Next round of bidding takes shape: CMS proposes new rules, remote delivery CBPs and annual reaccreditation 

WASHINGTON – CMS has released a proposed rule on home health and DME that includes new policies for the next round of its national competitive bidding program. Those provisions include new rate-setting methodologies and a new annual reaccreditation requirement. 

What new details do we know (and not know) about bidding? 

CMS has not announced the product categories or the specific timeframe for the next round. “A future announcement will provide those details,” it states. 

The agency is proposing that all continuous glucose monitors (CGMs) and insulin infusion pumps be reclassified under the frequent and substantial servicing payment category, “giving beneficiaries access to current, fully supported technology that meets evolving safety and performance standards, rather than having to wait five years.” 

Other details in the proposed rule: 

• The agency is proposing an annual increase to the SPAs to account for inflation, consistent with Medicare making annual covered item updates for other DMEPOS items and services. “This would account for inflation in the cost of doing business for suppliers submitting bids for furnishing items under a multiyear contract,” it stated. 
• The agency is proposing to specify that ostomy, tracheostomy, and urological supplies are medical equipment items mandated for inclusion under the program. 
• The agency is proposing to 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). These suppliers may also provide items in person, but only contract suppliers would be allowed to do so. The agency may implement either: 
  • A single nationwide RID CBP covering all U.S. states and territories, or 
  • Multiple regional RID CBPs across different parts of the country. 

Why is CMS doubling down on accreditation? 

Currently providers must be reaccredited every three years. 

“The CMS DMEPOS accreditation regulations have not been updated since their original promulgation in 2006, and we believe that program integrity vulnerabilities have risen substantially in the DMEPOS accreditation program over the years,” the agency stated. “We are particularly concerned that there may be instances where: (1) AOs are accrediting DMEPOS suppliers that do not meet the DMEPOS quality standards; and (2) DMEPOS suppliers are falling out of compliance with the quality standards (sometimes for extended periods) after becoming accredited. As a result, we are concerned for beneficiaries’ health and safety when they utilize such suppliers, as well as for the many millions of Medicare dollars that may have been paid to noncompliant suppliers since 2006.”

Is there any relief in the rule?

CMS proposes that suppliers achieving a target approval rate of 90% be offered an exemption from required prior authorization. To determine supplier eligibility for continued exemption:

• The DME Medicare Administrative Contractors (MACs) would complete a post payment medical review sample.
• From this claim sample, suppliers must again meet a claim approval rate of 90% or greater to continue their exemption.

Suppliers who did not meet the compliance rate threshold must continue submitting prior authorization requests as required. By achieving the compliance rate percentage, the supplier has demonstrated an understanding of the requirements for submitting accurate claims. The DME MACs would provide suppliers notice of an exemption or withdrawal of an exemption at least 60 days prior to the effective date.

What’s the industry’s initial reaction? 

AAHomecare says preparing for a new bidding round is going to be “a major undertaking for everyone in the HME sector.” 

“We need to make sure the procedures and price-setting methodologies in this new bidding round can deliver reimbursement rates that reflect market reality,” it stated in a bulletin. “In advance of Round 2021, HME stakeholders worked hard to secure program improvements like raising the bid ceiling, using clearing prices to set rates, and keeping unqualified bidders from participating—and we are determined to protect and add to those improvements where we can. 
  
“Analyzing the new rule and working with the HME community to develop a strong comment response is the first order of business for AAHomecare,” the association continued. “We’ll also work with Congress and our clinician and patient advocacy partners as needed to protect access to care.  And finally, we will coordinate efforts to educate suppliers to make sure they are equipped with the resources and intelligence they need to make informed bidding decisions.” 

How did we get here? 

On May 30, the Department of Health and Human Services (HHS) released its FY 2026 Budget in Brief, allocating $22 million to restart the program, which has been paused since Jan. 1, 2024. CMS elaborated on this funding in its Justification of Estimates for Appropriations Committees.  

The last round of bidding failed to deliver anticipated savings, with CMS only implementing bid pricing for off-the-shelf back braces and knee braces in certain areas. The agency maintains, however, that the program, launched in 2011 and expanded to 130 areas, has saved Medicare $11 billion across 16 product categories.  

Based on historical timelines, stakeholders anticipate that if CMS releases a proposed rule in July 2025 and a final rule in November 2025, the bidding process could begin in January 2026, with the program launching in January 2027.  

• Read the rule here. 
• Read CMS’s fact sheet on the rule here. 

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

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