CMS’s Seema Verma: Current bid structure ‘not sustainable’

Thursday, July 12, 2018

WASHINGTON – CMS Administrator Seema Verma says she wants to “modernize” the agency’s long-standing competitive bidding program for DMEPOS by instituting market-oriented reforms.

It’s a major change in attitude for the agency, which has lauded competitive bidding and the savings it has created since the program was first implemented in 2011.

“The current structure doesn’t produce the best prices for patients and doesn’t drive optimal performance by contractors, and it’s simply not sustainable in the long term,” Verma said during a press call on July 11, following the release of a proposed rule outlining changes to the program. “In developing today’s rule, we worked with experts to leverage market principles that would support competition when contracts are re-competed under the revised bid program.”

One of the more significant changes in the proposed rule: Replacing median-based bidding with lead-item bidding to establish prices at the maximum winning bid.

As an example of the new methodology, Verma said rather than soliciting bids for power wheelchairs and every accessory, CMS will accept bids only on power wheelchairs. The agency will then set pricing for accessories using a scale based on the historic fee schedule amounts and on supplier data, she said.

“This approach will streamline the bidding process, reduce the burden on suppliers and ensure that pricing is accurate,” she said. “We hope that this will bring more competition and vendors to the process and, ultimately, increase access for the beneficiaries.”

To allow time for the revised program to take effect—a process that could take anywhere from 18 to 24 months, Verma said—the proposed rule would also temporarily extend the current reimbursement rates in bid areas, non-bid areas, and rural and non-contiguous areas, she said.

Additionally, “beginning Jan. 1, 2019, and until new contracts are awarded, beneficiaries may receive DMEPOS items from any Medicare-enrolled supplier,” the agency stated in a press release that accompanied the proposed rule.


Current system is setup to support large national suppliers and not small biz as small biz do have have buying power nor national setup.

For 1st round on diabetic supply, we went through registraing nationally but need the national office setup

We could not supply to any diabetic patient even my neighbor they have to get it from national supplier located in CA or Hawaii.

Simple siggestion is "Medicare take bids from manufacturers or negotiate prices and tell suppliers to give us that negotiated price and then Medicare can give us a markup to service the patients.

Today reimbursment is based upon supplier represenation to Medicare and not much on anything ekse.