How to Start a DME Company: 2026 Setup Guide

0:00Introduction: why DME setup exists

In the name of Allah, the Most Gracious, the Most Merciful. Assalamu alaikum. So today's session starts now, and today's session is basically about DME setup, about how we form an NPI, and how we fill out the PTAN, the CMS-855S application, and what the steps of accreditation are, and what accreditation With me today is Ansar Ali, who is the Operations Director of our Next RCM and is leading most of our projects. So, assalamu alaikum, Ansar, how are you? Are you well? Wa alaikum assalam. Alhamdulillah, thank you so much for having me in the video.

How are you? I'm fine. So this challenge we have taken on, completing this whole detailed and deep dive course, is slowly moving forward and getting tougher for all of us. But as it moves ahead, we will keep making a detailed video on each topic too. So that users get a next-level guide. Yes, basically the mistakes we made, what we learned by failing, we can explain to people through our YouTube so that they don't make these mistakes. And this video we are about to make now is very important and related to DME, so it will be fun to shoot this video, inshaAllah. So basically people ask why this setup is so hard. Why has Medicare made its system so complex? The reason is that Medicare reimburses billions of dollars to providers.

2:02Why setup is so hard (on purpose)

And this Medicare system was not always this strong. It was not always this strict and this complex. It happened over time, when more schemes grew, when there were a lot of frauds, and because of bad players and their bad practices, Medicare has put security guards at every step. So basically Medicare needs to know that you want to become a Medicare provider and, after becoming a provider, you want to serve Medicare beneficiaries. So who are you? And besides that, has a Medicare expert inspected you, or has your inspection not happened yet?

And the entity you have created, are you disclosing your owners in it or not? Because in the US there are some entity formations in which you can even hide your ownership. Meaning, in the documents it basically won't show who the owner is. But for Medicare, when you create an entity and form an LLC, or if you go toward an S corporation or C corporation, then it is necessary that you disclose the ownership. Whether there is one owner or more than one, you disclose it. Besides that, Medicare also wants to see whether behind this partner, behind this provider, behind this whole DME provider, there is some financial scheme, because this has been a very big business over some years, over a few years, where this has been happening, where this has been happening.

I'm checking the mic settings, to see which mic I turned on. Okay, let me check my mic. Actually, for a long time there has been a business scheme where people would form a DME and, through the CMS-855S application, take a PTAN with Medicare, meaning they would get billing rights, become Medicare partners, become providers, and after that what would they do? After that they would do fake billing. Okay, someone else's name, they would set up a dummy, a Mexican or someone like that, a person from India or Pakistan who went on a business visa, and he has an EIN number, or he has an EIN number, so they took that, and then they submitted a whole 855S application, and then they got Medicare billing rights, and after that they did a good amount of fake billing.

Medicare is a billions of dollars program, so when Medicare got an alarm, and Medicare basically when it went and identified it, by then he had already done a lot. So Medicare therefore built so many security guards, and to make this whole process safe, to protect this whole process from bad billing practices, they built steps, and how to set up a whole DME, inshaAllah we will look into it in detail today. Once that is done, basically the next step is that when Medicare finds out that you are going to build an actual DME, after that you must also have a physical office.

If your office is at a residential location, or you have a virtual address, or a PO box, then neither can a Medicare surveyor come there to survey, nor can the accreditation survey take place there, because it has full compliance standards. Having a physical address, a commercial physical address, is very necessary. And once you take care of these things, you get your billing key, and you can start billing Medicare. Yes, you wanted to say something. I just wanted to say that basically they have now built a tracking system for DMEs so that they can keep an eye on every DME.

Exactly right. So those who do bad billing practices, basically to identify them and to reduce this activity, because this scheme was not in the millions of dollars, it had gone up to billions of dollars, so for this reason they changed their policy. Anyway, now we move ahead.

7:06The three pillars of setup

These three are the pillars, the main pillars for setting up a DME. One of them is the NPI, the second, as you can see on screen, is accreditation, and the third is the PTAN. Meaning you can call it the Medicare key, or the DME provider's Medicare number. So basically this is the Provider Transaction Access Number. Once you get this, first comes the NPI. Okay, before the NPI, let me tell you that just now, when we were discussing before this session, Ansar also told me that you should also discuss how you form an LLC and how you create an entity, because in the slides there is the question of whether you want to form a limited liability company, or a corporation, and in that, whether you want to form an S corporation or a C corporation, whichever you want.

7:57Forming the business entity

These entities have separate rules and separate specifications. And about the LLC, we will make a separate detailed video just on LLCs, and we will show you how you can form an LLC. And of course a real US citizen is necessary for this, because later you need a physical bank, and without an EIN number, without an EIN number, you cannot get an NPI. Now, what an EIN number is, I will tell you that too. An EIN number is basically the Social Security number of your entity. Earlier, what used to happen is that your company, your entity, had your Social Security number behind it.

