WASHINGTON, D.C. – On June 30, 2025, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule that would make significant negative changes to the Medicare competitive bidding program (CBP) for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) (CMS-1828-P, 90 Fed. Reg. 29108, July 2, 2025 – The DMEPOS proposed rule is part of the CMS annual proposed rule for home health agencies).

Comments are due to CMS by August 29, 2025, and can be submitted online. We expect CMS to issue a final rule around November 1, 2025, with an effective date of January 1, 2026. CMS does not provide any information about when the next CBP would begin, but based on prior programs, CMS could start the implementation process early in 2026. You can locate the CMS proposed rule here.

Overall, the proposed regulatory changes appear to be designed to reduce Medicare payment amounts and reduce the number of contract suppliers who can serve Medicare beneficiaries. In addition to the CBP changes, CMS is proposing significant changes to the provider enrollment process, to accreditation organization policies (including annual inspections), and to DMEPOS prior authorization processes. While the proposed rule does not technically propose to include particular DMEPOS items in the CBP, it does provide examples of payment changes that would occur with the inclusion of medical supplies (e.g., urological and ostomy supplies) and continuous glucose monitors (CGMs) in future bid programs.

CMS proposes a newly defined “remote item delivery” as a national or regional competitive bidding program where items may be shipped or delivered to a beneficiary’s home, or the item could be 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 is not making any changes to the regulations that require “lead item” bidding where bidders submit a bid only on the “lead item” for a product category.

Terms and Acronyms
CBP – competitive bidding program;
SPA – single payment amount, the bid price that contractor get paid for an item;
CBA – competitive bidding area;
Unadjusted fee schedule – DMEPOS fee schedules that were in effect 2015; and
Adjusted fee schedules – DMEPOS fee schedules adjusted by the previous SPAs.

Following is a brief summary of some of the most significant proposed changes to the CBP.

Proposed Changes to the Bid Ceiling
For items previously included in CBP, the lead item in a product category included in a prior competition could not exceed, for the same CBA, the lesser of the most recent SPA plus 10 percent or the unadjusted fee schedule for the item. If it has been more than one year since an SPA was paid for the item in the prior competition, the bid amount must not exceed the lesser of the most recent SPA for the item, adjusted by the CPI updates since the SPA was in effect, plus 10 percent, or the unadjusted fee schedule amount for the item. For items not included in prior competitions, the lead item bid amount could not exceed the current (unadjusted) fee schedule for the lead item.

Proposed Changes to the Financial Documents: CMS is proposing to require that bidders only submit a business credit report with a numerical credit score or rating (CMS required significant additional financial documentation in previous CBPs).

Proposed Changes to Selection of Contractors: CMS has different proposed processes to select contractors depending on whether the product category has been included in previous bid rounds. The objective is to significantly reduce the number of contract suppliers to provide items included in the CBP.

For product categories not previously subject to competitive bidding, the number of contract suppliers selected to furnish items and services would be at least 2, but no more than 125 percent of the number of suppliers that furnished at least 3 percent of total utilization for the lead item in the product category and CBA during the most recent calendar year, and rounded to the nearest whole number.

For competitions included in the CBP in 2018 or 2023, the first time a competition is recompeted after 2023, the number of contract suppliers selected would be no more than double the number of contract suppliers that furnished at least 5 percent of total allowed services for the lead item furnished by contract based on the percentage change in Part B enrollment in the CBA since 2018 or 2023, and suppliers to the applicable beneficiary population during 2018 or 2023, adjusted up or down rounded to the nearest whole number. CMS would then adjust the number of contract suppliers so that the number of contract suppliers would be not less than 50 percent of the total number of contract suppliers that furnished the lead item in 2018 or 2023 rounded up to the nearest whole number; and more than 75 percent of the total number of contract suppliers that furnished the lead in 2018 or 2023 rounded down to the nearest whole number; and at least 2.

Proposed Inclusion of Medical Supplies: Despite the clear statutory language prohibiting CMS from including medical supplies such as urological, ostomy, and wound care supplies in the CBP, CMS states that it believes it can (and would likely) include these items in competitive bidding.

Proposal for Bids for Continuous Glucose Monitors: CMS is proposing “remote item delivery” (RID) competitive bidding for CGMs/supplies. CMS is proposing changes to the payment method that would result in significant payment reductions. The proposed rule would change the payment category for CGMs to “frequent and substantial servicing,” a continuous monthly rental (as long as medial need exists), to allow beneficiaries to receive updated technology, software updates, etc. CGMs/supplies provided outside CBAs would have their payment amounts reduced to the SPA levels.

CMS explains that bidders would submit bids for the rental of CGMs and provision of all supplies, but the bid limit could not exceed the amount Medicare otherwise pays for supplies plus the average purchase amount for the CGM divided by 60 months. To illustrate, CMS uses the following example:

• 2025 average fee schedule for E2103 (purchase) – $286.03; divided by 60 = $4.77 per month.
• 2025 average fee schedule for A4239 supplies = $267.92.
• Sum of $4.77 + $267.92 =$272.69.
• Therefore, bidding entities competing to be a nationwide contract supplier for these items would need to submit bids that are lower than the monthly bid limit of $272.69 in this example.

There are numerous other important details that merit review. The American Association for Homecare has an extensive analysis, is lobbying Capitol Hill, working with allied organizations, and will be submitting detailed comments to CMS. It is vital that all affected stakeholders educate Congress and other policy makers about the likely detrimental impacts if this proposal is finalized and implemented.

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].