What is Competitive Bidding?

Competitive Bidding is the Law!

The DMEPOS Competitive Bidding Program was mandated by Congress through the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) to replace the current fee schedule payment methodology for selected Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) items with a competitive bid process.  The intent is to reduce beneficiary out-of-pocket expenses and save the Medicare program money while ensuring beneficiary access to quality items and services.

Under the program, a competition among suppliers in a Competitive Bidding Area (CBA) is conducted.  Suppliers are required to submit an electronic bid for selected products.  Bids are evaluated based on the supplier’s eligibility, its financial stability and the bid price.  Contracts are awarded to the Medicare suppliers who offer the best price and meet applicable quality and financial standards.  This bid process is a closed competitive bid.

In April 2007, the Centers for Medicare & Medicaid Services (CMS) announced the Medicare DMEPOS national competitive bidding program final Rule and the first-round competitive bid areas and product categories.

In March 2008, Round 1 of the competition was completed and contracts were awarded.

In July 2008, the House and Senate voted to overturn President George W. Bush's veto of H.R. 6331. The Medicare Improvements for Patients and Providers Act of 2008 included a temporary delay of the DMEPOS competitive bidding program to allow time for critical process improvements and other reforms to bidding and HME policy.  COMPETITIVE BIDDING WAS NOT CANCELLED.  However, the Round 1 contracts were canceled and the Round 2 competition was delayed until 2011.  See H.R. 6331, section 154 (Delay and Reform of Medicare DMEPOS Competitive Acquisition Program).

IMPORTANT: Suppliers who are not awarded a contract are excluded from providing Bid Category Products within the CBA for 3 years.
 

COMPETITIVE BID IMPLEMENTATION CONTRACTOR (CBIC)

CBIC administers the DMEPOS Competitive Acquisition Program.  CBIC is responsible for conducting certain functions including performing bid evaluations, selecting qualified suppliers, setting payments for all competitive bidding areas and overseeing an education program.  CBIC also assists CMS and its contractors in monitoring the program’s effectiveness, access, and quality.   When Round 2 of Competitive Bidding starts, the CBIC website will provide detailed information regarding the bid process.

What is a Product Category?

The Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) designated the items that were included in the Round 1 Rebid.  These "Items" are defined as a product included in a competitive bidding program that are identified by a Healthcare Common Procedure Coding System (HCPCS) code.  A product category includes a group of related HCPCS such as Standard Power Wheelchairs and accessories. More info on Product Categories!

What are Round 2 Competitive Bid Areas?

There are currently 91 Competitive Bid Areas (CBAs) in Round 2.  Click  here for list of CBAs.

Who Qualifies to Bid?

Suppliers who have an active National Supplier Clearinghouse supplier number.  There are CMS Qualifications and Agape has established our Bid Package Client Qualifications.

Who Should Bid in Round 2?

Suppliers who provide products or services to Medicare beneficiaries located in the CBA regardless of the supplier's physical location.  Suppliers located outside of the Competitive Bid Areas should consider whether their company can service patients in one or more CBAs because losing a bid means being unable to sell Bid Products to patients in a CBA for 3 years.