Because of that, your personal information, which is tied to your Social Security number, would become publicly revealed. So then through the IRS system, an Employer Identification Number gets attached to your entity, and it becomes your entity's Social Security number. And when you verify with any provider, or ask a payer about insurance coverage, or check anything with a payer, they ask for your EIN number, because it is a Social Security number type of thing. Just as with Medicare, if it has to check a patient's eligibility, it will ask for the patient's Medicare claim number, or the claim number of their insurance.

In the same way, if you are verifying any information with a payer, they will ask for your claim number, they will ask for your Social Security number, they will ask for the company's Social Security number, and the company's Social Security number is this EIN number. The EIN number is also called the Tax ID, and you go and apply for it through the IRS portal. It takes about one to two weeks, and it comes through.

10:44Pillar 1: the NPI

Okay, now the NPI is of two types. This is the National Provider Identification. Yes, Ansar, you were saying something. Yes, I wanted to add one thing. In a simple way we can say it like this, just as we have an SSN, yes, exactly, the company has an SSN, or the EIN number, which is the company's SSN, and the NPI is the same kind of thing. Basically, if you are practicing healthcare in the United States and providing any service, whether tangible or not tangible, you have to enter the national program, and to enter the national program you have a system of theirs, the CMS system, and the full form of CMS is Centers for Medicare and Medicaid Services.

It is a federal agency that basically oversees Medicare and Medicaid matters. Under CMS there is an agency called NPPES. It has a portal, you go there and apply for your NPI. For that you need your taxonomy code, your and now I will tell you basically what a taxonomy code is.

11:56Taxonomy codes explained

Okay, there is a portal through which you apply for your DME, after you have your Articles of Incorporation, you basically apply for your specialty. The taxonomy identifies your specialty. Meaning if you are going to work with low-ticket DME products, then for that there is the DME supplier taxonomy, the DME supplier taxonomy. But if you are going to work with high-ticket products, for example if you want to work with custom wheelchairs, then in your NPI you will have to add the custom wheelchair taxonomy as well. But the taxonomy is basically unique to each specialty, but the same for every provider.

Just as the NPI number is, mine will be different, Ansar's will be different, but if I am a DMEPOS supplier, the taxonomy will be the same for me and for you. The taxonomy only identifies your specialty, and it is very necessary for the NPI, because inside your NPI it identifies what your specialty is. Okay, with NPIs, a doctor has a separate one, a doctor's office has a separate one, a clinic has a separate one, a hospital has a separate NPI too, nurse practitioners have a separate one too, skilled nursing staff have one too, and besides that, those who are in DME, the orthotists, and besides that, the repair people, the skilled staff, they have NPIs too.

So there are two types of NPI: one is for an individual, and the other is for an organization. So for DME, of course, we need the organization Type 2 NPI, and from this very NPI it basically gets embedded further on into your PTAN number, and then you can bill. So the NPI is the first pillar, and for the NPI you first have to form the corporation. You need that for the EIN number, and after that you have to get the taxonomy, and then you have to go to NPPES and get the NPI, and there is no cost for it.

It comes within one to two weeks, and after that you have to go to the next step. Now the next step, this taxonomy slide has come up. I have already told you that the taxonomy identifies your specialty. and at the time of your Medicare enrollment, when you are applying with the 855S, at that time you also have to put the taxonomy in the application. And the DME taxonomy always starts with 332B, here there is an illustration, this is what the taxonomy looks like. It is the same for all DME providers.

But if you are working on a custom product, its taxonomy can be different. Okay, for instance if you want to add, within the same NPI, home health services, in which you send an occupational therapist to the patient and bill Medicare, in which you send a chiropractor, or in which you send a speech therapist or a physical therapist, then the home health taxonomy is different. And within one NPI you can add different taxonomies, but an entity has only one NPI. But if, for instance, you have a DME in Dallas, and you register Dallas, then its NPI will be separate, and if you register Houston, if you open a second branch, then its NPI will be separate. Okay. Okay, now let's move ahead with this.

16:08Pillar 2: accreditation

Now pillar two is accreditation. Ansar, if you could make it a bit easy, or on this taxonomy, EIN and NPI topic, if you want to share anything that would make it easier, you can. Just one thing I want to add for understanding taxonomy, simply this: every specialty has an identification that tells you which specialty this is, like for DME, for a specialist, a doctor in a hospital, like internal medicine, chiropractor, it identifies which specialty they work for. Taxonomy is used for that. Meaning internal medicine will have a separate one, and if there is a family medicine doctor that will have a separate taxonomy, and in the same way if there is a psychiatrist or a gynecologist or an endocrinologist, their taxonomies will be separate, but the taxonomy of all psychiatrists will be the same, and of all gynecologists will be the same.

