A retailer of durable medical equipment (DME) sells products directly to the end consumer. If you are a DME retailer, you may need to obtain a license in each state in which you do business. Even if you’re a licensed pharmacy, you could still be required to obtain additional licensure to sell DME products.
Do I need a license to sell medical equipment?
Compliance is critical since DME suppliers are governed by stringent federal and state laws, especially if you participate in the Medicare/Medicaid program.
If you sell medical supplies at the retail level, here are some FAQs about the license requirements.
What does DME stand for?
DME stands for durable medical equipment.
What is durable medical equipment?
Durable medical equipment is equipment and supplies ordered by a health care provider for a patient to use every day or long-term.
According to Medicare, to be considered DME, a product would need to meet the following criteria:
- Durable (can withstand repeated use)
- Used for a medical reason
- Not usually useful to someone who isn't sick or injured
- Used in your home
- Generally has an expected lifetime of at least three years
Commonly used DME are walkers, wheelchairs, scooters, crutches, blood sugar meters, commode chairs, canes, oxygen tanks, CPAP machines, and hospital beds.
What is the process for obtaining a DME license?
The process for obtaining a DME license or registration varies from state to state and is typically administered by the state Board of Pharmacy. The license required can also differ depending on the type of equipment you’re selling and if your business holds a resident or non-resident DME license of the state in which you sell DME.
The DME license application process often involves:
- Verification of your corporate certificates: These include Certificates of Incorporation or Articles of Organization.
- Fingerprints of owners and corporate officers: These are used by the Federal Bureau of Investigation (FBI) and the state’s criminal bureau to conduct a fingerprint search.
- Proof of insurance: Needed for commercial liability, workers’ compensation insurance, and/or medical product liability.
- Current facility inspection report
- State license or registration
- Sales tax permit: Many states require DME retailers to register for sales tax even though DME is exempt.
You may also need to obtain accreditation from one of the 10 national accreditation services approved by the Center for Medicare & Medicaid Services (CMS).
Before you get started, verify the license required by your home state and any state in which you plan to operate a retail DME operation.
To get an idea of the license required, check out our DME licensing requirements Smart Chart.
What happens if I sell durable medical equipment without the proper license(s)?
Selling DME or home medical equipment (HME) without a proper license carries civil and criminal penalties. Furthermore, even if you or your employee’s set up or install DME, you and they must be properly licensed or risk significant fines.
What is DME accreditation?
If you wish to participate in the Medicare DMEPOS Competitive Bidding Program you must ensure that your enrollment records are up to date and reflect the necessary accreditation and DME license required for the products that you sell within a state.
(DMEPOS stands for Durable Medical Equipment, Prosthetics, Orthotics, and Supplies.)
If you have several locations, each must be accredited by a CMS-approved accrediting organization for the product items that you sell — before you bid for a product category. Your accreditation status is reported to the NSC (National Supplier Clearinghouse) by accreditation organizations, so it’s important that you get accredited early. CMS will not contract with DME retailers who are not accredited.
More information on the DMEPOS accreditation requirements, a list of accreditation organizations, as well as those persons who are exempt from accreditation can be found on the CMS website.
What other licenses and registrations will I need?
In addition to a DME license, there are other licensing, permit, tax, and other registrations that may be imposed on a DME business. Here are common requirements for most businesses:
- Basic business operation license. This is a license from the city in which your business will operate, or from the local county (if the business will be operated outside of the city's legal boundaries).
- Federal tax ID (FEIN) number. Issued by the IRS, the FEIN is also called a federal tax identification number or employer identification number and is required for almost all types of businesses.
- State tax ID. Issued by your state’s department of revenue or taxation, you will require a sales state tax ID number (also called a tax registration number).
- DBA/fictitious business name registration. The doing business as (DBA) or fictitious business name registration happens with the appropriate state or local jurisdiction.
- Zoning and land use permits. Local governments’ zoning laws may prohibit certain business activity in designated areas.
- Building permit. If you plan on remodeling or building a commercial space, you'll need to get a building permit.
- Sales tax license/sellers permit/resellers permit. This license/permit has many names (which vary by state), but it is required for the selling of almost all products and services.
- Workers’ Compensation Insurance. In most states, workers' compensation coverage is mandatory if you have at least one employee.
- DME Medicare and Medicaid billing registration. If you wish to participate in Medicare or Medicaid, additional registrations may be required. For more information on this and how to start a DME business, see Starting a durable medical equipment business: 3 things to consider.
Are renewals required?
Yes, DME retail licenses must be renewed, generally every one to two years.
How do I start a DME business? What are the initial steps?
As a DME retailer, you must register your business with the Food and Drug Administration (FDA). In addition, you will need to register your business in the states in which you intend to operate.
Also, check if your state has a specific license requirement for durable medical equipment retail sales.
To learn more about how CT Corporation can help you manage your business license needs, contact a CT Corporation Service Representative or call (844) 701-2064.