National Competitive Bidding Overview

Bidding help is available.

Simply contact our qualified National Competitive Bidding Experts toll-free at 1.800.642.6065 or contact us online.

Simply contact our qualified National Competitive Bidding Experts toll-free at 1.800.642.6065 or contact us online.

In April of 2007, CMS formally launched the Medicare DMEPOS competitive bidding program through publication of its “Final Rule”.  Under the Final Rule, HME providers (“suppliers”) were required to be successful bidders and meet certain program standards in order to supply selected DMEPOS items to Medicare beneficiaries in selected competitive bidding areas (“CBAs”).

To kick-start the program, suppliers in 10 selected CBAs submitted bids for contracts during the summer of 2007 (Round 1).  Bidding entities were overwhelmed by flaws in the bid submission process, financial documentation review process and bid review process.   Ultimately, after reviewing approximately 6,500 bids, CMS offered contracts to 329 suppliers during spring of 2008.

Contract suppliers in those 10 initial bidding areas saw average reimbursement cuts of 26 percent on the product categories covered under the program.  Contracts initially went into effect on July 1, 2008.  The July 15, 2008 implementation of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) terminated these contracts and immediately reinstated all suppliers of DMEPOS for all products in the competitive bidding areas, delayed the implementation of the program, and required certain amendments to the program upon re-implementation.  As a “pay-for” for the delay in the program, suppliers in all areas of the country saw a Jan. 1, 2009 9.5 percent reduction in reimbursement for those products included in the first round of the program.

In the fall of 2009, suppliers in the nine remaining Round 1 bid areas again submitted bids to supply competitively bid items in those areas. In June 2010, CMS announced that the rebid results were such that suppliers would experience a 32 percent payment reduction on top of the 9.5 percent they had already paid for the delay. Finally, in November 2010, CMS announced that they had awarded 1,217 contracts to 356 companies nationwide. Those contracts are effective as of January 1, 2011.

Competitive bidding is a sealed-auction bid program being phased in by DMEPOS product category.  Suppliers can bid on one or more product categories, but must bid on all specified codes within the category.  Competitive bidding is being phased in geographically, and will take place in 9 CBAs in Round 1.  In 2011, the program will be expanded to 91 additional CBAs areas, including 70 that were announced on June 1, 2008, in Round 2 and 21 areas to be announced as per H.R. 3590 (health care reform).

Contracted suppliers will be reimbursed based on the median of the winning suppliers’ bids for each of the selected items in the CBA (rather than the Medicare fee schedule or supplier bid amount).  HME providers that do not bid, or are not successful bidders, will not be able to bill Medicare for new competitively-bid items once the program begins in their CBA.

Round Two Timeline