Yes, basically it is kept this way because when we submit a claim to insurance, so that it goes to the DME supplier desk at the payer, for example the internal medicine claim submitted should go to the internal medicine one. If it is mixed up, they identify it separately. Let me tell you one more thing, this taxonomy has been kept so that each payer can be identified and it can go to separate places, without getting mixed. Absolutely right. One reason for it is also this, that when you submit a claim to insurance, it should be routed to the right department, because the insurance processes claims by taxonomy, they have their departments set up, so if your taxonomy is DMEPOS, it will hit right there, if yours is internal medicine or home health, then your claim goes through the clearinghouse to that insurance's department.

So now we start understanding the accreditation pillar. Okay, their survey checks. Accreditation, validation, basically in labs, in laboratories, its other name is validation. In DME this is accreditation, and it has a few survey checks. First, there are the accreditation companies. If there is a DME company, it can only get accredited by an accreditation company that is enrolled with Medicare, that is a Medicare provider, and is linked with Medicare. If there is an accreditation provider that is not linked with Medicare, then its accreditation on the CMS 855S form, which we will understand ahead, the PTAN form, it has no validity there.

Okay. So that is the first point. The second thing is, first the company gives you a whole manual, and you have to buy it. It has a price, and basically in it, how you have to manage your operations, how you have to manage your staffing and training, how you have to manage your intake, how you have to manage deliveries, how you have to handle complaints, how you have to handle product safety, so that it does not happen that the patient has a product recall, the patient's product is broken or infected, how you have to pick it up, and besides that, you have to meet a certain competency level on products, because you cannot bill Medicare, a Medicare beneficiary, for any product that is not FDA approved.

So there is a fixed quality standard for products, and if the product is not FDA approved, if the company is not enrolled with Medicare, then you cannot bill its product. For instance, let's take a small example, CGM. If a patient needs a CGM, for instance, you can give only the one that is a Medicare-enrolled CGM, a CGM provider, and an FDA-approved CGM, like the FreeStyle Libre. You can give only that, and there is another one too, Dexcom, I just remembered, so Dexcom. So basically you can give a Dexcom monitor CGM to the patient.

In the same way, if there is a CGM that is not FDA approved, you cannot give that to the patient. And below are the names of some CMS-approved accredited providers. ACHC, The Compliance Team, BOC, and HQAA. Okay, with this BOC, its license in some states has been cancelled, so they did not follow the supplier standards, so their license was cancelled. So now their accreditation, I mean, providers have had to get re-accredited, but Medicare has now allowed providers to complete the full time period of the accreditation, which is three years, it has just now given permission that is, those providers who had already got accredited with BOC, can now complete their three years, and after that they will have to get accredited with another accredited supplier.

21:27Accreditation renewal and 2026 updates

And BOC's license has been cancelled in some states because they did not take care, and most of the DMEs that did bad billing practices, the accreditor that accredited them was this supplier, so that is the reason too why Medicare did this, that you have to immediately get accredited by another accreditation supplier. But there is one organization, AAHomecare, which basically, of the US DMEs and home health, everything that is home care, basically maintains the rights of all the providers. Basically it is a very big organization, and a lot of DME suppliers are connected with it, and at different levels, whatever lawsuits there are, or new rules and regulations coming, they affirm those, and standing in front of them, for example, a new rule is about to come, that in bidding, earlier braces were in bidding, then when bidding was over, braces went out.

I mean pain relief braces, and I am talking about orthotics, sorry, I am talking about prosthetics and orthotics braces. But now what has happened is that in 2028, the new rule Medicare has issued is that they want to put ostomy supplies and incontinence supplies into bidding too. So now AAHomecare, on behalf of providers, at different levels, in the federal establishment, in the White House, and in the Department of Justice, and together with different departments, is working to get these supplies out of bidding. In the same way, they succeeded in getting the oxygen supplies out of bidding, but they have not yet been able to get the incontinence supplies out, nor have they been able to get the braces out, nor the ostomy supplies out.

Okay, so basically this is an overview of accreditation, and accreditation takes three to nine months. It depends on how quickly you completed the standards, how quickly you completed their standards. If the DME has companies like us, we know how to manage all the compliance structure, and how to fulfill all of their standards, so then once you tell them, then the surveyor comes, and the survey happens, and after the survey you are given the accreditation. Okay, now earlier Medicare's rule was that you have to get accredited every three years.

