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:
- Class II Continuous Glucose Monitors (CGMs) and Insulin Pumps
- Urological Supplies
- Ostomy Supplies
- Hydrophilic Urinary Catheters
- Off-The-Shelf (“OTS) Back Braces
- OTS Knee Braces, and
- 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
Inclusion of Medical Supplies
CMS revised the definition of “items” that can be included in the CBP to include “other medical equipment described in section 1861(m)(5) of the Act, including supplies related to ostomy care and urological supplies.” The final rule specified that ostomy, tracheostomy, and urological supplies are medical equipment items that are authorized to be included in the DMEPOS CBP by section 1847(a)(2)(A) of the Social Security Act.
Remote Item Delivery (RID) CBP
Remote Item Delivery CBP is defined as “a competitive bidding program wherein contract suppliers are responsible for furnishing remote item delivery items under a product category to all Medicare beneficiaries regardless of where they live in the CBA. The CBA could be one nationwide CBA that includes all areas (all States, territories, and the District of Columbia) or a CBA covering a specific region of the country.”
Remote Item Delivery Item is defined as “an item falling under a remote item delivery competitive bidding program that may be shipped or delivered to a beneficiary’s home, regardless of the method of delivery, or picked up at a local pharmacy or supplier storefront if the beneficiary or caregiver for the beneficiary chooses to pick the item up in person.”
CMS may implement one nationwide RID CBP, or multiple regional RID CBPs. If established, it could cover smaller regions such as a State, territory or the District of Columbia or it could cover larger areas such as a group or combination of States, territories, and/or the District of Columbia.
Contract suppliers must furnish items primarily via mail order but may also furnish non-mail order items through a local storefront if they have one. Any RID CBP for off-the-shelf Orthotics will only include items that are appropriate for remote delivery.
Payment for CGMs and Insulin Infusion Pumps
CMS is changing the payment classification for CGMs and insulin pumps as items requiring frequent and substantial servicing. CMS will pay on a bundled monthly rental basis for Class II CGMs and insulin infusion pumps (and all necessary supplies). CMS is eliminating the 5-year replacement rule for CGMs and insulin infusion pumps. Non-CBP areas will also use the CBP-established bundled rental amounts.
Suppliers are required to furnish a specific brand of CGM or insulin pump included under the product category if the beneficiary requests the item from the contract supplier and the physician authorizes use of a specific brand of CGM or insulin pump as a part of his/her order.
Class II CGMs and insulin pumps phased in under the CBP will be paid for on a monthly rental basis in accordance with the payment rules for DME items requiring frequent and substantial servicing. Noncontract suppliers with grandfathered rental agreements in place at the time the new rules are phased in under a CBA may be continued under the existing grandfathering rules for items requiring frequent and substantial servicing if the supplier elects to be grandfathered, and will be paid based on the monthly rental amounts established under the CBP. Suppliers may bill for up to three months of rental in advance.
A supplier may elect to be a grandfathered supplier by providing a written notification to CMS of this decision. The grandfathered supplier is required to continue furnishing the grandfathered items to all beneficiaries who elect to continue receiving the grandfathered items from that supplier for the remainder of the rental period for that item.
A supplier that elects not to become a grandfathered supplier must provide a 30-day, 10-day, and 2-day notice to its Medicare beneficiaries who are currently renting competitively bid DME item(s) who live in a CBA. The supplier must pick up the item it is currently renting to the beneficiary from the beneficiary’s home after the proper notification.
Payment for replacement supplies and accessories for beneficiary-owned class II CGMs and insulin infusion pumps will be paid for under the CBP in accordance with the special temporary transition rules until the beneficiary-owned equipment is replaced.
