Starting a home-based medical supplies business can be rewarding, both monetarily and emotionally. Helping someone with his medical condition is a satisfying experience. It's also a career that will experience growth as the U.S. population ages.

Step 1.

Acquire the necessary licenses and articles of incorporation to begin selling in your state. A medical provider must have an NPI (National Provider Identification) number in order to acquire inventory from medical supply vendors as well as to bill insurance companies. You will also need to be incorporated in the particular state in which you are doing business. Consult with an attorney who specializes in small businesses to determine which type of corporate entity to select for liability protection.

Step 2.

Contact vendors for the type of equipment you plan to dispense. Negotiate pricing and make sure they have an exchange or defective equipment policy in place. Although medical supplies are generally for patients with chronic conditions, such as sleep apnea or diabetes, that require equipment refills, a patient may require a different piece of equipment or experience an unexpected problem. Make sure that there is a reimbursement procedure to avoid out-of-pocket costs.

Step 3.

Establish a working relationship with a doctor's office or facility that will require the type of supplies you will be dispensing. For instance, if you want to specialize in diabetic supplies, partner with an endocrinology clinic. The doctor will provide the prescription and referral, indicating the medical necessity for the item and the contact and insurance information you will need for billing purposes.

Step 4.

Contract with insurance providers in your state as well as federally. Local HMO (Health Maintenance Organization) insurers as well as PPO (Preferred Provider Organization) plans will ultimately be paying you, so you will need to contact them to get their fee schedules (reimbursement rates). Establish your UCR (Usual, Reasonable and Customary) pricing for each piece of equipment, then determine what you will accept as a contracted provider. If you become the preferred provider for a local HMO, patients will be referred to you via their insurance plan. Therefore, you might consider offering competitive pricing in order to get the contract and a guaranteed patient base.

Step 5.

Familiarize yourself with billing codes. A CPT (Current Procedural Terminology) code indicates the procedure or item you will be billing for. An ICD-9 (International Classification of Diseases, 9th Revision) code is the patient's diagnosis. Insurance companies use these for billing. If you provide coding for the wrong diagnosis or incorrect procedure, your claim will be denied.

Step 6.

Acquire a medical software program to streamline the billing process and go paperless. While sending paper claims to insurance companies will get you paid, electronic billing allows the process to be instantaneous and protects patient information. You will know immediately if your claim has been denied, and having the patient's medical information scanned and available in a protected file makes compliance with HIPAA (Health Insurance Portability and Accountability Act) much easier.


Using a proprietary medical software program also makes follow-up with patients easier as it can alert you to specific intervals when the patient is eligible for new supplies under her insurance coverage.