Okay, and it is very expensive, three thousand to eight thousand dollars. Okay, but now Medicare has made a rule that you have to get accredited every year, and a Medicare surprise visit will also be included in it. This did not happen before. Earlier there was no accreditation at all, accreditation has only come since 2009. In 2009 there was not even accreditation. Okay, so this, as I told you before, in the way that bad billing practices grew, they gradually brought out policies, and gradually they put safety measures in place to stop these things.

Okay, Ansar, do you want to add something to this? No, no, everything is clear. Okay, so about accreditation, it is correct that it is not forever. You have to renew it every three years, but according to Medicare's new rule you will have to do it every year, and there will also be a surprise visit. But of course every year you will not have to pay that much money, there is a renewal cost that you have to pay, but of course it can be up to 1,500 dollars or 2,000 dollars.

You have to pay it every year, so this is the yearly expense of a DME. You can divide it over 12 months and build it into a whole budget. I mean, I am telling you one thing, that if you understand this whole session well, then you can set up a whole DME. And the way YouTubers make videos on YouTube, they say, the main thing, I will tell you in the video, to the end, so that everyone watches the video to the end, so I am telling you first that Medicare is going to close DME enrollments from January 1st.

First of all they issued this rule, about change of ownership, in January, that from January 2026 no change of ownership can happen. Meaning no DME can be sold, no buyer can buy it, because it was a very big business, they would be sold, and after that bad billing practices would happen in them, and then they would shut it down and disappear. Okay, now they have launched a change of ownership program, in which you can sell only stakes, you can sell 49% stakes, and you cannot sell more than 49% stakes.

But if your DME is three years old, then the whole DME can go through a change of ownership, 100% stakes can be transferred, but if the DME is not three years old, then 49% stakes can be transferred. So the business of buying a DME, you can understand, was completely over in one day. I mean 80% is over, 20% is left, but of course people will have to proceed very carefully. Second, they issued a rule in February 26 by which the new enrollments, the new 855S applications, they have blocked until July, for the first time since 1965 until now, they have done it for the first time, because enrollments were happening so fast and the schemes were happening so fast, for this reason they have closed it until July 26, for now, and after that they can extend it too, but this is the deadline they have given, we will find out when it comes what they want to do next.

Okay. So this is one main thing that I wanted to add here, which is necessary to add here. Yes, Ansar, go ahead. Yes, yes, to complete it it is necessary to add this here too, that for instance, if yours expires and you did not revalidate it in time, if you did not revalidate your PTAN, your PTAN key, the PTAN number you have, it will be revalidated, it will become revoked, once it is revoked, then to get it reinstated you then have two options. First, you have to immediately do the revalidation of your accreditation, you have to do the reaccreditation, and after that you have two options, either you have to take a corrective action plan, or you have to go to reconsideration.

You go toward reconsideration when you have revalidated, but you did not submit it. You go toward the corrective action plan when you made a mistake, and then you tell Medicare that this is my corrective action plan, this will not happen again, I will maintain this supplier standard. So this can take one month, two months, three months. We also, I mean, providers come to us, and for example our three recent cases, I will discuss them now, but first let's hear Ansar, Ansar wants to say something. Yes, I had one question to ask, that the DMEs older than 2026, will they have to get accredited by 2027, and the ones that register after 2026, will it be for them?

Yes, yes, those who did their reaccreditation in 2025, and those who did the three-year reaccreditation, they are allowed to complete their time, but this rule is from January 1st, 2026, that every provider who has to get accreditation has to do it every year. The earlier ones, this AAHomecare, they worked hard on it, these people basically fight these cases, and basically they raised this point in front of CMS and in front of Health and Human Services, basically within HHS, in front of CMS. Basically, after this, inshaAllah, in a whole course, I will take you all the way down, down to the legislative level, where there are counselors and so on, and different, basically what you call attorneys, state attorneys and so on, so it will be fun, in this course, I will inshaAllah do a whole deep dive on it, but for now let me tell you that under the Senate there is a committee, not a committee under the Senate, there is an agency, the video units, special investigation units, and the approved Medicare safeguard units, they basically work under its integrity.

31:01Fraud enforcement and real client cases

Okay, the DOJ also works, the Department of Justice, they basically work to stop schemes and to stop fraud schemes. Okay, now let's understand this, what was I explaining. So I said that before Ansar, let's hear Ansar first, then I will explain that to you, what was it. You had said that he was telling the story, I was telling you about three recent cases, like a provider came to us just now, who came to our partner, so in a way you can call us a subcontractor. Their problem was that their liability insurance did auto-renew, but they did not go into PECOS and submit it.

Okay, so their PTAN was revoked, and for a full one and a half months their billing rights remained revoked. So for one and a half months they could not do anything, and could not bill even old patients, and in supplies too, going forward the recurring ones, because in DME there are a lot of supplies that are recurring, like patients on diapers, absorbent supplies, patients, you have to give them every fourteen days, you have to give them for sure, and in the same way there are CGMs, in which you have to give them refills for sure, the sensors, of the CGM monitors.

