CMS Proposes Major Reforms to Medicare’s DMEPOS Program

The Centers for Medicare & Medicaid Services (CMS) has introduced significant proposals aimed at overhauling the Medicare Competitive Bidding Program (CBP) for Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS). The proposed reforms include changes to payment structures, accreditation requirements, and prior authorization processes, with comments due by 5 p.m. EDT on September 2, 2025.

One of the key aspects of the proposed rule is the anticipated announcement of the next round of the DMEPOS CBP. CMS suggests that previous bidding rounds, particularly Round 2021, were largely unsuccessful due to payment amounts that did not generate expected savings. In this context, the proposed changes aim to enhance the competitiveness and effectiveness of the program.

Proposed Changes to CBP and Payment Methodology

The proposed rule outlines extensive revisions to the bidding rules and pricing methodologies used to determine payment amounts. CMS plans to return to a median bid methodology or adopt a new 75th percentile bid methodology, both aimed at reducing the risk of outlier bids skewing prices. This means that suppliers might receive contracts at amounts lower than their original bid.

Additionally, CMS proposes to reduce the number of contracts awarded, suggesting a minimum of two suppliers per competitive bidding area (CBA), down from the current regulatory minimum of five. This approach is designed to foster a more competitive environment, particularly benefiting large suppliers who may have less incentive to lower their bids in an oversaturated market.

The proposed changes also expand the scope of competitively bid items to include certain urological, ostomy, and tracheostomy supplies, alongside continuous glucose monitors (CGMs), which would be included in the next CBP round for the first time.

Accreditation Process Overhaul and Compliance Monitoring

In a bid to strengthen oversight, CMS is proposing an overhaul of the accreditation process for DMEPOS suppliers. This includes shortening the standard accreditation cycle from three years to one year, mandating annual surveys by accrediting organizations (AOs) regardless of past performance. This change is intended to enhance compliance monitoring and ensure that deficiencies are addressed promptly.

The revised rule would also impose new performance and accountability requirements on AOs, including uniform survey practices and standardized corrective action plan protocols. AOs could face suspension or termination if they fail to enforce compliance, and they must report immediate jeopardy deficiencies to CMS.

Moreover, CMS is introducing a new category of bidding for items supplied remotely, termed the Remote Item Delivery (RID) CBP. This category will cater to items typically furnished from remote locations to beneficiaries, with examples including CGMs and back braces.

In addition, CMS plans to reclassify CGMs and insulin infusion pumps under a new payment category that requires frequent servicing. This change could allow for monthly rental payments that include necessary supplies, reflecting the rapidly evolving technology in the field.

CMS is also clarifying the prior authorization exemption process for certain DMEPOS items. Under the proposed rule, only suppliers actively billing for an item and not subject to payment suspension would qualify for the exemption. This adjustment aligns the regulation with existing practices and ensures that only compliant suppliers benefit from the exemption.

Stakeholders are encouraged to review the proposed changes closely and submit comments, as the finalization of these reforms could significantly impact compliance obligations for DMEPOS suppliers, accrediting organizations, and all Medicare providers. As these proposals unfold, their implications for the future of Medicare payment processes remain to be seen.