The DMEPOS Competitive Bidding Program changes the amount Medicare pays for certain equipment like walkers and wheelchairs using market-based prices, while maintaining beneficiary access to items and services and quality of care. The program replaces the outdated, inflated fee-schedule prices Medicare paid for these items with lower, more accurate prices to help Medicare and its beneficiaries save money while ensuring access to quality equipment, supplies, and services. This program also helps limit fraud and abuse in Medicare.

The Medicare DMEPOS Competitive Bidding Program has saved more than $580 million in nine markets at the end of the Round 1 Rebid’s 3-year contract period (January 1, 2011 through December 31, 2013) due to lower payments and decreased unnecessary utilization. The expansion of the Competitive Bidding Program – Round 2 and the national mail-order recompete program – saved approximately $2 billion in its first year (July 2013- July 2014).

“CMS is achieving additional savings as part of the Affordable Care Act’s expansion of the competitive bidding program,” said Sean Cavanaugh, CMS deputy administrator and director of the Center for Medicare. “Data used to monitor the effectiveness of the overall competitive bidding program show that implementation is going smoothly, with few inquiries or complaints and no adverse changes to beneficiary health outcomes.”   

CMS is required by section 1847(b)(3)(B) of the Social Security Act to recompete contracts under the DMEPOS Competitive Bidding Program at least once every three years. Suppliers must then compete to become a Medicare contract supplier by submitting bids to provide certain items in competitive bidding areas. The new, lower payment amounts resulting from the competitions replace the fee schedule amounts for the bid items in these areas.