Today CMS announced the product categories and specific competitive bidding areas (CBAs) for Round 2 of the Medicare durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) competitive bidding program. Under competitive bidding, only suppliers who are winning bidders, meet licensing and other standards, and enter into a contract with CMS may furnish selected categories of DMEPOS to Medicare beneficiaries in the CBAs (with very limited exceptions). Contract suppliers are paid based on the winning bids in the CBA, rather than the traditional DMEPOS fee schedule. The Round 1 “Rebid” went into effect January 1, 2011 in nine CBAs and nine product categories. Round 2 will take place in 100 CBAs, covering 91 metropolitan statistical areas (three of the largest MSAs were subdivided into multiple CBAs). CMS plans to begin bidding in winter 2012, and the agency previously announced it expects Round 2 contracts to take effect in the summer of 2013.

According to today’s announcement, Round 2 will include the following product categories:

  • Oxygen Supplies and Equipment
  • Standard (Power and Manual) Wheelchairs, Scooters, and Related Accessories
  • Enteral Nutrients, Equipment and Supplies
  • Continuous Positive Airway Pressure (CPAP), Respiratory Assist Devices (RADs), and Related Supplies and Accessories
  • Hospital Beds and Related Accessories
  • Walkers and Related Accessories
  • Support Surfaces (Group 2 mattresses and overlays)
  • Negative Pressure Wound Therapy (NPWT) Pumps and Related Supplies and Accessories

Each product category is composed of multiple items that are identified by Healthcare Common Procedure Coding System (HCPCS) codes.  The Round 2 categories differ from the Round 1 rebid in the following ways: CMS combined standard manual wheelchairs, standard power wheelchairs, and scooters into an expanded standard mobility device product category; CMS added the NPWT category; bidding for support surfaces was extended throughout all Round 2 areas; and Group 2 complex rehabilitative power wheelchairs, which were in the Round 1 Rebid, are not included in Round 2. 

In addition, CMS will be conducting a national mail-order competition for diabetic testing supplies concurrent with the Round 2 competition.  The national mail-order competition includes all parts of the United States, including the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam and American Samoa.

CMS also released the zip codes included in the Round 2 CBAs.  

CMS estimates that the expanded DMEPOS competitive bidding program will save more than $28 billion over the first 10 years of the program (including $17 billion in Medicare program savings and $11 billion in beneficiary savings).

For background on the DMEPOS competitive bidding program, see our previous reports.  We will continue to track developments in this important program.