1. DMEPOS Competitive Bidding Program
The Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program
This presentation explains the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program.
This training presentation was developed and approved by the Centers for Medicare & Medicaid Services (CMS), the federal agency that administers Medicare, Medicaid, the Children’s Health Insurance Program (CHIP), and the Federally-facilitated Health Insurance Marketplace. The information in this presentation was correct as of April To check for an updated version visit CMS.gov/outreach-and- education/training/cmsnationaltrainingprogram/index.html.
May 2016

2. Competitive Bidding—A Better Way to Pay
Started in January 2011 for certain durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) in 9 areas of the country (Round 1)
In July 2013
The program expanded to more areas (Round 2)
The National Mail-Order Program was implemented
Limits fraud and abuse in the Medicare program
The Competitive Bidding Program helps people with Medicare
Save money
Get quality equipment, supplies, and services
In January 2011, Medicare started a new Competitive Bidding Program for certain DMEPOS in 9 areas of the country. These nine areas are referred to as the Round 1 areas. The Competitive Bidding Program supplier contracts in Round 1 areas ended on December 31, On January 1, 2014, Medicare started new contracts with suppliers in these 9 competitive bidding areas.
In July 2013, Medicare expanded the Competitive Bidding Program to more areas of the country, called the Round 2 areas, and also implemented a National Mail-Order Program for diabetes testing supplies.
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3. The Competitive Bidding Program
Suppliers submitted bids to provide certain DMEPOS at lower prices than Medicare was paying
Contracts are awarded to winning suppliers to sell/rent DMEPOS
Amount Medicare pays for DMEPOS is based on bids
When Medicare pays less, the 20% coinsurance is less
Contract suppliers must
Meet eligibility, quality, and financial standards
Be accredited by an independent organization
Under the DMEPOS Competitive Bidding Program, people with Original Medicare who live in one of the competitive bidding areas (CBAs), and use equipment or supplies included under the program (or get the items while visiting a CBA), generally must use Medicare contract suppliers if they want Medicare to help pay for an item. DMEPOS suppliers that want to provide certain DMEPOS items and services in a CBA must submit a bid to be considered for a contract to sell or rent to people with Medicare.
In addition to saving money for the Medicare program (and taxpayers), the program helps save people with Original Medicare money because when Medicare pays less, the 20% coinsurance payment is less too.
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4. The Competitive Bidding Program—Continued
In most cases, only contract suppliers can
Provide competitively bid DMEPOS
The types of items Medicare covers doesn't change
Contract supplier charge can’t exceed single payment amount based on bids received for an item
In most cases, under the Competitive Bidding Program, only contract suppliers can provide certain DMEPOS items to people with Original Medicare in CBAs and file claims with Medicare for payment.
However, there are a few exceptions, like getting equipment or supplies from a "grandfathered" supplier, or getting certain equipment or supplies from doctors or hospitals—these exceptions will be discussed later.
For people with Medicare living in a CBA, it’s important to make sure that the items they receive are competitively bid items from a supplier that Medicare can pay to provide them—usually a contract supplier. If a person with Medicare obtains a competitively bid item in a CBA and doesn’t use a contract supplier, Medicare probably won’t pay for the item and that person will likely pay full price. A person can continue to use any Medicare- enrolled suppliers for DMEPOS items that aren’t included in the program.
Contract suppliers can’t charge more than the single payment amount set by Medicare based on the bids received for an item, and this price can’t be higher than the Medicare fee schedule allowed amount.
Under this program, suppliers submit bids to provide certain medical equipment and supplies at a lower price than what Medicare pays for these items now. The bids from winning suppliers are used to set a “single payment amount” for each item which replaces the “fee schedule” amount. The “single payment amount” must be lower than the “fee schedule allowed amount.” All suppliers are thoroughly screened to make sure they meet Medicare requirements before they’re considered for contract award. Contracts are only awarded to qualified suppliers that meet Medicare’s eligibility, quality, and financial standards, and that are accredited by an independent accrediting organization.
