Further consolidation may loom as Medicare’s bidding program pressures small DME providers

YARMOUTH, Maine – The return of Medicare’s competitive bidding program will further consolidate the home medical equipment (HME) industry, according to 90% of respondents to a recent HME Newspoll. And that’s the goal, they say. 

Industry shrinkage: A designed outcome 

Respondents say the program is structured to award bids to fewer providers at lower reimbursement rates, shrinking the industry with each round. 

“Independent providers like myself see a dangerous agenda unfolding: The government and insurance companies are pushing for consolidation,” wrote one respondent. “They may call it efficiency, but the reality is harmful.” 

The impact is already visible. Between July 2013 and January 2025, the number of durable medical equipment (DME) locations dropped by 36%, according to the latest data from AAHomecare. 

Providers consider selling amid uncertainty 

Even before the next round begins, consolidation may accelerate. National providers like AdaptHealth and Quipt Home Medical have reported on recent earnings calls that smaller providers are reaching out to sell. 

Nearly half (48%) of poll respondents say they’re considering selling their businesses. Of those, 58% cite the return of competitive bidding as a key factor in their decision. 

“I sold a business in 2021 because of this very issue,” wrote one respondent. “I can’t imagine being a small, sub-$5 million provider and still having to deal with all the present-day issues.” 

Consolidation’s impact on patient care 

Respondents warn that fewer providers could mean diminished care for patients, especially in underserved areas. 

“With fewer providers, patients will be increasingly dependent on larger organizations that are forced to prioritize profit over quality, choice and service,” wrote Tammy Kvinsland, COO & CCO at Olympic Pharmacy and Healthcare Services in Gig Harbor, Wash. “This shift will reduce personalized care and limit local access, particularly in vulnerable communities. Ultimately, patient healthcare will suffer as consolidation undermines the very goals of accessibility and quality in our healthcare system.” 

A weakened industry in times of crisis 

Some fear that a more consolidated industry will be less resilient in emergencies, such as another pandemic. 

“During COVID, many struggled to obtain supplies—if another pandemic occurs under competitive bidding, access will be even more restricted,” one respondent wrote. 

Adapting to survive 

Despite the challenges, some respondents believe the industry must continue to evolve. 

“I think DMEs are going to have to continue to do what they've always had to do: adapt or die,” wrote one respondent. “This means continuing to look at product mix, contracts and adding value in other, non-traditional ways.” 

Bidding with eyes wide open 

As the next round approaches, respondents emphasize the importance of informed participation. 

“In the last round of bidding, I felt that industry organizations like VGM and AAHomecare did a great job educating providers on sustainable bidding strategies,” wrote Erin Dolan, vice president of Med-Essentials in New Hartford, Conn. “If providers educate themselves and bid intelligently and sustainably, hopefully we can all stay in the game.” 

• Related: Stakeholders tap into firms affiliated with the administration in $3M bid to delay competitive bidding