Texas Medicaid's Surety Bond for DME Providers

Most DME suppliers know the $50,000 Medicare surety bond. Texas Medicaid adds another one. Under the October 2026 Texas Medicaid Provider Procedures Manual (TMPPM), "all newly enrolling and re-enrolling durable medical equipment (DME) providers must, as a condition of enrollment and continued participation into Texas Medicaid, obtain a surety bond that complies with Title 1, Texas Administrative Code (TAC) §352.15." It is separate from the Medicare bond, it is per location, and it has to be renewed in a specific way every year.

Who needs the Texas Medicaid bond?

The rule, 1 Tex. Admin. Code 352.15(a), lets the state require a bond for each enrolled location from a provider type "identified by federal or state agencies to have a significant history of, or potential for, fraud, waste, or abuse," or from a specific provider based on its conduct. Texas applies it to DME providers as a class: the TMPPM's enrollment section and its DME handbook both require it of all newly enrolling and re-enrolling DME providers (and of non-government ambulance providers). An entity run by a federal, state, local or tribal government agency is exempt if it has had no uncollected Medicaid or CHIP overpayments in the preceding five years (352.15(d)).

This sits on top of a Medicare requirement: the TMPPM DME handbook says all DME providers "must be Medicare-certified before applying for enrollment in Texas Medicaid."

What must the bond say?

Combining the rule and the TMPPM:

• Amount: no less than $50,000 (352.15(f)) for each enrolled location. One bond is enough if a provider has more than one Medicaid DME enrollment record at the same practice location, such as a DME record and a specialized custom wheeled mobility record.
• Form: the State of Texas Medicaid Provider Surety Bond Form. "No other form will be accepted." The form makes HHSC the sole obligee.
• Parties: the provider as principal, HHSC as obligee, and the surety (352.15(e)(2)).
• Surety: licensed by the Texas Department of Insurance and holding a valid U.S. Treasury certificate of authority (352.15(e)(1)).
• Term: 12 months; the TMPPM says longer or shorter terms are not acceptable.
• Effective date: no later than the date the enrollment application is submitted, and no earlier than 12 months before it.
• Continuity: a continuous bond that stays in force from term to term unless canceled.
• Attachments: the bond form with signatures and a copy of the surety's power of attorney, at enrollment, revalidation or re-enrollment.

One wrinkle: the rule text says the bond must "include an effective date and expiration date" (352.15(e)(3)), while the TMPPM says "an annual bond that specifies effective and expiration dates for the bond is not acceptable" and requires a continuous bond. The practical answer is to have your surety use the state's own form, which is built to satisfy TMHP, and to ask TMHP if your surety's paperwork differs.

Why doesn't the Medicare bond count?

Because it names the wrong obligee. The TMPPM says surety bonds "obtained for the purpose of accreditation in the Medicare program, which lists the Centers for Medicare & Medicaid Services (CMS) as obligee, do not fulfill the surety bond requirement for Texas Medicaid." The Medicare bond under 42 CFR 424.57(d) protects CMS; the Texas bond protects HHSC. A Texas DME supplier enrolled in both carries both.

What does the surety promise HHSC?

Section 352.15(g) spells out the surety's liability. The surety is liable for uncollected overpayments that occurred during the bond's term, whenever they are discovered. It stays liable for two more years after expiration if the provider fails to furnish a renewed bond, and for two years after HHSC terminates the provider agreement, for services in the bond period. The provider cannot shrink that liability by canceling the bond, closing, selling the business, filing for bankruptcy or not paying the surety. The surety can end its liability only by giving HHSC written notice at least 30 days before termination, or when the provider furnishes a new compliant bond. And it must pay HHSC on written request, up to the bond amount.

How does annual continuation work?

Every year, the provider submits proof that the bond continues for a new 12-month term, before the expiration date of the bond on file. The TMPPM lists what the proof must include: the bond number; the principal's name, address and tax ID or NPI; the surety's name and address; the date of the original bond; and the new "good through" date. It needs original signatures of the provider's authorized corporate representative and the surety's attorney-in-fact; a scan, fax or copy can be sent while the original is pending. Proof can be uploaded in PEMS through a Maintenance, Practice Location, Surety Bond request.

The consequence of missing it is in the rule: HHSC "will not reimburse a provider for items or services furnished during a period in which the provider does not have a current surety bond" (352.15(c)), and the TMPPM warns of losing enrollment status. Put the continuation date on the same calendar as your state license renewals.

Which other Texas Medicaid rules matter for DME providers?

• Enrollment prerequisites in 1 Tex. Admin. Code 352.5 include an exclusion self-check of employees and owners, an NPI, meeting Medicare enrollment criteria, licensure or accreditation "to the extent required," consent to background checks and fingerprinting where required, a bond for each location where applicable, consent to unscheduled and unannounced site visits, and a compliance program certification.
• Revalidation: DME providers revalidate at least every five years, with screening repeated.
• Application fee: institutional providers that already paid it to Medicare or another state's Medicaid program submit proof instead of paying again.
• New locations: a moderate- or high-risk provider cannot render or bill services at a new practice location until TMHP approves it.
• No general state DME license: Texas has no general license for DME suppliers, though product-specific licenses can apply. See Texas DME requirements and does Texas require a DME license?

Which mistakes stop a Texas Medicaid DME enrollment?

1. Sending the Medicare bond, or a bond naming CMS.
2. Using the surety's own form instead of the State of Texas Medicaid Provider Surety Bond Form.
3. A bond dated more than 12 months before the application, or after it.
4. Leaving out the power of attorney.
5. One bond for two separate locations.
6. Applying before Medicare certification.

How do we help with Texas Medicaid?

Our Medicaid DME Enrollment service is $499 for Texas. We prepare the PEMS application and attachments from your Medicare file, give your surety agent the state's form and the TMPPM requirements, check the completed bond before it goes in, and calendar the annual continuation. We do not sell or broker bonds and take no commissions; the bond comes from your own licensed surety, and you pay the premium. Your authorized representative signs the application and the continuation proof. No one can promise enrollment or a date. See Medicaid DME enrollment for how other states compare.