So then its billing is disrupted, and your whole business stops, your revenue stops, and these incontinent supplies, I told you this in the first class too, that they are billed to Medicare, they are not billed to Medicare. because Medicare is not designed for daily routine supplies. The second thing is that we were managing their whole DME, meaning delivery and billing, credentialing, everything, from social media, digitizing, and besides that, managing the patients, the GMB, getting reviews from patients, provider relationships, bringing in orders too, its inbound marketing, we were doing everything.

What happened with them is that they had an issue with the surety bond. Ansar, it was the surety bond, wasn't it? What happened with their surety bond is that their surety bond expired and they forgot, they did not properly build a tracker, whereas one of our services is also this, that we provide providers a service that we will keep a tracker on all the documentation, and managing that tracker will be our responsibility. So anyway, theirs expired and it automatically got revoked, and it took about a week and a half, it was reinstated quickly, but for a week and a half a lot of things went out, billing, and besides that patient care too.

If your credit is good, you get very good rates, you have to pay a low premium on it, but if your credit score is bad, you have to pay a higher premium on it. So with some loan, anyway, their credit score went bad and overnight their premium, that is, you can understand that the surety bond premium reached from 250 dollars to 3,000 dollars, and it expired, and when it expired, immediately the PTAN was revoked. Then somehow they got the surety bond again, and their liability insurance had also auto-renewed, but it was not updated in PECOS, so then they got that updated too.

Then they got it updated, so now I think, God willing, in a day or two their PTAN will go to green status, their PTAN will go to green status, and then they can continue their billing. Okay, now we move ahead. Okay, now this is pillar three, here it has come, the thing I keep telling you about, the CMS 855S, which is the enrollment application that you have to fill out when you apply for a Medicare PTAN and you want Medicare billing privileges.

37:30The CMS-855S enrollment application

Meaning you want Medicare billing rights. Through what do you submit the application form? Through PECOS. By this point, you can understand, you have an entity, you have made a bank account, you have an EIN number, a taxonomy, an NPI, a Tax ID, you have completed accreditation, you have taken your surety bond too, and your accreditation is done too. Actually your accreditation can happen alongside, there is no such issue in that, but it is better if the accreditation is done beforehand. Then you have to submit the CMS 855S application.

It takes about two months, and after that you get the PTAN number, and in it you have to disclose your business structure, your location, your product line, which products you will bill to Medicare, and your ownership structure, and your officials, you have to disclose those. Okay, and in it there is the signature of an authorized official, because this is an official document, so there is a signature on it. It has to be signed, so this application is submitted on PECOS. And this is a Medicare submission, it has no relation to Medicaid.

A separate class will be made for the Medicaid submission, and in it I will tell you how to apply to Medicaid, because Medicaid is different for every state. I told you that Medicaid is a state program, but it operates with federal involvement, and 75% of the money in it is federal, 25% of the money is the state's. That is why Medicaid, for example in California, its name is Medi-Cal, in Texas there is the TMHP portal, so it is different for every state, and for every state the application is different, and some rules are different by state, mostly the same, some differ by state.

I also told you about Medicaid, Medicare, and Medicare Advantage. Go and look at that in the previous episode, understand it, and I also have to make a detailed video on that. Okay. Now we move ahead. Okay. This is basically the slide about the site visit, that after you submit an 855S application form, a site visit happens, and this is not an accreditation survey visit, not from an accreditation firm or an accreditation organization, no surveyor from them is coming, a Medicare surveyor comes, and this did not used to come, then it started coming, but with notice, now it comes without notice, and now the new rule that came out says it will come every year without notice to visit the site.

40:04The site visit

So these timely changes have happened in it, and this your timings basically, the timings of your DME that you put into your 855S application, the surveyor comes in that very time and does the survey. If you have put a PO box address, he cannot come in, so that application will not be accepted at all. In the same way, a virtual office does not work, and a home address does not work either, it has to be a commercial office, and an existing office, a physical office, a virtual office address does not work, and there is one more thing, about the address, the address if you put one thing for the address, and then something else in the claims later, then because of that there can be a lot of rejections, even denials.

That is why, if you are changing your location of the DME, then you have to go to PECOS, on your this PECOS is a government portal that connects directly with the government, okay, it is their portal, and in it you go and basically change your address. You have to file a change of address application, and then your address gets changed, because then Medicare, looking at this very application, looking at this very application, sends you letters at your address, whatever necessary letters there are, if they go to the old address, the letters, then you can understand that you will not even know that they are asking you for some document, and your billing privileges will be revoked.