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5. Round 1 Recompete Products 1/1/14-12/31/16
Products Included in Round 1 Recompete
Respiratory equipment and related supplies and accessories including
Oxygen, oxygen equipment and supplies; Continuous Positive Airway
Pressure (CPAP) devices and respiratory assist devices (RADs) and related
supplies and accessories; and standard nebulizers
Standard mobility equipment and related accessories including
Walkers, standard power and manual wheelchairs, scooters, and related
accessories
General home equipment including
Hospital beds and related accessories, group 1 and 2 support surfaces,
transcutaneous electrical nerve stimulation (TENS) devices, commode chairs,
patient lifts, and seat lifts
Enteral nutrients, equipment, and supplies
Negative pressure wound therapy pumps and related supplies and accessories
External infusion pumps and supplies
CMS is required by law to recompete contracts under the DMEPOS Competitive Bidding Program at least once every 3 years. The Round 1 Rebid contract period for product categories, with the exception of Round 1 Rebid competitions for mail-order diabetes testing supplies (which concluded on December 31, 2012) for 6 categories expired on December 31, CMS conducted the Round 1 Recompete for 6 product categories in the same competitive bidding areas as the Round 1 Rebid. The Round 1 Recompete contracts and prices were effective on January 1, 2014, and expire on December 31, There are some additional items, and certain similar items and accessories have been grouped into larger, more consolidated product categories.
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6. Competitive Bidding Program
Round
Required by law to recompete contracts at least once every 3 years
Current Round 1 Recompete contracts and prices expire on December 31, 2016
Contracts and prices for next period to become effective on January 1, 2017
On April 21, 2015, CMS announced plans to recompete the supplier contracts awarded in the Round 1 Recompete of the DMEPOS Competitive Bidding Program.
As previously mentioned, the Round 1 recompete contract period expires on December 31, Round contracts and prices are scheduled to become effective on January 1, 2017.
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7. Round 2 Competitive Bidding
Contracts and prices
Were effective on July 1, 2013
Expire June 30, 2016
Program expanded
91 Metropolitan Statistical Areas
The Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) required the competition for Round 2 to occur in 2011 in 70 metropolitan statistical areas (MSAs) and authorized competition for national mail-order items and services after The Affordable Care Act of 2010 expanded the number of Round 2 MSAs from 70 to 91. Round 2 contracts and prices started on July 1, 2013.
CMS also conducted a national mail-order competition for diabetes testing supplies at the same time as the Round 2 competition. The national mail-order CBA includes all parts of the United States, including the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, and American Samoa.
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8. Products Included in Round 2*
Oxygen, oxygen equipment, and supplies
Enteral nutrients, equipment, and supplies
Continuous Positive Airway Pressure (CPAP) devices and Respiratory Assist Devices (RADs), and related supplies and accessories
Hospital beds and related accessories
Walkers and related accessories
Support surfaces (Group 2 mattresses and overlays)
Standard (power and manual) wheelchairs, scooters, and related accessories
Negative pressure wound therapy pumps and related supplies and accessories
These are the competitive bidding product categories included in Round 2. Most of the products included in Round 1 were also included in Round 2. Medicare also bid some additional items in Round 2.
*Changes from Round 1 to Round 2 in Bold Italics
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9. National Mail-Order Program for Diabetes Testing Supplies
Designed to ensure that people with Original Medicare continue to get quality supplies and save money
People who choose to have diabetes testing supplies delivered to their home need to know
Medicare won't pay unless a national mail-order contract supplier is used
National mail-order contract suppliers can’t charge more than the deductible and 20% coinsurance
People can also choose to get supplies from any local store enrolled in Medicare
Local stores can’t charge more than the deductible and 20% coinsurance if they accept assignment
This program is designed to ensure that people with Original Medicare continue to get quality supplies while saving money. The term mail-order means items shipped or delivered at home by a variety of delivery methods. Under the National Mail-Order Program, a Medicare national mail-order contract supplier must be used for Medicare to pay for diabetes testing supplies that are delivered at home. People who don’t want their diabetes testing supplies delivered at home can go to any local store that’s enrolled with Medicare and buy them there. Due to requirements in the Medicare law, Medicare’s allowed payment amount is the same for mail-order and non-mail-order diabetes testing supplies. National mail-order contract suppliers can’t charge more than the deductible and 20% coinsurance. Local stores also can’t charge more than the deductible and 20% coinsurance if they accept assignment, which means they accept Medicare’s allowed amount as payment in full.
