NASL Advocacy - DMEPOS Competitive Bidding Primer


Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) and DMEPOS Competitive Bidding


What is DMEPOS?


For Medicare purposes, durable medical equipment (DME) means equipment that:

  • Can withstand repeated use
  • Is used primarily and customarily to serve a medical purpose
  • Generally is not useful to a person in the absence of illness or injury
  • Is appropriate for use in the home

DME includes a wide range of products, such as:

  • Alternating pressure pads and mattresses (also known as support surfaces)
  • Blood glucose monitors or meters
  • Canes
  • Commodes
  • Continuous positive airway pressure (CPAP) devices
  • Crutches
  • Hospital beds (for home use)
  • Infusion pumps
  • Intermittent positive pressure breathing machines
  • Negative Pressure Wound Therapy (NPWT)
  • Oxygen equipment
  • Traction equipment
  • Vaporizers
  • Ventilators
  • Walkers
  • Wheelchairs


Prosthetics and orthotics (P&O) refers to "leg, arm, back, and neck braces [orthotics], and artificial legs, arms and eyes [prosthetics], including replacements if required because of a change in the patient’s physical condition."

The term prosthetic devices (sometimes used interchangeably with the term "prosthetics" and sometimes viewed as a subset of "prosthetics") corresponds to "prosthetic devices (other than dental) which replace all or part of an internal body organ (including colostomy bags and supplies directly related to colostomy care), including replacement of such devices, and including one pair of conventional eyeglasses or contact lenses furnished subsequent to each cataract surgery with insertion of an intraocular lens." Other examples of prosthetic devices include:

  • Cardiac pacemakers
  • Breast prostheses for post-mastectomy patients
  • Enteral and parenteral nutrition therapy


The term supplies (S) refers to items necessary for the effective use of DME. Examples of supplies include:

  • Oxygen
  • Test strips compatible with a patient’s blood glucose monitor or meter


How is DMEPOS used and why is it important?

DMEPOS products meet a wide range of Medicare beneficiary needs. Here are just a few examples:

  • Enteral nutrition products (considered prosthetic devices), administered through a nasogastric tube placed via the nose into the stomach or a percutaneous tube placed directly through the skin into the stomach or small intestine, provide essential nutrients to patients on a temporary or longer-term basis when they cannot otherwise get an adequate amount of nourishment by mouth. The inability to eat or swallow normally may be due to neurological problems such as stroke, brain injury, multiple sclerosis, polio, and Parkinson’s disease, or physical problems such as trauma to the head and neck, cancers of the oral cavity or throat, and complications of spinal surgery.
  • Medicare beneficiaries with diabetes use a blood glucose monitor (durable medical equipment), compatible test strips, and lancets (both considered supplies) to prick a finger or other body site, obtain a small blood sample, and check their blood sugar on the schedule recommended by their physician, which can be as often as three or more times a day. Test results help Medicare beneficiaries and their doctors manage their diabetes.
  • A CPAP device (durable medical equipment) is used to treat obstructive sleep apnea (OSA), a condition that causes individuals to stop breathing several times during the night. If left untreated, OSA disturbs normal sleep patterns, leading to daytime drowsiness that can cause accidents with motor vehicles and machinery. Medicare beneficiaries with OSA also face significant risks for cardiovascular disease and other ailments.
  • Hospital beds, wheelchairs, and walkers (all durable medical equipment) make it possible for ill or injured patients to compensate for their condition or injury, stay in their own homes, and preserve as much independence as possible. These products, especially hospital beds and wheelchairs, vary in their design and functionality, meaning that a Medicare beneficiary’s specific needs must be assessed in selecting the product best able to meet those needs.
  • Support surfaces, such as mattress replacement systems constructed of foam, air, gel, or water (durable medical equipment), help prevent or treat pressure or decubitus ulcers in bedridden patients, including those with limited mobility and those recovering from serious operations. If left untreated, pressure ulcers can lead to serious, even life-threatening complications, including localized infection, pain, depression, abscess and sinus tract formation, osteomyelitis (bone infection), blood poisoning (septicemia), and even maggot infestation.


Are all DMEPOS products subject to competitive bidding under Medicare?