Okay, now basically this pillar 3, this is with the supplier standards, these supplier standards CMS has made all the standards for the DMEPOS supplier, and it is famous as the standards document, the 30 supplier standards, it is known by this name, in it there are 30 supplier standards that a supplier has to maintain at all times, and the supplier has to work accordingly.

42:28The 30 supplier standards

If you do not follow anything, then either there will be a penalty or the PTAN will be revoked. In it you have to take care of your location and legitimacy, you have to take care of licensure and insurance, that your surety bond has not expired.

43:17The surety bond

A slide about the surety bond is coming ahead. Basically, the surety bond gives Medicare surety for you, Medicare keeps up to fifty thousand dollars in its hand, so that if any billing like that happens or any such loss happens to Medicare, then Medicare will opt out fifty thousand dollars from right there. But of course you do not need to have fifty thousand dollars, you can get it from any surety bond company. The surety bond depends on your credit score, and you have to pay the premium yearly accordingly, and again you have to renew it every year, and after renewing, you also have to submit it in PECOS.

The surety bond, gives surety on your behalf, up to fifty thousand dollars only. Besides that, you have to get liability insurance for your company, your entity, up to three hundred thousand dollars as well, and it is about twelve hundred dollars a year, different insurances have different prices, twelve hundred dollars, fifteen hundred dollars, eight hundred dollars, you can even get it for seven hundred dollars. People get liability insurance for one year, and for three years too. So it depends on how many years you are getting it for, and you have to take care of its expiry too, and again, liability insurance and the surety bond you will take only from a provider that is Medicare enrolled, that is in the Medicare system, that is a Medicare provider.

If you take it from anyone else, then your liability insurance and surety bond will not be accepted. And there is a Medicare rule that all your documentation, which includes proof of delivery, which includes the SWO, which is the written order, and besides that progress notes, chart notes, proof of delivery, and whatever conversation you had with the patient, you have to keep it safe in your system for seven years, so that whenever there is an audit, you are audit ready. Your compliance structure and your supplier standards, your workflow is managed in such a way that it is basically compliance ready, audit ready, so that if an audit comes tomorrow, as soon as an audit comes tomorrow, you are sitting ready, so that within 3 to 4 days you can submit it.

And basically this is one of our main services that we provide to providers, we build the whole structure for providers so that nothing falls outside the 30 supplier standards and nothing falls outside compliance, because most suppliers are desi, and they have a Pakistani back office team, so there is a compliance structure, a Pakistani back office team can absolutely work for a US DME, but there is a structure that they can do some work and some cannot do some work, some work needs approval from there. Okay, so a whole workflow has to be designed for it, and it is easy, it is not that difficult.

This too, God willing, I will teach you in a detailed video, I will explain it fully, it is nothing to be tense about. Okay, about the surety bond, I told you that this did not exist before, Medicare made the surety bond mandatory for any application after 2009, and a $50,000 surety bond is now required for every NPI, for each NPI, and you pay its premium once a year, it depends on your credit score, and it must be effective when you are submitting the 855S application, so it must be effective, meaning the surety bond should already be in place beforehand.

Okay, but if your DME has had some lawsuit against it, or some case is going on regarding billing, or some issue is going on with you, then Medicare can ask you for a traditional bond too, it is an elevated bond, that is separate from that fifty thousand dollars. Okay, now these are the big changes. About the 36 month rule that Medicare issued in 2026, I have already told you, that within that 36 month window you cannot sell the entire hundred percent stakes of your DME entity.

47:562026 change: the 36-month rule

You can only sell forty-nine percent of the stakes, you cannot sell more stakes than that, and if your DME is older than three years, then you can sell your DME. This was done because so many frauds and so many schemes were happening, people were basically making DMEs, getting NPIs, and billing like crazy, money was coming in, because Medicare pays within 40 days, Medicare is not like commercial payers. Commercial payers pay, and they also make you chase them. Medicare pays on time, which is why the backbone of any DME is Medicare.

If you follow compliance and follow all the standards and bill, then Medicare is your backbone, and you will generate that much revenue from Medicare alone, that you will not need commercial payers very much, you will, but not very much. But now in 2028 there are new challenges for Medicare, as I told you, the Medicare products in which DMEs used to earn are now going into bidding, so if a DME does not win a bid, it cannot bill those products, so they will have to work as a subcontractor, so that will make a difference in their reimbursements.

Okay, so basically the point in this rule is that if your DME is older than three years, you can sell it, and if it is not older than three years, you cannot sell it.