The National Mail-Order Program prohibits contract suppliers from influencing or incentivizing people to switch their current glucose monitor and testing supplies brand to another brand. This prohibition is called the anti-switching rule. The anti-switching rule requires contract suppliers to provide the brand of testing supplies that works with the consumers glucose monitor. If the contract supplier doesn't carry that brand of testing supplies, the consumer may ask the contract supplier about alternative brands. However, the supplier can’t be the one to initiate this conversation.
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10. Round 2 Recompete & National Mail-Order Recompete
Round 2 and National Mail-Order Program
Contract periods expires on June 30, 2016
Round 2 Recompete and the national mail- order recompete contracts
Become effective on July 1, 2016
Expire on December 31, 2018
As previously mentioned, CMS is required by law to recompete contracts under the DMEPOS Competitive Bidding Program at least once every 3 years. The Round 2 and National Mail-Order Program contract periods expire on June 30, Round 2 Recompete and the national mail-order recompete contracts are scheduled to become effective on July 1, 2016, and expire on December 31, 2018.
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11. Round 2 Recompete Products 7/1/16-12/31/18
Products Included in Round 2 Recompete
Enteral nutrients, equipment, and supplies
General home equipment and related supplies and accessories including
Hospital beds and related accessories, group 1 and 2 support surfaces,
commode chairs, patient lifts, and seat lifts
Nebulizers and related supplies
Negative Pressure Wound Therapy (NPWT) pumps and related supplies and accessories
Respiratory equipment and related supplies and accessories including
oxygen, oxygen equipment, and supplies, continuous positive airway pressure (CPAP) devices and respiratory assist devices (RADs) and related supplies and accessories
Standard mobility equipment and related accessories including
Walkers, standard power and manual wheelchairs, scooters, and related
accessories
Transcutaneous Electrical Nerve Stimulation (TENS) devices and supplies
CMS is conducting a Round 2 Recompete for 7 product categories in the same geographic areas that were included in Round 2. Most Round 2 Recompete MSAs have 1 CBA. However, the 3 largest MSAs (Chicago, Los Angeles, and New York,) are subdivided into multiple CBAs, and CBAs in multi-state MSAs have been defined so that there are no multi-state CBAs. As a result, 117 CBAs are in the Round 2 Recompete.
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12. The Competitive Bidding Program— Who will be Affected?
People who have Original Medicare and
Permanently reside in, or are visiting, a Competitive Bidding Area (CBA) and obtain competitively bid items
To find out if a ZIP code is in a CBA or to locate a contract supplier
Visit Medicare.gov/supplier, or
Call MEDICARE ( )
TTY users call
Medicare Advantage Plans should let their enrollees know if their plan is changing
The Competitive Bidding Program applies to people who have Original Medicare and whose permanent residence is in a ZIP code that is part of a competitive bidding area (CBA), or if they get certain items while visiting a CBA. A permanent residence is the address where Social Security mails a person’s benefits check.
The National Mail-Order Program CBA includes all ZIP codes in all parts of the United States.
To find out if a ZIP code is in a CBA, visit Medicare.gov/supplier or call MEDICARE ( ). TTY users call
Members of Medicare Advantage Plans, can use any suppliers designated by that plan. The plan will notify its members if the supplier is changing. You may also contact the plan to find out if there is a change.
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13. Doctors and Other Treating Practitioners Use of Contract Suppliers
Must almost always use contract supplier if
Items and services are included in Competitive Bidding Program where a person with Original Medicare lives
Someone is traveling to or visiting a competitive bidding area
Doctors, treating practitioners, and hospitals can supply certain items (e.g.: walkers and folding manual wheelchairs) without being contract suppliers
A nursing facility can supply directly to its own residents only if it becomes a contract supplier
If the equipment or supplies ordered by a doctors or treating practitioner are included in the Competitive Bidding Program where a person with Original Medicare lives or visits, they must almost always get equipment or supplies from a contract supplier for Medicare to help pay. Treating practitioners include physician assistants, clinical nurse specialists, and nurse practitioners.
