Medicare Competitive Bidding Program for DMEPOS

The Competitive Bidding Program for durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) was established  by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA). The Program fundamentally changes Medicare's approach to reimbursing DMEPOS suppliers under Medicare Part B, from the current use of fee schedules, to a system which sets reimbursement rates through a bidding process between the Centers for Medicare and Medicaid Services (CMS) and designated suppliers. The winning bids will be used to establish a single Medicare payment for each item. Suppliers wishing to submit bids must be accredited and bonded. Contracts will be re-competed at least once every three years.

In August 2009, CMS announced the re-launch of a competitive bidding program. Pricing under Round One of the program will be implemented on January 1, 2011, across nine MSAs.  The new healthcare reform legislation adds 21 cities to Round Two of the bid, bringing the total number of MSAs in the program to 100. It also requires the Secretary of Health and Human Services to bid all areas of the country or apply bid rates nationwide by 2016.

The implementation of a competitive bidding program will have a significant impact on HIDA member suppliers of nursing home, home care, and extended care products.  The competitive bidding program is poised to jeopardize Medicare beneficiaries’ access to care and ultimately the quality of care those beneficiaries receive.  HIDA and other industry groups remain involved with policymakers, who have indicated possible action to modify and/or repeal the program. If you have any questions regarding our competitive bidding advocacy efforts, please contact Amy Michael at (703) 838-6121, or michael@hida.org.