49:32A new scam: billing without a PTAN

Now a new scheme has come into the market that is growing very fast, and Medicare CMS and DOJ and different departments are working together very fast to make new rules, and they are scrutinizing very fast. The new scheme that has come is this, what people are doing now is that they form an LLC, they get an NPI, on Type 2 with the NPI, with a lot of taxonomies, without getting a PTAN, they bill Medicare Advantage to commercial payers, Humana and different commercial payers, in which there is a Medicare Advantage plan, because these people have mostly the data that offshore companies that do cold calling have, most of the data they have, if that person has even one medical need, I mean I am not saying that cold calling is not legitimate, it is legitimate too, but the Medicare policy does not cover it, meaning Medicare says that you cannot cold call any Medicare beneficiary and tell them their benefits.

Okay, you cannot tell them their benefits, you cannot cold call them until and unless the patient calls you themselves, or you receive an order from the doctor's office. Okay, so here the thing is, what do the agencies do here, the agencies do this, they do cold calling, and after that, mostly their lead generation happens, the more likely thing is that whatever health issue there is, or there is medical necessity, that would be for 65 plus senior citizens, a young person, in those places the health standards are good, so even a fifty-five-year-old there is perfectly healthy.

And may Allah keep everyone healthy, that is our prayer, and one thing I enjoy about working in the industry is that most of the patients who come to us are senior citizens, so we get a chance to serve them and a spirit of service develops, so I enjoy that, and this is also a reason I am in this industry, I feel satisfaction that elderly people are being served, that we should give them service as quickly as we can, so that they can enjoy that service in peace and live happily.

So the scene is this, the new scheme is that without a PTAN they bill Medicare Advantage and Medicare Advantage plans, and once recoupment and prepayment reviews start coming to them, they close that entity, okay, they drop it too, and actually they cannot do it that easily, because then it goes to a recovery agency, the recovery agency asks the LLC owner for the money, but some do not, and there are some who want to do it knowingly, so basically, to make you aware of this scam, I will say that if anyone comes to you and says an LLC, that we will build a DME and on Type 2 we will bill, then this is the biggest red flag.

Okay, if you are going to bill, then how will you bring orders? If you bring orders through cold calling, cold calling is not allowed. If you bring orders from a doctor's office, then there is a whole one-year system and structure of provider relationships, that orders come to you, then you deliver, out of pocket, okay, if you do out of pocket, then how will you do ads, how will you get paid, how will you maintain compliance? Out of pocket is also a very big market, the out-of-pocket market is 20 to 60 percent, that a lot of children want to buy out of pocket for their parents, for example, they want to gift a motorized wheelchair to their parents, many DME supplies, so this out-of-pocket is also a very big market, and it has nothing to do with insurance, but these red flags that I have made for you, the ones I have told you, you will have to watch for them.

If someone comes to you, that I want to form an LLC, you should be aware about this thing. Okay, now we move ahead. Now this class is coming to an end, and I hope you all sat engaged today and enjoyed it, and with time my delivery is getting better too, because I have taught before, which is why I am able to teach you, but I have never taught like this, making YouTube videos, so I was making a lot of mistakes, I will fix them gradually, the camera recording, the slides, and everything, God willing, I will keep improving gradually, I will keep moving to the next level.

Okay, this big 2026, the change, the second one is about the moratorium, I have told you about this before too, that the new 855S applications, the new enrollments, the new applicants, Medicare has frozen them, they cannot enroll right now, and the old suppliers can still work, and after July a new rule will come, so we will find out whether they have extended it or kept applications closed still.

55:052026 change: the enrollment moratorium (ended Aug 27, 2026)

Okay. I feel, this is my feeling, that they will bring out some rule in which they will give some special permissions to some providers or some organizations or some suppliers, but they will not open enrollments fully, and I mean, even if they open enrollments, they will add additional checks, so that these scams and frauds that were happening cannot happen. Okay. Now let's basically understand this roadmap.

56:03The full setup roadmap

As I told you first of all, first you have to form an entity, after that you go to the IRS and get an EIN, then you make a bank account, and after that you your location, the physical location, should already be in place beforehand, because you will put the same one when filing the entity, and the same will go in the EIN, and your physical location will be in the bank account too. After that the state license. State licenses are basically of two types, one is the business license, and in some states there is an additional prosthetics-orthotics license and an additional DMEPOS license too, so you may need to have two licenses.

These are roughly from 500 to 200 dollars, so in a state where you need two licenses for the DME, it will be 400 dollars. Okay, and they have renewals too, they also have expiry, so these too you will put in the tracker, the documentation tracker that will be built, it is very easy to build, I will teach you how to build that too, which now there is AI, it will start telling you one month, two or three months ahead that your expiry is coming, revalidate it.