However, doctors or treating practitioners can sometimes supply a walker or folding manual wheelchair when someone is getting other medical care, even if the doctor or practitioner isn’t a contract supplier. Similarly, if a person is hospitalized and needs a walker or folding manual wheelchair, the hospital can supply these items while the person is admitted or on the day of discharge from the hospital. The Medicare payment amount will be the new, lower competitive bidding payment amount.
A skilled nursing facility or nursing facility may be able to supply certain equipment or supplies directly to its own residents if it becomes a contract supplier. If the facility doesn't become a contract supplier, it must use a contract supplier from the CBA.
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14. Staying With A Non-Contract Supplier
A consumer can stay with current supplier that doesn’t have a new contract, provided that
Supplier elects to become “grandfathered”
The person with Original Medicare permanently resides in a competitive bidding area
The person with Original Medicare was renting certain equipment or oxygen when the program (or recompeted round) started
People with Medicare who’re renting certain medical equipment or receiving oxygen or oxygen equipment that’s paid on a monthly basis when the program starts, may have the choice to stay with their current supplier, even if that supplier isn't a contract supplier. Suppliers that don’t get Medicare contracts can elect to become “grandfathered” suppliers and continue to rent equipment to people with Medicare if they were renting the equipment when the program began. This rule applies only to oxygen, oxygen equipment, and certain rented equipment. The person with Original Medicare may continue using the “grandfathered” supplier until the rental period for the equipment ends.
Medicare won’t pay for the new equipment rented from a “grandfathered” supplier after the program starts. If a person with Medicare is renting equipment that’s eligible for grandfathering, the supplier will notify consumers in writing 30 business days before the program begins whether it will or won’t become a “grandfathered” supplier.
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15. Competitive Bidding Program
Grandfathering
Non-contract supplier
Must inform Medicare consumers in writing about whether they’ll continue renting equipment
Works with contract supplier to get new equipment if Medicare consumers switch to a contract supplier
The choices are
Continue getting services from a grandfathered supplier until rental period ends OR
Switch to a new contract supplier
“Grandfathered” suppliers must provide people who are renting certain durable medical equipment or receiving oxygen or oxygen equipment with written notice at least 30 business days before the start of the program. This notice should ask whether the person wants to continue renting the equipment from the grandfathered supplier. The person may continue using a grandfathered supplier until the rental period for the equipment ends. For those who use oxygen and decide to use a grandfathered supplier, the Medicare payment amount will be the new, lower competitive bidding payment amount. If a person uses other rented durable medical equipment, the Medicare payment amount will be either the competitive bidding payment amount or the current amount, depending on the particular type of item rented. Ask the grandfathered supplier what the copayments will be if that supplier would continue to be used instead of switching to a new contract supplier.
If the choice is not to continue using the grandfathered supplier, or the supplier chooses not to become a grandfathered supplier when the new contracts go into effect, the person with Original Medicare generally must use a contract supplier for Medicare to help pay.
A supplier that decides not to become a grandfathered supplier is required to the pick up items from the person’s home after the program begins and the person has been notified. The supplier must provide notification 3 times before it can pick up the item:
The supplier must send the person a letter at least 30 business days before the program begins indicating that it’ll no longer provide rental items after a certain date. This letter will include the date on which a new Medicare contract supplier must begin to provide the rented item.
Before the supplier can pick up its equipment, they must call the person 10 days prior to picking up the item.
The supplier must call again 2 business days prior to picking up the item.
When someone changes to a Medicare contract supplier, the old supplier should work with the contract supplier so there isn’t a break in service. If a person switches to a new contract supplier instead of using a grandfathered supplier, this may extend the rental period and result in additional months of coinsurance.
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16. Competitive Bidding Program
Have Other Insurance?
Medicare may make payment to a non- contract supplier if required by primary policy
Non-contract supplier must
Be accredited
Have a valid Medicare billing number
Be eligible to receive secondary payments
Some people have both Medicare and other insurance. If a primary insurance policy requires use of a non-contract supplier, Medicare may make a secondary payment to a non-contract Medicare-enrolled supplier if required by the policy. The supplier must be accredited, have a valid Medicare billing number, and be eligible to receive secondary payments. The benefits administrator, insurer, or plan provider can provide more information.
