CMS moves forward with national competitive bidding 

WASHINGTON – The Centers for Medicare & Medicaid Services (CMS) late on Friday afternoon released the 2026 Home Health Prospective Payment System Final Rule with final details for the next round of its national competitive bidding program (CBP), including product categories. 

Next round Remote Item Delivery (RID) DMEPOS CBP product categories: 

• Class II Continuous Glucose Monitors (CGMs) and insulin pumps 
• Urological supplies 
• Ostomy supplies 
• Hydrophilic urinary catheters 
• Off-the-shelf (OTS) back braces 
• OTS knee braces 
• OTS upper extremity braces 

The agency offered the following target dates for next steps for the CBP: 

December 2025 

• CMS begins pre-bidding supplier awareness program  

Late spring/early summer 2026 

• CMS announces specific dates for registration and bidding 
• CMS announces lead items for the DMEPOS CBP product categories and number of contracts to award for each product category 
• CMS begins bidder education program 

Late summer/early fall 2026 

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

Late summer/early fall 2027 

• Contracts awarded and single payment amounts announced 
• Beneficiary education begins 

No later than Jan. 1, 2028 

• Start of Next Round - Contracts and single payment amounts (SPAs) in effect 
• Six-month transition period begins for beneficiaries to switch to contract suppliers 

CMS also finalized plans for accreditation: 

• Requiring DMEPOS suppliers to be surveyed and reaccredited every year (as opposed to the current three-year cycle); 
• Eliminating inconsistencies among AOs in how they oversee DMEPOS suppliers; and 
• Strengthening our ability to take action against poorly performing DMEPOS AOs. 

What’s new with this next round of the program, according to CMS? 

Modernization of the DMEPOS CBP information technology systems 

As part of CMS’s continued process improvement efforts to streamline the bidding process, all the bidding-related information technology systems have been consolidated into one system, Connexion, CMS’s DMEPOS CBP secure portal. In past competitive bidding rounds, suppliers submitted bids (Form A and Form B) electronically through DBidS and all other documents through Connexion. Bidders will no longer have to log into two different systems to submit their bid information. 

In addition, the bidding system will contain a “country of origin” question to obtain information on where the product(s) is manufactured. Suppliers awarded a DMEPOS CBP contract will be listed on the Medicare Supplier Directory, along with its product(s) and country of origin information, allowing beneficiaries to have additional information about the product(s). 

Single payment amounts  

SPAs are now calculated using the 75th percentile of winning bids instead of the maximum winning bid. In addition, the SPAs are updated at the beginning of the second year and third year of the contract period by the percentage change in the Consumer Price Index for all Urban Consumers (CPI-U) for the 12-month period ending 6 months prior to the start of the second (and third year, if applicable) of the contract period. In no case can the updated SPA exceed the unadjusted fee schedule amount for the item or 110% of the adjusted fee schedule amount for the item. 

Remote Item Delivery CBP 

A nationwide RID CBP is being phased into the DMEPOS CBP for items typically furnished on a national mail order basis. The nationwide RID CBP includes all areas (all states, territories, and the District of Columbia). Contract suppliers for each product category will be responsible for furnishing all items under the product category to all Medicare beneficiaries regardless of where they live. Only contract suppliers can furnish items included under the nationwide RID CBP that are covered under Medicare Part B. Unlike a national mail order program, the items included under a RID CBP may be shipped or delivered to a beneficiary’s home or may be picked up at a local pharmacy or storefront if the beneficiary or caregiver for the beneficiary chooses to pick up the items in person and the local pharmacy or storefront is owned by a contract supplier or a subcontractor of the contract supplier.  

Methodology for determining the number of RID CBP contract suppliers 

The number of contracts offered for each product category will be based on 125% of the number of suppliers furnishing at least 3% of total national allowed services for the lead item in 2025. Based on 2024 claims data, we believe this would result in approximately ten national contract suppliers for the CGM/insulin pump product category, eight national contract suppliers for the urological supplies and ostomy supplies product categories, six national contract suppliers for the OTS upper extremity braces and OTS knee braces product categories, and four national contract suppliers for the OTS back braces product category (note, the actual number of contract suppliers will be based on 2025 or 2026 claims data and will be announced in late Spring/early Summer 2026). If less than 30% of the winning suppliers are small suppliers, additional contracts may be offered towards the goal of meeting the 30% small supplier target. 

Payment rules for continuous glucose monitors and insulin infusion pumps 

Payment for CGMs and insulin infusion pumps will be made on a continuous, monthly rental basis with payment for all necessary supplies and accessories included in the monthly rental rates beginning on the first day of the contract period. Contract suppliers maintain ownership of the rental equipment and are allowed to bill for up to three months of rental in advance. Contract suppliers must furnish the brand of CGM or insulin pump ordered by the physician for the beneficiary. Beneficiaries who own their own CGM or insulin pump prior to the start of the contract period can continue to use their equipment until it needs to be replaced or they elect to switch to a rented device. Contract suppliers must furnish replacement supplies and accessories for the beneficiary-owned CGM or insulin pump. 

Limit on bid amounts 

The bid amount submitted for the monthly rental of a class II CGMs, including all necessary supplies, cannot exceed the monthly fee schedule amount for the supplies for the class II CGM plus the average of the purchase fee schedule amounts for the class II CGM divided by 60. Using the 2025 fee schedule amounts, this would result in a bid limit of $272.69. This number will be updated by the 2026 update factor.  

The bid amounts submitted for an OTS back brace or OTS knee brace identified as the lead item in the product category for 2025 cannot exceed the average of the 2026 nonrural fee schedule amounts for the item. The bid amounts submitted for the OTS upper extremity brace, urological supply, or ostomy supply identified as the lead item for each of these three product categories for 2025 cannot exceed the average of the 2026 fee schedule amounts for the item. 

