DMEPOS Competitive Bidding Round 2021
The Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program was established by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA). Under the DMEPOS Competitve Bidding Program, DMEPOS suppliers compete to become Medicare contract suppliers by submitting bids to furnish certain items in competitive bidding areas (CBAs). The statute requires that single payment amounts (SPAs) replace the current Medicare DMEPOS fee schedule payment amounts for selected DMEPOS items in certain areas of the country. The SPAs are determined by using bids submitted by DMEPOS suppliers.
The DMEPOS Competitive Bidding Program was implemented on January 1, 2011. The Round 1 2017 contracts and prices were implemented on January 1, 2017, and the Round 2 Recompete and the National Mail-Order (NMO) Recompete contracts and prices were implemented on July 1, 2016. All DMEPOS Competitive Bidding Program contracts expired on December 31, 2018. Starting January 1, 2019, there is a temporary gap period in the DMEPOS Competitive Bidding Program that CMS expects will last two years through December 31, 2020.
The DMEPOS Competitive Bidding Program has been an essential tool to help Medicare set market-based payment rates for DMEPOS items, save money for beneficiaries and taxpayers, and limit fraud and abuse in the Medicare Program. The program has saved billions of dollars since implementation, while ensuring access to quality items and services.
Round 2021 Updates
Competitive Bidding Areas
CMS is consolidating the CBAs that were included in Round 1 2017 and Round 2 Recompete by conducting Round 2021 in the same geographic areas for a total of 130 CBAs.
CMS is shifting some items to different, smaller product categories to accommodate the lead item pricing methodology. As a result, the 16 product categories listed below are included in Round 2021. Items newly included in the DMEPOS Competitive Bidding Program are off-the-shelf (OTS) back braces, OTS knee braces, and non-invasive ventilators.
- Commode Chairs
- Continuous Positive Airway Pressure (CPAP) Devices and Respiratory Assist Devices (RADs)
- Enteral Nutrition
- Hospital Beds
- Negative Pressure Wound Therapy (NPWT) Pumps
- Non-Invasive Ventilators
- OTS Back Braces*
- OTS Knee Braces*
- Oxygen and Oxygen Equipment
- Patient Lifts and Seat Lifts
- Standard Manual Wheelchairs
- Standard Power Mobility Devices
- Support Surfaces (Groups 1 and 2)
- Transcutaneous Electrical Nerve Stimulation (TENS) Devices
* The law requires that OTS orthotics or braces be included in the DMEPOS competitive bidding program, specifically, “orthotics which require minimal self-adjustment for appropriate use and do not require expertise in trimming, bending, molding, assembling, or customizing to fit to the individual.” Medicare Regulations define “minimal self-adjustment” as “an adjustment that the beneficiary, caretaker for the beneficiary, or supplier of the device can perform and does not require the services of a certified orthotist or an individual who has specialized training.” In cases where a beneficiary is not physically able to adjust the brace, the adjustment may be performed by the caretaker for the beneficiary or the supplier of the brace. The adjustment has to be one that a beneficiary, in general, could make themselves, following education and training on the proper use of the device, but the individual beneficiary does not always have to make the adjustment in order for the brace to be classified as OTS. When the beneficiary has a medical need for a brace that requires more than minimal self-adjustment and the brace has to be trimmed, bent, molded, assembled, or customized by an individual with expertise, the brace is not an OTS brace. The same back or knee brace may have separate codes in the event that the beneficiary needs the brace to be custom fitted. Payment for custom fitting is included in the separate code for the custom fitted brace. Please contact the Pricing, Data Analysis, and Coding (PDAC) contractor with any questions regarding product classification or to submit a request for reconsideration.
As a result of Section 50414 of the Bipartisan Budget Act (BBA) of 2018, CMS is not including a national mail-order (NMO) program for diabetes testing supplies in Round 2021. Section 50414 of the BBA of 2018 mandates several changes to the NMO program, and CMS is working on making these required changes.
