Do DME retailers need a state license?
If you sell DME, you may need a license in each state where you do business. Each state sets its own requirements, and a license in one state does not cover you in another.
State laws and agencies use different names for the license a DME retailer needs, including DME retailer, DME supplier and home medical equipment (HME) provider. Because the name does not always include the term DME, confirm what your state calls the license that covers your products.
The label matters less than the activity. A state’s definition of what you do determines which license applies and whether you need one at all. Depending on the state, the answer can depend on several factors, such as:
- Whether you sell prescription (legend) medical devices or non-prescription devices
- The type of equipment you provide
- Who the equipment is sold or rented to
- Whether the equipment is provided with, or typically requires, home medical equipment services such as delivery, setup, maintenance or patient instruction
- Whether you ship products directly to customers in other states
State definitions vary considerably, so confirm the requirements in each state where you do business. For state information, see Durable medical equipment licensing requirements.
DME licensing is typically administered by the state Board of Pharmacy, and the process varies from state to state. The license you need can depend on the type of equipment you sell and on whether your business holds a resident or non-resident license for that state. A resident license generally applies to businesses located in the state. A non-resident license generally applies to businesses located elsewhere that sell DME into the state.
A pharmacy license may not cover DME. Depending on the state, a licensed pharmacy may be exempt from separate DME licensure, may need an additional DME license or may need to update its existing pharmacy license to cover DME products.
Selling across state lines and online
In some states, any supplier that provides DME to a consumer in the state needs a license, even if the supplier is based elsewhere. This can include online and mail-order sales.
Requirements for out-of-state suppliers vary. Some states issue non-resident licenses, some require a physical location in the state and some exempt certain products or mail-order sales.
How the DME licensing process works
Application requirements differ by state, but many DME license applications involve the following:
- Verification of your corporate documents, such as Articles of Incorporation or Articles of Organization
- Fingerprints of owners and corporate officers, which the Federal Bureau of Investigation (FBI) and the state’s criminal bureau use to run a fingerprint search
- Proof of insurance, which can include commercial liability, workers’ compensation and medical product liability coverage
- A current facility inspection report
- Any other required state license or registration
- A sales tax permit, where your state requires one
Sales tax registration requirements, and how DME is treated for sales tax purposes, vary by state. Check with your state’s department of revenue for details.
DME license renewals
DME licenses must be renewed, generally every one to two years. Renewal requirements, deadlines and fees are set by each state, so track them separately for every state where you are licensed. Medicare accreditation and enrollment are separate from state licensing and have their own timelines.
What happens if I sell DME without the proper license?
Selling, setting up, or installing DME without the proper license can result in fines and cease-and-desist orders. The specific penalties depend on the state.
Operating without a license can also make it harder to get licensed later. State regulators may refuse or delay future license applications. Many applications ask about discipline in other states, and regulators can look up reported discipline in national databases. A violation in one state can therefore mean added questions and slower approvals in others.
In cases of serious or intentional violations, some states may bring criminal charges against the company and, in some cases, its officers or executives.
Becoming a DMEPOS supplier for Medicare reimbursement
A state license allows you to legally sell DME in that state, subject to any product-specific, prescription or shipping rules. If you want to bill Medicare, additional federal requirements apply. Medicaid enrollment is handled by each state, so check with your state Medicaid agency if you plan to participate.
Accreditation
DMEPOS suppliers must be accredited by an accrediting organization approved by the Centers for Medicare & Medicaid Services (CMS) to enroll in and bill Medicare, unless they are exempt. Accreditation confirms that the supplier meets the DMEPOS quality standards, and it must be completed before you submit your Medicare enrollment application.
Since January 1, 2026, suppliers must be resurveyed and reaccredited at least once every 12 months. This replaces the previous 36-month cycle. Suppliers accredited under the old cycle move to the annual schedule when their current accreditation period ends, and suppliers accredited for the first time on or after January 1, 2026 are on the annual schedule from the start. Accreditation surveys are unannounced.
Each supplier location must be separately accredited, and the accreditation must cover the specific products and services you provide. If you add a new product category after enrolling, notify your accrediting organization so it can survey and accredit that category. Your accrediting organization and your national provider enrollment contractor that processes your application operate independently. Compliance with one does not guarantee compliance with the other.
Certain eligible professionals, other persons and products are generally exempt from accreditation, and pharmacies may apply for an exemption by submitting an attestation to the enrollment contractors. CMS lists the exemptions in its MLN fact sheet on DMEPOS accreditation.
Enrollment
To bill Medicare, you need a National Provider Identifier (NPI), a 10-digit identifier issued through the National Plan and Provider Enumeration System (NPPES). CMS requires an NPI for each practice location.
You then apply for enrollment through the Provider Enrollment, Chain, and Ownership System (PECOS), CMS’s online enrollment system. There is also the option of using the paper CMS-855S application. On the application, you certify that you meet the DMEPOS supplier standards in 42 CFR § 424.57. These standards include complying with state licensure requirements, carrying liability insurance and maintaining a physical location that meets CMS criteria.
Every practice location must be enrolled separately. DMEPOS suppliers must also obtain a $50,000 surety bond for each NPI they bill under.
Once enrolled, you must report any change to your enrollment information to your national provider enrollment contractor within 30 days, including changes to your accreditation. Changes include, but are not limited to:
- A change in ownership
- An adverse legal action
- A change in practice location
A change in ownership can also affect your accreditation and enrollment. A merger, acquisition or sale does not transfer accreditation, so notify your accrediting organization and enrollment contractor within 30 days of the effective date. In some cases, a change in majority ownership within 36 months of enrolling requires the new owner to enroll as a new supplier and be surveyed and accredited.
DMEPOS suppliers must also revalidate their enrollment every three years, which is separate from reaccreditation.
Competitive bidding
Medicare’s DMEPOS Competitive Bidding Program has been in a temporary gap since January 1, 2024. CMS is preparing the next round, Round 2028, a nationwide program for certain items that suppliers typically ship to patients’ homes. Suppliers compete to become contract suppliers by submitting bids to furnish those items throughout the nationwide competitive bidding area. CMS has announced that bidder registration opens on December 1, 2026, and the bid window opens on January 5, 2027.
Bidders are responsible for verifying the state and territory licenses they need before bidding and obtaining them by the applicable deadline, and those licenses must be current and in good standing in PECOS by the close of the bid window. A supplier that does not meet all applicable licensure requirements is not eligible for a contract.
Learn more
To learn more about how CT Corporation can help you manage your business license needs, contact a CT Corporation business license specialist.
