AMARILLO, TX – 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.
Competitive Bidding Program Rules that Have Not Changed
Basic Eligibility Rules
Bidders must (i) meet basic eligibility rules, including meeting current Medicare enrollment requirements and (ii) be in compliance with all state and local requirements, including licensure. Suppliers are required to submit “bona fide” bids, meaning that the bid amount must cover the cost of the item, as well as costs to deliver and educate the beneficiary and be in compliance with all Medicare requirements.
Lead Item Bidding
Bidders submit a bid price for the lead item in a product category. The lead item is the item in a product category with the highest total nationwide Medicare allowed charges of any item in the product category, prior to each competition.
Commonly Owned or Controlled Suppliers
A supplier must list in its bid all other suppliers with which it is commonly owned or controlled. Commonly-owned or controlled suppliers must submit a single bid to furnish a product category in a CBA. If commonly-owned or controlled suppliers are awarded a contract, the suppliers listed in the bid will be considered contract suppliers for that CBA and product category.
Suppliers are commonly-owned if one or more of them has an ownership interest totaling 5% or more in the other(s). An ownership interest is the possession of equity in the capital, stock, or profits of another supplier. Suppliers are commonly controlled if one or more owners of a supplier is an officer, director, or partner in the other supplier(s).
Small Supplier Participation Targets
Both the Social Security Act and CMS’s implementing regulations state that CMS must give small suppliers “the opportunity to participate” in the CBP. There is not a requirement that small suppliers be included in the CBP. CMS has implemented this small supplier “opportunity to participate” requirement by setting a target of 30 percent of the number of contractors to be small suppliers. If there is not this number of small suppliers in the initial array of contractors, CMS will select additional small suppliers whose compositive bids are above the pivotal bid for the product category and offer contracts to those small suppliers.
Mandatory Assignment
Contract suppliers must accept assignment on all competitive bid items under its contract from any beneficiary who maintains a permanent residence in, or who visits, the CBA and who requests those items from that contract supplier. Contract suppliers may still use an Advance Beneficiary Notice, per current Medicare rules.
Physician Prescription for a Particular Brand of Item
A physician may prescribe a particular brand of item if he or she determines that the particular brand would avoid an adverse medical outcome for the beneficiary. When a physician prescribes a particular brand of item, the physician must document the reason in the beneficiary’s medical record why the particular brand is medically necessary to avoid an adverse medical outcome.
When a physician prescribes a particular brand of item, the contract supplier must (i) furnish the particular brand that is prescribed, (ii) consult with the physician to find an appropriate alternative brand of item and obtain a revised prescription, or (iii) assist the beneficiary in locating a contract supplier that can furnish the particular brand of item. Medicare does not make any additional payment to a contract supplier for furnishing a particular brand prescribed by a physician, and a contract supplier is prohibited from submitting a claim if it furnished a brand of item that is different than what the physician specified.
Terms of Contracts
Contracts are for a period of three years. Contract suppliers are not allowed to discriminate by providing Medicare beneficiaries different items than it would provide to their non-Medicare customers.
Change of Ownership
CMS may transfer a contract to a successor entity that merges with, or acquires, a contract supplier if the successor entity (i) meets all the requirements applicable to contract suppliers for the applicable competitive bidding program; (ii) submits the documentation described in 42 C.F.R. § 414.414(b)-(d) if documentation has not previously been submitted by the successor entity; and (iii) submits to CMS a signed novation agreement acceptable to CMS stating it assumes all obligations under the contract.
RELATED
Competitive Bidding: A Summary – Part 1
Competitive Bidding: A Summary – Part 2
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. Ms. 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. Mr. 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].
