‘Flawed from the beginning’: Revival of bidding program raises alarms

YARMOUTH, Maine – After several years of wondering if they will or won’t, CMS has signaled its intent to restart the Medicare competitive bidding program. It’s an unwelcome and surprising development for 71% of respondents to a recent HME Newspoll. 

The Department of Health and Human Services on May 30 released a FY 2026 Budget in Brief that earmarked $22 million for the program. 

“I am disappointed they’ve reinstated this program that was clearly flawed from the beginning,” wrote Erin Dolan, vice president, Med-Essentials, New Hartford, Conn. “It is already difficult for patients to find a provider to work with Medicare without competitive bidding, so limiting the provider field is only going to make that situation worse.” 

Since the widespread implementation of the program in 2013, the total number of supplier locations has declined 37%, according to AAHomecare. 

Another round of bidding could accelerate that consolidation, say poll responders. 

“They almost destroyed the small family HME industry doing this before,” wrote Earl Ward, president, Ward Medical Services, St. Augustine, Fla. “Maybe they did root out a lot of small-time fraud, but the collateral damage to honest mom-and-pop companies took out more honest players than bad ones.” 

CMS has to accept results 

In the last round of bidding in 2021, CMS didn’t see significant expected savings and opted to only implement bid pricing for off-the-shelf back and knee braces. If the agency wants to resurrect the bid program, it needs to follow it through, say respondents. 

“The last time we bid (2021), the providers likely submitted viable bids which Medicare stated, ‘didn’t result in savings to the program,’” wrote Erik Sorensen, director, Ridgeview Home Medical Equipment in Waconia, Minn. “If CMS wants to do this, they have to accept the results.” 

When CMS scrapped much of the bid program, many providers who did bid felt burned by the loss of time and money. Forty-five percent of respondents said they submitted bids in the last round, and 29% said they won bids. Forty-eight percent said they plan to submit bids in the next round. 

“We lost $30,000 on surety bonds,” wrote one respondent. “Why do they continue to think they can squeeze more out of the industry?” 

There’s nowhere to go 

There’s not much left to squeeze, say providers, who face a very different bidding environment than they did several years ago, buffeted by rising costs, inflation, a tight labor market and the looming threat of tariffs. 

“Current reimbursement rates are already unsustainably low, leaving providers with razor-thin profit margins,” wrote one respondent. “Reintroducing competitive bidding would further strain operations, reduce access to essential equipment and compromise quality of care.” 

• Related: ‘We know the headwind’: Stakeholders react to return of competitive bidding