock comes from. For how supplier types differ, see medical equipment suppliers.
What can go wrong
- Starting in the wrong order. CMS lists accreditation and an NPI as the first two steps, ahead of the application.
- Letting the bond lapse. The regulation requires the bond to be continuous, and revocation can follow failure to meet the supplier standards (paragraph (e)(1)).
- Missing the annual survey. Reaccreditation is required at least every 12 months.
- Missing revalidation. Billing privileges must be revalidated every 3 years.
- Weak compliance foundations. See OIG compliance program guidance.
When to get professional help
Speak to a healthcare attorney about licensure and entity structure, an accreditation organization about the survey, and your state licensing board about state requirements.
FAQ
How to start a durable medical equipment business?
For Medicare billing: meet state licensure rules and the location and insurance requirements, then follow the six CMS steps in order: accreditation, an NPI for each practice location, the enrollment application, the application fee, work with the enrollment contractor, and a $50,000 surety bond for each NPI.
Do I need accreditation to bill Medicare for DME?
Yes, accreditation is required to enroll and bill under 42 CFR 424.57(c)(22)(i), although certain professionals may be exempt.
How big does a DME location have to be?
At least 200 square feet, open to the public a minimum of 30 hours per week, subject to the exceptions in the regulation.
Sources
- eCFR, 42 CFR 424.57, Special payment rules for items furnished by DMEPOS suppliers: https://www.ecfr.gov/current/title-42/part-424/section-424.57 (version dated 2026-10-01, checked 2026-11-01).
- CMS, Enroll as a DMEPOS Supplier, page last modified 2026-06-03, checked 2026-11-01: https://www.cms.gov/medicare/enrollment-renewal/providers-suppliers/durable-medical-equipment-prosthetics-orthotics-supplies-dmepos