Lead Item Pricing
In Round 2021, CMS is implementing the lead item pricing methodology for all items included in the product categories as established in the final rule (CMS-1691-F) published on November 14, 2018. This means that rather than submitting individual bids for each item within a product category, bidders will only submit one bid for the lead item in the product category. The supplier’s bid for the lead item represents the supplier’s bid for furnishing the lead item and all other items (the non-lead items) in the product category. Bids for the lead item in the product category will be used to calculate the SPAs for all of the items within that product category. The SPA for the lead item is the maximum bid submitted for that item by bidders whose bids for the item are in the winning range in that CBA and product category combination. The SPAs for the non-lead items within the product category are determined by multiplying the lead item SPA by a relative ratio. The ratios are based on the historic differences in the fee schedule amounts for the lead item and non-lead items.
Single Payment Amounts
In prior rounds of the DMEPOS Competitive Bidding Program, the SPA for an item was equal to the median of the bids submitted for that item by bidders whose composite bids were equal to or below the pivotal bid for that product category in a CBA. In Round 2021, based on policies established in the final rule (CMS-1691-F) published on November 14, 2018, the SPA for a lead item is equal to the maximum bid submitted for that item by bidders whose lead item bids for the product category are equal to or below the pivotal bid for that product category in a CBA.
Bid Surety Bonds
Section 522(a) of Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) required a bid surety bond for suppliers bidding in the DMEPOS Competitive Bidding Program. Bidders must obtain a $50,000 bid surety bond from an authorized surety on the Listing of Certified Companies on the Department of the Treasury’s website for each CBA for which they submit a bid. A copy of the bid surety bond(s) must be uploaded in Connexion, the DMEPOS Competitive Bidding Program’s secure portal, by the close of the bid window.
When a bidding entity is offered a contract for a CBA and product category combination (competition) and its composite bid for the competition is at or below the median composite bid rate for all bidding entities included in the calculation of the single payment amounts within the competition, and the bidding entity doesn’t accept the contract offer, its bid surety bond for that CBA will be forfeited. If the forfeiture conditions aren’t met, the bid surety bond liability will be returned to the bidder within 90 calendar days of the public announcement of the Round 2021 contract suppliers.
Required Financial Documents Evaluation
All required financial documents must be uploaded in Connexion by the close of the bid window. However, in an effort to limit disqualifications in Round 2021, if a financial document(s) is deemed unacceptable (e.g., ending cash on the statement of cash flows doesn’t equal the cash reported on the balance sheet), the bidder won’t automatically be disqualified. Rather, these bidders will receive a zero score for all financial ratios associated with the unacceptable document(s). In these situations, a bidder may still be able to receive a financial score that meets the financial requirements and be eligible for further evaluation.
Licensure and Accreditation Requirements for Bidders
In prior rounds of the DMEPOS Competitive Bidding Program, if a bidder included multiple locations (identified by a Provider Transaction Access Number (PTAN)) on a bid for a CBA and product category combination, those locations could collectively meet the accreditation and applicable state licensing requirements for the larger product categories including multiple products (e.g., general home equipment product category). However, as discussed above, some items and services have been shifted to different, smaller product categories to accommodate the lead item pricing methodology. As a result of these smaller product categories, each individual supplier location on a bid must meet all accreditation and applicable state licensing requirements for every item in the product category to be considered for a contract. For instance, if the accreditation and state licensing requirements to furnish CPAP devices and/or supplies are different from the accreditation and state licensing requirements to furnish RADs, each supplier location on the supplier’s bid for the CPAP devices and RADs product category must meet the accreditation and state licensing requirements to furnish both RADs and CPAP devices and/or supplies.
Round 2021 Precluded Suppliers
Contract Suppliers whose contract for Round 2 Recompete, National Mail-Order Recompete and/or Round 1 2017 was terminated and who were ultimately precluded from participation in the next round of bidding aren’t permitted to participate in Round 2021 of the DMEPOS Competitive Bidding Program. All precluded suppliers will receive a letter from the Competitive Bidding Implementation Contractor before the opening of the bid window as a reminder that they are precluded from participating in Round 2021.
