‘Stepping over dollars to save pennies’: Providers deconstruct CGM bid plan
By Theresa Flaherty
Updated 11:41 AM CDT, Fri July 11, 2025
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WASHINGTON – CMS’s proposal to include continuous glucose monitors (CGMs) in the next round of competitive bidding fails to reflect the complexities of providing these devices, which have transformed diabetes care, providers say.
The move follows CMS’s decision to expand CGM coverage to beneficiaries with Type 2 diabetes in 2023, a change that has fueled rapid growth in the category. In 2022, before the change, Medicare spending on CGMs reached more than $1.1 billion.
“I think anytime you have a category that's growing that rapidly, they're going to take a look at it, but it's very concerning with the way they are structuring it, because they are looking at a CGM from a commodity perspective,” says Adam Nadler, CEO & co-founder of Quest Health Solutions. “They think you just ship something in a box, but because patients don't really have that training and education, that's where the supplier becomes important. Applying the same pricing model used for rentals just, I think, shows a fundamental misunderstanding of the product.”
Proposed model raises sustainability concerns
CMS suggests reclassifying CGMs under the frequent and substantial servicing payment category and including them in a new Remote Item Delivery (RID) Competitive Bidding Program (CBP). The agency proposes a monthly capped rental model covering both the device and supply replacements. But with reimbursement potentially dropping to $4.77 per month, Nadler warns the rate is unsustainable and would force providers to overhaul their business models.
“From the cost perspective of a DME, and as you scale, it changes the business model,” said Nadler. “(Currently), we're able to recoup some of that money based on the reimbursement of the reader upfront. (Under the proposal), now you're laying out all this money and trying to get it back over five years. You need to have a lot of cash on hand to actually support that and then it'll take 20 months to break even just on the product itself.”
In past bidding rounds, CMS focused on glucometers and test strips, with 15 to 20 manufacturers in the mix, says Shawn McCoy, president of Eclipse Medical. In contrast, the CGM market is dominated by just two players – Abbott and Dexcom. That sets up a different dynamic for bidding and, potentially, any savings CMS might be expecting.
“There were a lot of low-cost alternatives to the big four (for glucometers and test strips),” he said. “That meant there were a lot of inferior products on the market, which had a lower cost basis, and I think that was one of the things that led to the very aggressive bids.”
Limited market heightens access concerns
CMS also proposes capping the number of RID CBP contracts for CGMs at nine. By comparison, 11 contracts were awarded in the 2016 Round 2 Recompete for diabetes testing supplies. McCoy says this could restrict patient access and diminish service quality.
“That’s the thing that often gets overlooked – if you go to one national provider or a handful of regional suppliers and weed out all of the competition, all you're doing is hurting the patients,” he said. “When you've taken away choice, you ultimately get poor service.”
Providers argue that compressing the market benefits no one – not suppliers, not patients, and not payers.
“You’re forcing people to essentially cut their value-based care – it’s like stepping over dollars to save pennies,” said Jordan Soblick, COO of Specialty Medical Equipment. “We saw the last round of bidding backfire because providers understand what their cost is. There's only so much that you're going to squeeze providers and the answer is not cheaper pricing.”
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