Revising the submission of financial document requirements 

Each bidding entity is now only required to submit a business credit report with a numerical credit score or rating, unless the bidding entity does not have a business credit report with a numerical credit score or rating because the entity has not been in operation long enough to generate a numerical score or rating. Bidding entities that are unable to generate a credit report with a numerical credit score or rating would be required to submit a business credit report showing no data or insufficient information to generate a credit score or rating, in addition to a personal credit report with a numerical credit score or rating from the bidding entity’s Authorized Official or Delegated Official listed in the Medicare Provider Enrollment, Chain, and Ownership System (PECOS).  

CMS will provide detailed information regarding the credit report and numerical credit score and/or rating requirements for entity types in the Request for Bids Instructions, which will be published prior to the opening of the bid window for each round of the DMEPOS CBP. 

Covered document review date (CDRD) evaluation and notification process  

CMS is streamlining the evaluation and notification processes for missing covered document(s). CMS will no longer evaluate if a bidding entity was missing a covered document(s) by the CDRD and by the close of the bid window and will only determine if a bidding entity had a missing covered document by the close of the bid window. Once the evaluation is completed, CMS will continue notifying bidding entities, within 90 days of the CDRD, of the specific covered document(s) that was missing or provide confirmation that all applicable covered documents had been received by the close of the bid window. Bidding entities will continue to have 10 business days from receiving their notification to submit the missing covered document(s). 

Bid surety bond review process  

Pursuant to 42 CFR §414.412(g), bidders are required to obtain a bid surety bond in the amount of $50,000 for each competitive bidding area (CBA) for which they submit a bid[2]. CMS promulgated in regulations the review process used in Round 2021 where we will review each bid surety bond to determine if there is a deficiency(ies) and allow bidders the opportunity to correct certain deficiencies by submitting a bid surety bond rider. Bidders will have a single, 10-business day timeframe to obtain and submit a bid surety bond rider correcting the deficiencies on the bid surety bond. 

Tribal exemption from participating in the DMEPOS CBP 

Indian Health Service (IHS) and tribally operated Medicare enrolled providers and suppliers will no longer have to submit a bid and be awarded a DMEPOS CBP contract to provide items included in the DMEPOS CBP to American Indian/Alaska Native (AI/AN) Medicare beneficiaries who live in a CBA. IHS and tribally operated Medicare enrolled providers and suppliers will be paid by Medicare for providing services to AI/AN Medicare beneficiaries who reside in a CBA, and AI/AN Medicare beneficiaries residing in a CBA will be able to retain their benefits from receiving services from Health Services and tribally operated providers and suppliers.  

Addition of a termination clause for DMEPOS CBP supplier contracts  

A termination clause will be added to each DMEPOS CBP contract that could be utilized during a public health emergency, when CMS determines that credible evidence exists of an access problem for beneficiaries, and when CMS believes the termination of an entire DMEPOS CBP contract, the termination of a competition on a DMEPOS CBP contract, or the termination of a defined area(s) within a CBA could improve the situation for the applicable competition(s) or defined areas (for example, ZIP codes) within a CBA. 

• For more on CMS’s plans, go here for a Fact Sheet. 
• Here is a link to the final rule. 

CMS commentary: 

“CMS is finalizing improvements to the DMEPOS Competitive Bidding Program so that we can protect the Medicare Trust Funds and beneficiaries can benefit from lower copays. We expect to announce the product categories for which we will solicit bids and the specific timeframe for the next competition shortly. In addition, beginning the date class II CGMs and insulin pumps are furnished under the DMEPOS Competitive Bidding Program, CMS will begin paying for all continuous glucose monitors (CGMs) and insulin infusion pumps on a monthly rental basis, giving beneficiaries access to current, fully supported technology that meets evolving safety and performance standards.”   

Background:

CMS published a proposed rule on home health and DME on July 2 that included new policies for the next round of the competitive bidding program. Among those policies: 

• All continuous glucose monitors (CGMs) and insulin infusion pumps be reclassified under the frequent and substantial servicing payment category 
• Specify that ostomy, tracheostomy, and urological supplies are medical equipment items mandated for inclusion under the program 
• Define two new terms – “Remote Item Delivery CBP (RID CBP)” and “Remote Item Delivery Item” – to support the creation of competitive bidding programs where suppliers primarily deliver items by mail to Medicare beneficiaries, regardless of their location within a competitive bidding area (CBA) 
• Require annual reaccreditation 

Stakeholders submitted comments to the proposed rule en masse by a Aug. 29 deadline. In an HME Newspoll, 69% of respondents said they planned to submit comments. 

Ahead of the final rule being published, stakeholders initiated a flurry of activity, including: 

• In September, AAHomecare launched a $3 million fundraising effort for a campaign to delay the program that included lobbying, opinion pieces and polling – this time partnering with firms affiliated with the administration. 
• In September, Reps. Neal Dunn, R-Fla., and Greg Murphy, R-N.C., led a sign-on letter urging CMS not to move forward with expanding the competitive bidding program to include ostomy, urological and tracheostomy supplies.  
• In October, Reps. Dan Meuser and Mariannette Miller-Meeks are spearheading a sign-on letter asking CMS Administrator Dr. Mehmet Oz to prevent flawed provisions for a new round of the competitive bidding program (CBP) from taking effect.   
• In October, AAHomecare called on industry stakeholders to reach out to members of Congress and ask that they weigh in with CMS on the potential impacts of another round of competitive bidding on small businesses. 

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