The Centers for Medicare and Medicaid Services (CMS) has released a
proposed rule that would significantly change bidding and pricing
methodologies under the durable medical equipment prosthetics orthotics
and supplies (DMEPOS) competitive bidding program. CMS stated that the
goal of the rule is to “relieve regulatory burdens for providers,
support the patient-doctor relationship in healthcare, and promote
transparency, flexibility, and innovation in the delivery of care.” Here
is a look at what the change would mean for distributors and their
The Affordable Care Act of 2010 implemented the competitive bidding
program for DMEPOS nationwide beginning in 2016. The program
fundamentally changed how Medicare reimburses DMEPOS suppliers, from fee
schedules to a bidding process. The winning bids are used to establish a
single Medicare payment for each item in each bidding area. The bidding
process is repeated every three years.
Current DMEPOS competitive bidding contracts expire at the end of
2018. CMS has not yet begun the recompete process, which generally takes
between 18 and 24 months. Because of this time lag, part of the
proposed rule would put the competitive bidding program on hold starting
January 2019 likely through the end of 2020. Beginning on January 1,
2019, beneficiaries may receive DMEPOS items from any willing supplier
until new contracts are awarded under the DMEPOS competitive bidding
program. CMS notes they will provide more information at a later date.
Proposed rule brings bidding, pricing methodology changes
The proposed rule released on July 11 would change bidding and pricing
methodologies, if adopted. Changes under the proposed rule include:
- Revising the DMEPOS competitive bidding program by implementing more streamlined pricing rules.
- Establishing a new method for determining what DMEPOS suppliers are paid.
- Establishing three different temporary fee schedule adjustment
methodologies depending on the area in which the items and services are
- One set of payment rules for durable medical equipment furnished on
or after January 1, 2019 in areas currently subject to competitive
- Another set of rules for items and services provided between January
1, 2019 – December 31, 2020 in areas that are currently not subject to
competitive bidding rules, and are either rural areas or not part of the
lower 48 states.
- Another fee schedule adjustment methodology for items and services
provided between January 1, 2019 – December 31, 2020 in areas that are
currently not subject to competitive bidding rules, are not rural, and
are part of the lower 48 states.
This proposed rule underscores the administration’s interest in changing
the competitive bidding program. While the Medicare Payment Advisory
Committee (MedPAC) recently recommended expanding the program, it is
more likely that CMS will continue moving in the opposite direction.
The proposed rule could have a positive effect on suppliers and the
post-acute providers and patients they serve. In addition to
streamlining the current process, the recent delays indicate CMS may be
willing to reevaluate the program. This provides HIDA Government Affairs
the opportunity to advocate for additional changes sought by
distributors, such as the exclusion of enteral nutrition products from
At this point, there has not been any independent analysis on how the
program has affected the availability of medical products and physician
decisions when clinically preferred products are not available. Because
of the potential impact any changes could have on the distributors and
providers, along with the paucity of information, HIDA will continue to
engage policymakers and our members as we work to submit comments to
CMS. To learn more, please contact us at HIDAGovAffairs@HIDA.org.