Basics

The Centers for Medicare and Medicaid Services (CMS) operates a competitive bidding program to pay for certain categories of durable medical equipment (DME)  for original Medicare beneficiaries, ranging from mobility devices like wheelchairs, diabetes testing supplies like blood glucose monitors, and other supplies like back and knee braces for patients living in Competitive Bidding Areas (CBAs). When CMS decides a category of equipment should be eligible for competitive bidding for DME, they go through a process of soliciting bids and selecting from eligible proposals to find the lowest-cost supplier that still meets volume and quality requirements. The core rationale behind competitive bidding for DME  is threefold: cost savings, reduced fraud and waste, and improved oversight. Because fewer approved suppliers operate in each contract area, CMS can more easily monitor compliance and quality, control costs, and identify potential issues. In this Basic, we examine the competitive bidding framework, from how CMS solicits bids and awards contracts to the quality and financial standards suppliers must meet.