Review of Bid Disqualification
There’s no administrative or judicial review for the awarding of DMEPOS competitive bidding contracts (section 1847(b)(11)(B) of the Social Security Act and 42 CFR §414.424(a)(2)). However, bidders that receive a bid disqualification notification in Connexion will have the opportunity to submit an inquiry about their bid disqualification(s), just as CMS has allowed in previous rounds of competition. However, new for Round 2021, the inquiry must be submitted in Connexion within 30 calendar days of the date on the bid disqualification notification. No new or follow-up inquiries can be uploaded after the 30 calendar day deadline. Upon receipt of the inquiry, CMS will re-evaluate all bid disqualification reasons, and the bidder will receive a notification in Connexion with CMS’ findings. Please note that the bid surety bond requirements and forfeiture conditions under 42 CFR §414.412(g) apply to all bidders, including bidders that receive contract offers after the resolution of the bidder inquiry process.
Round 2021: Important Dates
To ensure that bidders have ample time to prepare for Round 2021, CMS has announced the following next steps for the program:
March 7, 2019
- CMS begins pre-bidding supplier awareness program
- CMS announces specific dates for registration and bidding
- CMS begins bidder education program
- Bidder registration period to obtain user ID and passwords begins
- Bid window opens
*Dates listed are target dates
Suppliers Interested in Bidding: Prepare Now – Don’t Wait!
Get Bonded: As noted above, all bidders in Round 2021 are required to obtain a bid surety bond in the amount of $50,000 for each CBA in which they submit a bid. Bidders must contact an authorized surety from the Listing of Certified Companies on the Department of the Treasury’s website: https://www.fiscal.treasury.gov/fsreports/ref/suretyBnd/c570_a-z.htm. Bidders may want to reach out to the surety that provided their bond for enrollment with the National Supplier Clearinghouse (NSC). It is important to note, however, that bid surety bonds required for bidding in the DMEPOS Competitive Bidding Program are NOT the same as the surety bonds required for DMEPOS supplier enrollment purposes. Bid surety bonds must meet all requirements outlined in 42 CFR §414.412(g).
Get Licensed: Contracts are only awarded to bidders that meet all applicable licensing requirements by the close of the bid window. Licensing requirements change periodically, and it remains the responsibility of the bidder to identify, obtain, and have all current, non-expired required licenses reflected in the Provider Enrollment, Chain, and Ownership System (PECOS) by the close of the bid window. Each supplier location on the bid must be licensed for all lead and non-lead items in the product category by the state in which it furnishes or plans to furnish if awarded a DMEPOS competitive bidding contract. It is up to the bidder to confirm which states require a license(s).
The NSC provides a DMEPOS State License Directory for each state, the District of Columbia, and the U.S. territories. This directory provides general licensing requirements for DMEPOS product categories and contact information for each state’s licensing board or agency. This is only a guide. Licensing requirements change periodically and it remains the responsibility of the bidder to identify, obtain, and have all current, non-expired required licenses reflected in PECOS by the close of the bid window. For more information about licensing requirements, please consult the appropriate licensing board/agency listed in the directory.
Get Accredited: Each supplier location on a bid must be accredited by a CMS approved accrediting organization for the lead and non-lead items in a product category. Any supplier who is interested in bidding for a product category but does not have its location(s) currently accredited for that product category must take action NOW to get accredited for that product category. Accrediting organizations report any accreditation updates to the NSC, so it is important that suppliers get accredited early so their information will be up to date. CMS cannot contract with suppliers that are not accredited by a CMS approved accrediting organization.
Further information on the DMEPOS accreditation requirements along with a list of the accrediting organizations and those professionals and other persons exempted from accreditation are available on the CMS website.