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17. Non-contract Supplier
A non-contract supplier generally may not provide competitively bid items in a competitive bidding area
If a non-contract supplier is used and no exception applies, people with Medicare aren’t responsible for payment unless the supplier issues an Advance Beneficiary Notice (ABN)
By signing the ABN, the person with Medicare agrees to pay entire amount
Non-contract suppliers may not provide competitively bid items to people with Original Medicare who live in or visit a competitive bidding area unless they’re a “grandfathered” supplier or fall under one of the other exceptions we’ve discussed.
If a non-contract supplier in a competitive bidding area provides a competitively bid item to a person with Medicare and no exception applies, that person isn’t responsible for payment unless the supplier gives an Advance Beneficiary Notice (ABN).
As a reminder, this notice says Medicare won’t pay for the item or service. Signing an ABN means agreeing to pay the entire amount for the item or service. If a person doesn’t sign an ABN, they aren’t responsible for payment for the item or service.
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18. Changing Suppliers Scenario
Obtaining DMEPOS items from a new contract supplier
Mildred’s permanent residence is in Miami, FL, which is a Round 1 Competitive Bidding Area. She’s currently renting her Continuous Positive Airway Pressure (CPAP) device from ABC Company, which has a Round 1 Recompete contract, but not a Round contract. Mildred receives a notice from ABC Company informing her that they won’t be a contract supplier after December 31, 2016, and that they also won’t be a grandfathered supplier starting January 1, Mildred must transition to a Round contract supplier for Medicare to help pay.
Changing Suppliers Scenario
Obtaining DMEPOS items from a new contract supplier
Mildred’s permanent residence is in Miami, FL which is a Round 1 Competitive Bidding Area. She’s currently renting her Continuous Positive Airway Pressure (CPAP) device from ABC Company. ABC Company has a Round 1 Recompete contract, but not a Round contract. ABC company decides not to become a grandfathered supplier. Mildred receives a notice from ABC Company informing her that they won’t be a contract supplier after December 31, 2016, and that they also won’t be a grandfathered supplier. Mildred must transition to a Round contract supplier for Medicare to help pay. ABC Company must give Mildred 2 additional notices before picking up its equipment. These notices should occur 10 days and 2 days before the equipment is picked up. ABC Company and Mildred’s new contract supplier must coordinate with Mildred to pick up her current CPAP device and deliver the new one.
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19. Getting DMEPOS When Travelling
To Competitive Bidding Areas (CBAs)
Must generally use contract supplier for that CBA
If non-contract supplier used and no exception applies, people with Medicare aren’t responsible for payment unless supplier issues Advance Beneficiary Notice
To non-competitive bidding areas
Can use any Medicare-enrolled supplier
When people with Original Medicare travel to or visit a Competitive Bidding Area (CBA) and need to get equipment or supplies that are part of the Competitive Bidding Program for that CBA, they must almost always get those items from a contract supplier for that CBA.
Remember, if a non-contract supplier in a CBA provides a competitively bid item and no exception applies, the person receiving the item isn’t responsible for payment unless the supplier issues them an Advance Beneficiary Notice.
People who travel to a non-CBA can use any Medicare-enrolled supplier.
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20. Competitive Bidding Program
Specific Brands
Doctor must prescribe in writing
Medical record must reflect need
Contract supplier must
Provide the specific brand or form as prescribed OR
Work with the doctor or treating practitioner to find a suitable alternative and obtain a revised prescription OR
Help locate another contract supplier that can Provide the specific brand or form as prescribed
The Competitive Bidding Program has special protections to make sure people get the specific types of medical equipment they need to protect their health. For a specific brand of equipment or supplies, or an item in a specific form, the doctor must prescribe the specific brand or form in writing. The doctor must also document in the medical record that the person needs this specific item or supply for medical reasons.
In these situations, a Medicare contract supplier is required to: provide the exact brand or form of item the doctor prescribed; or work with the doctor to find an alternate brand or form that’s safe and effective, and obtain a revised prescription; or help the person find another contract supplier that offers the brand or form prescribed.
