Home Blog Post


On Thursday, March 7, 2019, CMS published a post to their blog providing DMEPOS Suppliers a glimpse into what to expect for the next round of Competitive Bidding. The DMEPOS Competitive Bidding Program was implemented on January 1, 2011. The Round 1 2017 contracts and prices were implemented on January 1, 2017, and the Round 2 Recompete and the National Mail-Order Recompete contracts and prices were implemented on July 1, 2016. All DMEPOS Competitive Bidding Program contracts expired on December 31, 2018. Starting January 1, 2019, there is a temporary gap period in the DMEPOS Competitive Bidding Program that CMS expects will last two years through December 31, 2020.

Yesterday's post provided the HME industry with an idea of what can be expected in the next round of Competitive Bidding. Some of the highlights from the article are as follows:

Competitive Bidding Areas

CMS is consolidating the Competitive Bidding Areas (CBAs) that were included in Round 1 2017 and Round 2 Recompete by conducting Round 2021 in the same geographic areas for a total of 130 CBAs.

New Items added to the Product Categories List

CMS is shifting some items to different, smaller product categories to accommodate the lead item pricing methodology. As a result, the 16 product categories listed below are included in Round 2021. Items newly included in the DMEPOS Competitive Bidding Program are off-the-shelf (OTS) back braces, OTS knee braces, and non-invasive ventilators.  

  1. Commode Chairs
  2. Continuous Positive Airway Pressure (CPAP) Devices and Respiratory Assist Devices (RADs)
  3. Enteral Nutrition
  4. Hospital Beds
  5. Nebulizers
  6. Negative Pressure Wound Therapy (NPWT) Pumps
  7. Non-Invasive Ventilators
  8. OTS Back Braces*
  9. OTS Knee Braces*
  10. Oxygen and Oxygen Equipment
  11. Patient Lifts and Seat Lifts
  12. Standard Manual Wheelchairs
  13. Standard Power Mobility Devices
  14. Support Surfaces (Groups 1 and 2)
  15. Transcutaneous Electrical Nerve Stimulation (TENS) Devices
  16. Walkers

*OTS orthotics or braces refer to “orthotics which require minimal self-adjustment for appropriate use and do not require expertise in trimming, bending, molding, assembling, or customizing to fit to the individual.” Medicare Regulations define “minimal self-adjustment” as “an adjustment that the beneficiary, caretaker for the beneficiary, or supplier of the device can perform and does not require the services of a certified orthotist or an individual who has specialized training.” More information can be found in the corresponding LCD Policy Articles.

Discontinuing Mail-Order

CMS is not including a national mail-order program for diabetes test supplies in Round 2021.

Lead Item Pricing

In Round 2021, CMS is implementing the lead item pricing methodology for all items included in the product categories as established in the final rule (CMS-1691-F) published on November 14, 2018. This means that rather than submitting individual bids for each item within a product category, bidders will only submit one bid for the lead item in the product category. The supplier’s bid for the lead item represents the supplier’s bid for furnishing the lead item and all other items (the non-lead items) in the product category. Bids for the lead item in the product category will be used to calculate the Single Payment Amounts (SPAs) for all of the items within that product category. The SPA for the lead item is the maximum bid submitted for that item by bidders whose bids for the item are in the winning range in that CBA and product category combination. The SPAs for the non-lead items within the product category are determined by multiplying the lead item SPA by a relative ratio. The ratios are based on the historic differences in the fee schedule amounts for the lead item and non-lead items.

Bid Surety Bonds

Suppliers bidding in the Program will be required to obtain a $50,000 bid surety bond for each CBA for which they submit a bid. A copy of the bid surety bonds(s) must be provided during the submission process. When a bidding entity is offered a contract for a CBA and product category combination (competition) and its composite bid for the competition is at or below the median composite bid rate for all bidding entities included in the calculation of the single payment amounts within the competition, and the bidding entity doesn’t accept the contract offer, its bid surety bond for that CBA will be forfeited. If the forfeiture conditions aren’t met, the bid surety bond liability will be returned to the bidder within 90 calendar days of the public announcement of the Round 2021 contract suppliers.

Licensure and Accreditation Requirements

Each individual supplier location on a bid must meet all accreditation and applicable state licensing requirements for every item in the product category to be considered for a contract. For instance, if the accreditation and state licensing requirements to furnish CPAP devices and/or supplies are different from the accreditation and state licensing requirements to furnish RADs, each supplier location on the supplier’s bid for the CPAP devices and RADs product category must meet the accreditation and state licensing requirements to furnish both RADs and CPAP devices and/or supplies.

Important Dates for Round 2021

March 7, 2019

  • CMS begins pre-bidding supplier awareness program

May 2019*

  • CMS announces specific dates for registration and bidding
  • CMS begins bidder education program

June 2019*

  • Bidder registration period to obtain user ID and passwords begins
  • Bid window opens

*Dates listed are target dates 

Interested in Bidding? Get Prepared Now!

Preparing for the next round of Competitive Bidding is much like starting a new HME business. Given the above requirements for licensure, accreditation and surety bond coverage, the time to start is now.

  • Reach out to a certified surety bond company and determine if the process for getting bonded.
  • Talk with your accrediting body about your intentions and develop a plan to ensure your accreditation in all CBAs.
  • Determine which types of licenses you will need for each CBA you intend to bid and the product categories you will provide.

In addition to the above, it is also a great time to determine if your organization can successfully navigate the coverage guidelines for the items you wish to apply for. As a bid winner, you will be required to meet coverage and documentation requirements for all the products you provide to Medicare beneficiaries. Don't leave these details out! Bid winners are still open to audit, and can have a greater chance of seeing large overpayments if they are doing things right the first time. Take advantage of the gap period and get your organization ready.

Let The van Halem Group help get you prepared!

Our team of experts are here to provide training and education to your staff. Our clinical team can guide you through the gap period and have you ready to go when the program kicks off in 2021. Whether you are currently providing any of the items on the product categories list or simply have an idea of what products you will bid on in the future, our team of clinical experts can help. From clinical prescreens to proactive claims audits, or even product specific educational webinars, we can work with your organization to ensure that your team understands the coverage and documentation requirements for the products you provide (or will in the future).

Contact Us today to find out more!