Comments are due in less than a month on the Centers for Medicare & Medicaid Services (“CMS”) proposals to make significant structural reforms to Medicare’s Competitive Bidding Program (“CBP”) for Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (“DMEPOS”) and DMEPOS accreditation requirements as well as major revisions to the Medicare provider enrollment rules for all Medicare provider and supplier types (the “Proposed Rule”). Comments must be submitted no later than 5 p.m. EDT on September 2, 2025.
Among other things, the Proposed Rule signals that a CMS announcement of the next round of the DMEPOS CBP is forthcoming, with significant overhauls of the policies that applied in prior rounds. In addition, if the rule is finalized as proposed, DMEPOS suppliers would be subject to more frequent DMEPOS supplier surveys and reaccreditations and stricter oversight by accrediting organizations (“AOs”).
DMEPOS CBP
The Proposed Rule outlines extensive revisions to the DMEPOS CBP bidding rules and pricing methodology used to determine payment amounts for each product category. CMS also proposes to reduce the number of contracts to be awarded. The proposals are intended to address issues CMS states contributed to the largely unsuccessful CBP Round 2021, in which CMS awarded contracts for only two (2) of the sixteen (16) product categories were competed, because payment amounts “did not achieve expected savings” for the Medicare program. According to CMS, the CBP proposals are informed by simulations CMS conducted using bid and contracting information from previous rounds of the DMEPOS CBP, which CMS has not made publicly available.
- Pricing methodology. Through the CBP, the Medicare program establishes a “single payment amount” (“SPA”) – that is, the amount of reimbursement the Medicare program will pay for items in a particular product category. CMS proposes significant reforms to how SPAs are calculated: (1) returning to a median bid methodology (which was used in CBP rounds before Round 2021); or (2) adopting a new 75th percentile bid methodology. CMS believes that either of these approaches would mitigate the risk of outliers skewing pricing, which CMS experienced in Round 2021. But if either alternative is finalized, a supplier may win a contract to supply items at an amount lower than their bid amount.
- Number of contracts. CMS proposes to base contract awards on validated historical claims data and introduces a minimum of two suppliers per competitive bidding area (“CBA”), rather than the current regulatory minimum of five suppliers per CBA. CMS explains that awarding more contracts than necessary reduces competitiveness, especially among large suppliers who may lack incentives to submit lower bids in an oversaturated market. By contrast, in prior rounds, CMS did not have a mechanism to address situations where bidding entities submit capacity estimates that did not accurately reflect their ability to increase their volume of business if awarded a contract. This inflated the total number of contracts awarded and drove up SPAs under the maximum bid pricing methodology.
- New CBP items. CMS also proposes to expand the scope of competitively bid items to include certain urological, ostomy, and tracheostomy supplies. CMS now believes these categories fall squarely within the statutory language of section 1847(a)(2)(A) of the Social Security Act and no longer considers their inclusion ambiguous. CMS also proposes to include continuous glucose monitors (“CGMs”) for the first time in the next CBP round.
- New “remote item delivery” CBP. The Proposed Rule introduces a new category of bidding known as the RID CBP for “items that are generally furnished from remote supplier locations.” Items that would be included in the RID CBP would be based on CMS’ determination that those items are “typically furnished to beneficiaries from remote supplier locations, or locations that are hundreds of miles on average from the beneficiary residence where the items are delivered.” CMS highlights products such as CGMs and back braces as examples of items commonly delivered from remote supplier locations that may be included in a future RID CBP. CMS proposes that the RID CBP could be regional or nationwide in scope. Notably, the RID CBP would also include “non-mail order items” that are picked up in person at a local pharmacy or supplier storefront. This proposal signals a policy departure from the prior national mail order program for diabetes testing strips, which excluded non-mail order items.
- DME payment classification change for Continuous Glucose Monitors and Insulin Infusion Pumps. CMS also proposes to reclassify CGMs and insulin infusion pumps under the statutory DME payment category for “items requiring frequent and substantial servicing,” which are paid on a monthly capped basis. Currently, insulin pumps are classified as a “capped rental” item and paid monthly for 13 months, while CGM receivers are classified as “routinely purchased” equipment and usually paid by Medicare as a one-time lump sum payment for purchase, with separate payment made for CGM supplies every 90 days. If the payment classification change is finalized, Medicare payment would be made on a monthly rental basis and would include payment for any necessary supplies—which, according to CMS, account for over 98 percent of the cost of the CGM over 5 years. According to CMS, the payment classification change is needed to account for rapidly changing technology, ensure timely access to necessary software updates, and to allow flexibility to switch to newer technology equipment and supplies more often than once every 5 years. If finalized, CMS would establish bid limits for CGMs and insulin pumps under the upcoming CBP based on a monthly payment rate that includes all supplies.
DMEPOS Supplier Accreditation Policies
CMS is proposing to overhaul the accreditation process for DMEPOS suppliers to strengthen oversight and ensure more consistent enforcement of quality standards. A key change would shorten the standard accreditation cycle from three years to one year, requiring annual surveys of all suppliers by accrediting organizations (“AOs”), regardless of past performance. CMS believes this will improve ongoing compliance monitoring and reduce the risk of deficiencies going undetected.
The rule would impose detailed new performance and accountability requirements on AOs, including consistent survey practices, uniform surveyor qualifications, clearer definitions and documentation of supplier deficiencies, and standardized corrective action plan (“CAP”) protocols. CMS would also expand its authority to suspend, place on probation, or terminate AOs that fail to enforce compliance. To increase transparency and oversight, AOs would be required to submit monthly data, report immediate jeopardy deficiencies, and notify CMS of any changes in accreditation status. Additional requirements would include resolving supplier complaints, maintaining detailed documentation of deficiencies, reporting potentially fraudulent activity, and providing surveyors as witnesses when necessary.
AOs would also face new conflict-of-interest safeguards, including a ban on consulting for accredited suppliers and mandatory disclosure of ownership changes and financial relationships. CMS proposes a formal AO approval and reapproval process, along with notification requirements following changes in AO ownership and new procedural protections for AOs subject to enforcement actions. New supplier re-accreditation triggers would be tied to majority ownership changes, and CMS clarifies that if a supplier undergoes a majority ownership change within 36 months of initial enrollment or reactivation, the new owner must obtain accreditation before billing privileges may continue under the existing supplier number. Accreditation would no longer transfer automatically in ownership changes, except in limited circumstances.
CMS also proposes structural revisions to the supplier accreditation process itself, including codifying the new one-year accreditation cycle and requiring full surveys in connection with initial accreditations. To strengthen federal oversight, CMS would also conduct equivalency reviews, validation surveys, and direct audits of AO performance and supplier compliance.
Proposed Exemption Process for Prior Authorization of Certain DMEPOS Items
CMS is proposing a narrow clarification to the prior authorization exemption process for certain DMEPOS items. Under the revised rule, only suppliers that are actively billing for an item and not subject to payment suspension or revocation would be eligible for exemption from prior authorization requirements. This change does not alter the structure of the program but aligns the regulation with CMS’s existing practice, ensuring that only currently compliant and operational suppliers can benefit from the exemption.Stakeholders should closely review the proposed changes and consider submitting comments to help shape the final rule. If finalized as proposed, these reforms would significantly alter compliance obligations not only for DMEPOS suppliers, accrediting organizations, and bidders, but also for all other Medicare providers and suppliers.