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21. Equipment Repair & Replacement
For beneficiary-owned medical equipment
Any Medicare-enrolled supplier can make necessary repairs
For replacement, must use a contract supplier
For warranty repairs, follow the warranty rules
For rented equipment
Repairs are included in rental payment—the supplier must fix at no charge
If a person owns medical equipment that’s included in the program, they can use any Medicare-enrolled supplier (even a non-contract supplier) for repairs or replacement parts needed for the repair of their equipment. Before the equipment is serviced, the person should make sure the supplier is Medicare-enrolled so Medicare can help pay.
If the person needs to replace their medical equipment, they must use a Medicare contract supplier for Medicare to help pay for the equipment. Medicare doesn’t pay for repairs that are covered under a manufacturer’s or supplier’s warranty. If the person needs warranty repairs, they must follow the warranty rules.
The cost of repairs for rental equipment is included in rental payments. The supplier renting the equipment must fix it at no additional charge.
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22. Deductible and Coinsurance
After paying the annual Part B deductible
Medicare pays 80% of the Medicare-approved amount for equipment, supplies, and services
The consumer is responsible for 20% coinsurance
Contract suppliers can’t bill for more than these amounts
For suspected overpayment or fraud, call
1-800-MEDICARE ( )
TTY users call
Fraud Hotline of the HHS Office of Inspector General at
Under this program, there is still a requirement to meet the annual deductible. After meeting the annual Part B deductible, Medicare pays 80% of the Medicare-approved amount for equipment, supplies and services, and the person with Medicare is responsible for 20% coinsurance.
It’s important to remember that for any equipment or supplies that are included in the Competitive Bidding Program, the contract supplier can’t charge people with Medicare more than the 20% coinsurance and any unmet annual deductible. If it’s suspected that a person with Medicare is paying more coinsurance than the Medicare allowed amount, call MEDICARE ( ) or call the Fraud Hotline of the HHS Office of the Inspector General at
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23. Competitive Bidding Program
Points to Remember
The Competitive Bidding Program does NOT affect which doctors or hospitals a person with Medicare can use
Generally, a contract supplier must be used for Medicare to help pay
A person with Medicare may be able to stay with their current supplier if renting from a supplier who has a new contract or elects to become “grandfathered”
People in Medicare Advantage Plans should check with the plan
The following are some points to remember:
The Competitive Bidding Program doesn’t affect which doctors or hospitals a person with Medicare can use. People with Original Medicare in competitive bidding areas (CBAs) generally must obtain competitively bid items from contract suppliers.
If a person with Original Medicare lives in or visits a CBA and their current supplier isn’t a contract supplier, they’ll likely need to use a contract supplier for Medicare to help pay.
People with Original Medicare that live in a CBA and are renting certain medical equipment or receiving oxygen or oxygen equipment may have the choice to stay with their current supplier if the supplier has a new contract or chooses to become a “grandfathered” supplier.
The Competitive Bidding Program applies to people in Original Medicare. If they’re enrolled in a Medicare Advantage Plan, the plan will notify them if their supplier is changing. People with Medicare Advantage Plans, should contact their plan for specific details.
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24. Competitive Bidding Program
Resources
Visit Medicare.gov/supplier
DMEPOS Supplier Locator Tool
Call MEDICARE ( )
TTY users should call
Doctors or suppliers
Administration for Community Living has local information resources
For more information or to answer questions about Medicare’s Competitive Bidding Program, visit Medicare.gov/supplier, which has a Supplier Locator Tool to help identify Medicare contract suppliers by area along with consumer information on the Competitive Bidding Program and Medicare Coverage of Durable Medical Equipment.
More information can by obtained by calling MEDICARE ( ). TTY users should call This toll-free number is available 24 hours a day, 7 days a week.
Doctors, suppliers, hospital discharge planner, social workers or anyone who helps people with Original Medicare get medical equipment or supplies may also be able to provide additional information.
Administration for Community Living has local information resources that can help answer questions. Visit ACL.gov/About_ACL/Contact_us/Index.aspx.
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