DMEPOS Competitive Bidding Program

The DMEPOS Competitive Bidding Program was mandated by Congress through the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA). The statute requires that Medicare replace the current fee schedule payment methodology for selected Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) items with a competitive bid process. The intent is to improve the effectiveness of the Medicare methodology for setting DMEPOS payment amounts, which will reduce beneficiary out-of-pocket expenses and save the Medicare program money while ensuring beneficiary access to quality items and services.

Under the program, a competition among suppliers who operate in a particular competitive bidding area is conducted. Suppliers are required to submit a bid for selected products. Not all products or items are subject to competitive bidding. Bids are submitted electronically through a web-based application process and required documents are mailed. Bids are evaluated based on the supplier’s eligibility, its financial stability and the bid price. Contracts are awarded to the Medicare suppliers who offer the best price and meet applicable quality and financial standards. Contract suppliers must agree to accept assignment on all claims for bid items and will be paid the bid price amount. The amount is derived from the median of all winning bids for an item.

This program has started in 9 Round 1 areas and 91 Round 2 areas. Under this program, suppliers submit bids to provide certain medical equipment and supplies at a lower price than what Medicare now pays for these items. Medicare uses these bids to set the amount it pays for those equipment and supplies under the Competitive Bidding Program. 

NASL urges Congress to replace the flawed, existing DMEPOS Competitive Bidding Program with a market-based bidding system. The current program implemented by the Centers for Medicare & Medicaid (CMS) allowed for unqualified bidders to disproportionately influence final payment levels, which do not reflect the bid amounts submitted by entities capable of providing the products and services beneficiaries need from these competitive bidding categories. 

Final Rule issued 4/10/07
DMEPOS Competitive Bidding Primer
Interactive Map of Competitive Bidding Areas (CBAs)
Program Advisory and Oversight Committee (PAOC)
Summary of Market Pricing Program Bill (H.R. 6490)

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