No. Items eligible for competitive acquisition currently include:

  • Durable medical equipment other than class III devices (devices that sustain or support life, are implanted, or present potential unreasonable risk and are subject to premarket approval, the most stringent regulatory control)
  • Supplies necessary for the effective use of durable medical equipment other than inhalation drugs
  • Enteral nutrients, equipment and supplies
  • Off-the-shelf orthotics (that is, orthotics that require minimal self-adjustment for appropriate use and do not require expertise in trimming, bending, molding, assembling, or customizing to fit a beneficiary).


While reference is routinely made to DMEPOS competitive acquisition or bidding, prosthetics (P) are not subject to competitive bidding and enteral nutrients, equipment and supplies are the only prosthetic devices (also P) that are subject to competitive bidding.


What are some of the implications of DMEPOS competitive acquisition or bidding for Medicare beneficiaries?


  • Medicare beneficiaries in affected CBAs are only able to obtain competitively bid products from a limited number of winning (or contract) suppliers. This means that many beneficiaries are no longer be able to obtain affected products from their usual or the closest supplier, such as their local pharmacy. Physicians and other referral agents are no longer able to refer their patients to the DMEPOS suppliers they customarily and confidently recommend.
  • Geographic disparities limit access across the metropolitan area. For example, if the Washington, DC metropolitan area were a CBA, obviously it would be important to select winning suppliers from a wide range of jurisdictions, rather than simply assume that suppliers in say Montgomery County, Maryland or Fairfax County, Virginia could adequately meet beneficiary needs for the entire metropolitan area.
  • Winning DMEPOS suppliers could restrict the range of DMEPOS products they choose to offer to Medicare beneficiaries. This is more likely to occur given Medicare’s decision to set the payment amount for each HCPCS code at the midpoint of the array of winning bids, meaning that fully half of the winning bidders for each HCPCS code are paid less than the amount they bid for products described by that HCPCS code. Even if a supplier had planned to offer its usual or a relatively generous array of DMEPOS products, this payment outcome might prompt winning suppliers to limit beneficiary choice (for example, by offering only products with minimal functionality or low acquisition costs) in order to survive economically under the Medicare competitive acquisition program.
  • Beneficiaries requiring several different types of competitively bid DMEPOS products are no longer able to obtain all of the products they need from a single supplier (since different suppliers may be selected as contract suppliers for different product categories). A beneficiary released from a stay in a skilled nursing facility (SNF) for treatment following hip replacement surgery could be forced to find four different suppliers to arrange four different deliveries for a bed, support surface, scooter and a walker, where previously the beneficiary could have made a single call to be outfitted with these essential products.
  • Medicare beneficiaries traveling to competitive bidding areas face significant burdens. A beneficiary needing a DMEPOS product while visiting a competitive bidding area would need to know: (1) which DMEPOS products are subject to competitive bidding in that CBA; (2) identify and locate contract (winning) suppliers for that item; and (3) determine which of those suppliers offer the specific brand of product needed by the beneficiary.


Does the HCPCS coding system used to bill for DMEPOS products lead to additional concerns?


Yes. The HCPCS coding system further complicates the "product choice" situation.


  • In some cases, a single HCPCS code describes a wide range of products with significantly different functionalities. For example, a single code applies to nearly all blood glucose monitors, and another HCPCS code covers all the related test strips. However, blood glucose testing systems vary considerably in terms of their functionality. A brand of test strips is only compatible with its corresponding brand of blood glucose monitor, so test strips are not interchangeable. If a winning supplier under Medicare’s competitive acquisition program chooses to offer only a restricted set of test strip brands under HCPCS code A4253, beneficiaries using non-compatible brands of blood glucose monitors will not be able to obtain replacement test strips for these non-compatible brands from that supplier. They might even end up suffering the disruptive effects of switching to a different brand of blood glucose meter.
  • Problems with HCPCS coding were one reason why the Congress directed CMS to exclude negative pressure wound therapy from the Round 1 rebid process. MIPPA directed the Secretary of Health and Human Services to evaluate the existing HCPCS codes for negative pressure wound therapy to ensure accurate reporting and billing for items and services under these codes. As it now stands, a single HCPCS code, E2402, is used to describe a wide array of negative pressure wound therapy pumps, and a single HCPCS code, A6550, is available to describe a wide array of wound care dressing sets for negative pressure wound therapy.