DME Companies For Sale - Buy An Existing DME Company?
Buy a DME Company? | Risks, Costs & Compliance Tips
Searching for DME companies for sale? Or wondering if it’s smarter to start a DME company from scratch? In this video, we break down everything you need to know before making this critical business decision.
Whether you’re considering the fast track by choosing to buy a DME company or taking the more controlled path of building your own, there are serious compliance, licensing, and operational factors you need to consider. From avoiding inherited liability to understanding startup costs and accreditation requirements, we cover it all.
Pros
- Immediate Operations: Acquiring an established company allows for immediate business operations, leveraging existing infrastructure, staff, and customer relationships.
- Established Revenue Streams: An existing client base and revenue history can provide a predictable income flow.
- Pre-existing Accreditations and Licenses: The company may already have necessary accreditations and licenses, saving time and resources.
Cons
- Price of Investment:
A newly established DME company with no billing history typically has a starting asking price ranging from $75,000 to $150,000, depending on several key factors. These include the scope of products and services offered, the number of states in which the company is licensed to operate, and the extent of payer enrollments such as Medicare, state Medicaid programs, and commercial insurance networks. - Assumption of Risk in Purchasing an Existing DME Company:
Purchasers of an existing Durable Medical Equipment (DME) company should be aware that they may inherit liabilities associated with the prior owner’s billing practices. If the previous owner engaged in improper or fraudulent billing, whether disclosed or undisclosed such conduct may subject the new owner to investigation, recoupment demands, civil penalties, or exclusion by the Centers for Medicare & Medicaid Services (CMS) and other regulatory agencies. - Potential UPIC Audits: If the company has a history of billing irregularities, it may be subject to UPIC audits, which can be time-consuming and financially draining.
- Lack of Experience in the DME Industry: Inexperience in the Durable Medical Equipment (DME) industry can be a critical liability. Observing others succeed in the space may create a false sense of simplicity, but assuming you can replicate their success without a strong foundation in compliance, billing, and operational standards is a recipe for failure. The DME sector is highly regulated, and without industry-specific knowledge, new owners are far more likely to face costly missteps, audit exposure, and business instability.
Start a DME Company? | Startup Advice Less Than $25,000.00
Pros
Affordability: Building Your Own DME Company
If you’re exploring the Durable Medical Equipment (DME) industry, one of the first decisions you’ll face is whether to buy a DME company or launch your own DME startup company. In this video, we’ll help you weigh the pros and cons of both paths—so you can make a smart, compliant, and financially sound choice.
We’ll dive into what to look for when searching for DME companies for sale, how to avoid hidden liabilities, and what it really takes to start a DME company from the ground up. From startup costs and payer enrollments to Medicare compliance and UPIC audit risks, this video is your complete guide.
Establishing your own Durable Medical Equipment (DME) company can often be more cost-effective than purchasing an existing business. Let’s break down the typical startup costs:
- Articles of Incorporation: $50.00 to $1,000.00, depending on your state and whether you file directly or use a third-party service. You can easily file these yourself through your state’s Division of Corporations. Estimate $500.00
- Employer Identification Number (EIN): $0.00 if you file the Articles of Incorporation yourself. The EIN can be obtained for free from the IRS website.
- Lease of Office Space: As of early 2025, the national average asking rent for office space is approximately $33.42 per square foot annually. For a 200-square-foot office, this equates to approximately $6,684 per year, or $557 per month. It is advisable to have a six-month lease reserve available at startup. $3,350.00 first six months
- Utilities (Electricity, Water, Sewer, Internet): For a 200-square-foot office, average annual utility costs are estimated at approximately $450, depending on location, building efficiency, and usage. $2,700.00 first six months
- Licensing: Business Tax Receipts and state-specific licenses may be required. Notably, 44 states do not require a state HME license for mail-order DME products and services. Local business tax receipts, if applicable, typically cost less than $500. This should be considered a minor initial expense.
- Accreditation: Accreditation costs generally range from $6,000 to $7,500, depending on the scope of products and services you intend to offer.
- General Liability Policy: $1M/$3M – $1,250.00 Annually
- Surety Bond: Depending on Credit $500.00 to $2,500.00 Calculation of $1,250.00 for this example
- Cost of QPI Healthcare Services: Guiding you through the process of accreditation, education, applications, registrations and thorough implementation of Policies and Procedures. Access to Q-University’s The DME Training Center. $850.00 per month. $5,100.00 first six months.
- Clean Slate: Medicare enrollment is tied directly to your Social Security Number, making you personally accountable for the compliance, integrity, and overall health of your business. If you purchase an existing DME company and do not apply for a new Medicare Provider Transaction Access Number (PTAN), you assume full liability for any past billing activities, whether compliant or not. In such cases, the risks may far outweigh the benefits. Moreover, the processing time for obtaining a new PTAN is virtually the same whether you’re purchasing a company or starting one from scratch. Therefore, purchasing an existing DME company offers little to no advantage from a Medicare enrollment perspective.
Cons
- No Immediate Revenue: Building a customer base and revenue stream from scratch requires significant effort and time.
- Q-University’s DME Training Center will provide you with tools to learn how to begin generating income from private pay sources. Such as Skilled Nursing Facilities, Assisted Living Facilities, Clinic Groups and more.
- Lavear H.A.R.P. Light Technology software systems will enhance your experience with true compliance at your fingertips.
QPI's Recommendation on DME Companies For Sale
Recommendations – DME Companies For Sale
Given the lack of transparency often associated with DME companies for sale, particularly regarding billing history and potential UPIC audits, starting a new DME company may offer greater control and significantly lower risk. By building your operation from the ground up, you can implement fully compliant practices from day one, helping you avoid future audits, recoupments, and penalties that may result from inherited liabilities.
If considering purchasing an existing company, it’s crucial to:
- Conduct Thorough Due Diligence: Review all financial records, billing practices, and compliance histories.
- Assess Audit Risks: Investigate any past or ongoing audits, especially UPIC audits, and understand their implications.
- Consult with Legal and Compliance Experts: Seek professional advice to identify potential liabilities and ensure a smooth transition.
Ultimately, the decision should align with your risk tolerance, financial capacity, and long-term business goals.