The language for the special temporary transition rules applies to payments for supplies and accessories necessary for the effective use of beneficiary-owned CGMs and infusion pumps. CMS will continue, as applicable, to make separate payments under the CBP for supplies and accessories for Class II CGMs and insulin pumps owned by the beneficiary at the time CGMs and insulin pumps are phased in for the first time in a CBA where the beneficiary resides. This will continue until coverage for the beneficiary-owned equipment ends, the equipment is no longer used, or at any point when the equipment has been replaced with rented equipment under the CBP.
All CGMs and insulin pumps will be classified as items requiring frequent and substantial servicing beginning on the date Class II CGMs and insulin pumps are first phased in under the CBP. Payment for Class III CGMs and insulin pumps used in conjunction with Class III CGMs will be limited to the amounts established for Class II CGMs and insulin pumps under the CBP if these amounts are at least 15 percent lower than the fee schedule amounts for Class III CGMs and insulin pumps used in conjunction with Class III CGMs. Suppliers may bill for up to three months of rental in advance for all CGMs and insulin pumps, regardless of whether payment is made under the CBP or under the fee schedule.
Payment for replacement supplies and accessories for beneficiary-owned Class III CGMs and insulin pumps used in conjunction with Class III CGMs will be paid for under the fee schedule in the same amounts established for these items under the CBP until the equipment is replaced or the beneficiary elects to obtain new equipment from a contract supplier under the CBP.
Covered Document Review Date (CDRD) Process
The CDRD process requires CMS to notify bidders when there are missing documents. The CDRD is the later of 30 days before the final date for the closing of the bid window or 30 days after the opening of the bid window.
If at least one covered document is submitted by the CDRD, CMS will notify the supplier of any missing covered documents within 90 days after the CDRD. In prior competitions, CMS provided the supplier with notice regarding missing or received covered documents by the CDRD and by the close of the bid window. The Final Rule is modifying the process so that the notice will only inform the supplier if it has missing covered documents by the close of the bid window. The notification is limited to the timely submission of covered documents and not to the accuracy or completeness of documents submitted or whether the documents meet applicable requirements. Suppliers have 10 business days to submit missing documents.
Termination Clause for CBP Contracts
CMS may unilaterally terminate or modify CBP contracts during a Public Health Emergency (PHE) when (i) a PHE is declared, (ii) CMS finds verifiable access problems, (iii) awarding additional contracts will not resolve access concerns, and (iv) termination/modification would alleviate access issues.
To determine whether access problems exist, CMS will review data from (i) contract suppliers, (ii) CMS’s monitoring system, including, for example, complaints, claims data, and beneficiary outcomes), and (iii) other agencies, federal, state, and local. If at least two contract suppliers provide evidence that they can meet beneficiary demand, then CMS may elect not to terminate the contracts.
CMS may terminate a contract supplier’s entire contract if the PHE-impacted items and services in the PHE-impacted area include all competitions in the supplier’s contract. CMS may modify a contract supplier’s contract if the PHE-impacted items and services in the PHE-impacted area include only a portion of the competitions in the supplier’s contract. Any termination or modification will remain effective for the remainder of the contract term, even if the PHE ends before the contract expiration date.
After contract termination, CMS reverts affected areas to the fee-for-service program. The contractor is no longer obligated to furnish the specified items and services in the PHE-impacted area, and payment reverts to the fee-for-service amounts.
CMS Timeline for Implementing the Next Round of Bidding
CMS announced in a Press Release the following target dates for the CBP:
Late Spring/Early Summer 2026
• Dates for registration and bidding will be released.
• The leading items for the CBP product categories and the number of contracts to award for each product category will be announced.
• CMS will begin the bidder education Late
Summer/Early Fall 2026
• Bidder registration period to obtain user IDs and passwords begins
• Bid window opens
Late Summer/ Early Fall 2027
• Contracts awarded and single payment amounts
• Beneficiary education
No later than January 1, 2028
• Start of Next Round – Contracts and single payment amounts (SPAs in effect).
• Six-month transition period begins for beneficiaries to switch to contract
Cara C. Bachenheimer, JD, 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, JD, 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].