Okay, then you have to get the NPI, you have to apply for a type 2 NPI, and with the right taxonomy code, because if you select the wrong taxonomy, the problem will be that when you go to bill, then your claims will be rejected. Then you have to get the liability insurance, and after that you have to get accredited with a Medicare accredited provider, and then you have to submit the 855S application in PECOS, and after submitting, you have to submit the 855S application, and after submitting you then have to wait, within 45 to 60 days your PTAN will come, and then you can submit the other payers' applications, actually you can do the Medicare ones alongside, and what we have mostly seen is that Medicaid comes to you first.

Okay, and Medicaid comes later, so you can do Medicaid alongside, but Medicaid, in the same way, in the roadmap I will teach you and tell you, and in commercial credentialing, the commercial insurances, the commercial payers, their own own, we do not know, they did something wrong, what did they do, they took a type 1 individual NPI and started billing on it, so all the claims were rejected, and then how did they bill. Yes, clear this up, so that those who are watching get this clear, that, just as I told you before about the NPI, there are two types of NPI, one is Type 1, individual, and one is Type 2, for an organization, so in DME you need a Type 2 NPI.

For your billing privileges, if you do anything with a Type 1 NPI, then the claims will be rejected, nothing else will happen. The second thing is that a question must be running in your mind, the one whose answer is written below too, how much the whole DME will cost, so that by the end, you have Medicare, and also with some commercial payers you are credentialed too, so you can understand it is 35,000 dollars to 50,000 dollars, this process, in which, because for one year an accreditation, you can put it at four thousand, four and a half thousand dollars, up to five thousand dollars, so five thousand dollars for that, and besides that there is an enrollment fee, and the NPI is free, and besides that, of course, you will have rented an office, so there will be rent for that office, so adding up all of this cost, roughly 35 to 50,000 dollars of cost can come to you, within 6 to 12 months, and if you are setting up a very good DME, in which you stock a lot of products too, that is very good, it is a very important point to explain, there are some DMEs that only have an office there and not many products, so they are basically using wholesale suppliers, like McKesson, DDP, so they supply products through them.

Okay. The others are those that have a storefront, so they have to maintain their whole supply chain. Okay. So naturally, if you have a storefront, and you are setting up a DME in which you have a storefront, then of course you will have to maintain the whole supply, and your expenses will be higher, so it can go up to one and a half dollars, and in that too you get credit from a company, like McKesson and DDP and Wyebel and providers like that, they give you a certain time limit of credit time.

Okay, so within six to twelve months your whole DME is set up. If you get the whole thing, then you as a supplier can easily, for all the steps of six to twelve months, do it yourself, you can charge from five thousand dollars to ten thousand dollars. Okay, what we do, this is our gig, and right now enrollments are closed, so our this business is closed. Okay, but yes, one business is open, that if there is a three-year-old DME you want to buy, we will do the change of ownership for it.

Then you work with commercial payers without a PTAN, you work by running out-of-pocket ads, you build a website and sell DME products. So that is our process that is open right now, you can definitely do this. As I told you, accreditation here says every 3 years, but now it will be every year, the surety bond has to be taken every year, liability insurance has to be taken every year, state licenses have a cycle for each state, revalidation, for all these things, along with the Medicare schedule you will have to do the revalidation, and this basically was our class today, I hope you enjoyed it, and let me check the time, how much time it has been, and in between if Ansar you want to add anything, then clarify.

1:02:28Maintaining enrollment and key takeaways

No, for now I have nothing to add, you explained everything well, from A to Z. Right, and the rest, God willing, whatever questions you have, we will look at them in the comments, and from the same topic we will make the latest videos so that everything becomes clear to you. Absolutely. And Ansar, also tell us what our plans are for this session and this course for the time to come, right now we are only making DME courses, right now this is the smallest provider, this DME one, Amen.

Of Medicare, above this are the labs, above this are the home health agencies, above this are the clinics, above this are the rehabilitation centers, and nursing homes, nursing facilities, and above this you can say are the hospices, then hospitals, so how much content there is. Yes, yes, our effort is just this, that whatever we know about the USA industry, about the health industry, we share all of it here, so that whoever watches understands how to work, the mistakes we made, we want to show here what we learned from them, so that youngsters, kids who finish matric, have an idea of how to enter this field.

Absolutely, so it has been an hour now for this session, this class, the YouTube people should not get upset with us, how long, boom, videos we are making, so anyway, naturally the course material is such that we have to explain each slide calmly and slowly, so anyway, God willing, we will meet in the next video, and meet in the next video with full preparation. Thank you so much, all of you, for sitting calmly for one hour. I have said before too that this channel is only for people whose attention span is good, because these days people's attention span is not right at all because of short content, they cannot listen to such big content and to a person who speaks so softly, and my speed is naturally very slow, I speak softly, slowly, God willing, we will meet in the next video. Thank you so much for staying with us, jazakAllah khair. Assalamu alaikum wa rahmatullah.