WASHINGTON, D.C. – On November 29, 2025, the Centers for Medicare and Medicaid Services (“CMS”) posted a final rule making changes to the Medicare durable medical equipment, prosthetics, orthotics and supplies (“DMEPOS”) competitive bidding program. This final rule makes significant structural, bidding and other programmatic changes to the next round of competitive bidding.
CMS announced that for the next round of bidding, it will only be implementing Remote Item Delivery (“RID”) competitive bidding programs (“CBPs”), which will likely be national contracts for seven product categories, many of which have never been previously subject to competitive bidding. The seven product categories will be:
1) Class II Continuous Glucose Monitors (CGMs) and Insulin Pumps
2) Urological Supplies
3) Ostomy Supplies
4) Hydrophilic Urinary Catheters
5) Off-The-Shelf (“OTS) Back Braces
6) OTS Knee Braces, and
7) OTS Upper Extremity Braces
CMS will not be including any additional product categories in the next round of the CPB, such as oxygen, CPAP, standard wheelchairs, hospital beds, walkers, etc.
New Rules for the Competitive Bidding Program
Single Payment Amounts (SPAs)
The bid payment amount for a HCPCS code is called the “single payment amount” or SPA. Bidders bid on the “lead item” in each product category. CMS will array bidders’ bids for the lead item in a product category from low to high. Then, starting at the lowest bidder, it will select the number of contractors needed.
The lead item SPA will be based on the 75th percentile of bids among the contractor. The SPA for non-lead items will be the SPA for the lead item in the same product category. multiplied by the ratio of the 2015 fee schedule amount for the non-lead item for the area to the 2015 fee schedule amount for the lead item
Number of Contracts for a Product Category
For product categories that have never been bid before (e.g., urological supplies, ostomy supplies, and continuous glucose monitors), the number of contractors will be 125 percent of the number of DMEPOS suppliers that furnished at least three percent of the total utilization for the lead item in the product category and CBA during the most recent calendar year, rounded to the nearest whole number, with a minimum of two contract suppliers.
Using 2023 claims data, CMS estimates the following number of contractors for the following product categories (nationwide remote item delivery CBPs). CMS will use 2025 data to determine the number of contractors.
Urological supplies – 7 contractors
Ostomy Supplies – 8 contractors
Continuous Glucose Meters – 9 contractors
Adjustments to SPAs
CMS will apply annual inflation adjustments to the SPAs beginning in year two of each CBP contract period (previously there was no inflation adjustment to the SPAs for the duration of the three-year contract period).
Bid Limits
For product categories that have previously never been bid, the bid limit will be the current fee schedule amount. For previously bid items, the bid limit will be the most recent SPA plus 10 percent. If, the SPA was in effect more than one year ago, the bid limit cannot exceed the lesser of (i) the most recent SPA for the item adjusted by all the inflation updates since then, or (ii) the unadjusted fee schedule amount for the item. The bid limit cannot exceed the unadjusted fee schedule amount.
Conditions for Awarding Contracts
Credit Report Requirement
CMS will no longer require bidders to submit tax return extracts, income statements, balance sheets, and cash flow statements as part of the required financial documentation submission. CMS will continue to require bidders to submit a business credit report (score or rating). If the business does not have a business credit report with a numerical score or rating, the bidder will be required to submit: (i) a business credit report showing there is no data or insufficient information to generate a credit score; and (ii) a personal credit report or the rating from the supplier’s Authorized Organization or Delegated Official listed in PECOS. The personal credit report must be of the Authorized Official or Delegated Official listed in PECOS; otherwise, the supplier would not be eligible for a CBP contract.
The credit reports used for bid submissions must be finalized close to when the bid window opens. CMS will publish the applicable scoring list for each bid round in the round-specific Request for Bids (RFB) or in a Financial Scoring Methodology Fact Sheet to assist bidders with clear guidance. CMS will continue to use the five-tier scoring system in reviewing supplier credit scores, where a score of 12 or higher is passing. The scores are either 4, 8, 12, 16, or 20 points—with 4 being the worst score and 20 being the best.
CMS will add a field in the bid application that will require bidders to add their gross revenue. This information will assist CMS in determining if the supplier is a “small” supplier, defined as no more than $3.5 million in annual revenue CMS will review claims data to confirm the accuracy of the submission. Suppliers that falsify their information will be referred to the Office of Inspector General and the Department of Justice for further investigation.
Financial Documentation Requirements
A bidder must submit (i) a copy of its business’ credit report showing the approved crediting agency; (ii) a numerical credit score or rating; (iii) the bidding entity’s name; and (iv) the date that the credit report was prepared no earlier than 90 calendar days prior to the opening of the bid window.
If the bidder does not have a numerical score or rating, the bidder must submit (i) a business credit report showing no data or insufficient information to generate a credit score; and (ii) a personal credit report or the rating from the supplier’s Authorized Official (AO) or Delegated Official (DO) listed in PECOS. The personal credit report must be of the AO or DO; otherwise, the bidder is not eligible for a CBP contract.
Commonly owned and/or commonly controlled bidding entities (Bidding Entities) are prohibited from competing against themselves when submitting bids in the same competition. When bidding opens, Bidding Entities must register one time with a primary Provider Transaction Access Number (PTAN) which designates the primary location in the bidding system and identifies the entity responsible party for all contractual requirements. The bidding entity must attest in the bidding system that it is submitting one bid that includes all commonly owned and/or commonly controlled locations, and that it will furnish the lead item and all non-lead items in the same competition.
Credit scores will no longer be used to consider capacity. CMS retains a five-tier financial scoring system but will not use the financial score to determine supplier capacity. The scores are either 4, 8, 12, 16, or 20 points—4 being the worst and 20 being the best.
The application will require bidders to add their gross revenue. This will assist CMS in determining if the supplier is a small supplier, which is defined as having annual gross revenues of $3.5 million or less
Bid Surety Bonds
CMS is codifying the process it used in the previous round of the CBP where it provides bidders a single, 10-business-day window to fix issues with their bid surety bond by submitting a corrected bond rider. If a bond is found to be incorrect, incomplete, or missing required information, CMS will notify the bidder through the DMEPOS CBP’s secure portal.
The bidder will then be allowed to submit a corrected bond rider within those 10-business days. CMS will only notify bidders of deficiencies that can be corrected with a bond rider. The rider must be from the authorized surety that issues the original surety bond
Bidders have previously and will continue to be required to obtain a bid surety bond for the CBA from an authorized surety on the Department of Treasury’s Listing of Certified Companies and provide proof of having obtained the bond by submitting a copy to CMS by the bid submission deadline.
Cara C. Bachenheimer, Esq., is an attorney with the Health Care Group at Brown & Fortunato, a law firm with a national health care practice based in Texas, where she heads up the firm’s Government Affairs Practice. Bachenheimer’s practice focuses on federal lobbying activities with Congress, the Administration, and federal regulatory agencies, such as CMS, FDA, IRS, and FAA. She can be reached at (806) 345-6321 or [email protected]
Jeffrey S. Baird, Esq., is chairman of the Health Care Group at Brown & Fortunato, PC, a law firm with a national health care practice based in Texas. He represents pharmacies, infusion companies, HME companies, manufacturers and other health care providers throughout the United States. Baird is Board Certified in Health Law by the Texas Board of Legal Specialization and can be reached at (806) 345-6320 or [email protected].
