Terms and Definitions
On April 9, 2020, the non-invasive ventilators product category was removed from Round 2021 due to the novel COVID-19 pandemic. On October 27, 2020, the Centers for Medicare & Medicaid Services (CMS) announced the single payment amounts (SPAs) and began offering contracts for the off-the-shelf (OTS) back braces and OTS knee braces product categories. All other product categories were removed from Round 2021. Please see the CMS announcement for additional information.
Adjusted Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Fee Schedule Amount: A fee schedule amount that has been adjusted based on competitive bidding information. See 42 CFR §414.210 for more information regarding the adjustments.
Authorized Official (AO): For Medicare enrollment, the DMEPOS Bidding System (DBidS,) and Connexion purposes, the AO must be an individual identified as an AO on the CMS-855S enrollment application. This individual is an appointed official for the organization (for example, chief executive officer, chief financial officer, general partner, chairman of the board, or five percent or greater direct owner) to whom the organization has granted the legal authority to enroll it in the Medicare program, to make changes or updates to the organization’s enrollment information in the Medicare program, and to commit the organization to fully abide by the statutes, regulations, and program instructions of the Medicare program.
The AO in DBidS may approve or reject the request for BAOs and end users to: 1) access and enter data in DBidS, and 2) access, upload, and complete specific information in Connexion. CMS will only accept bids that are approved and certified by the AO and any registered BAOs on behalf of the organization, and CMS will only allow AOs and registered BAOs to enter into a contract with Medicare to furnish competitively bid lead items and non-lead items in the product category to Medicare beneficiaries.
Authorized Surety: A company that has been issued a Certificate of Authority by the U.S. Department of the Treasury as an acceptable surety on federal bonds.
Backup Authorized Official (BAO): A BAO is an individual identified as an authorized official (AO) on the CMS-855S enrollment application and who can serve as a backup to the AO for certain activities within the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program. During bidding, a BAO can assist the AO with bidding activities and/or serve as the AO should the AO leave the organization or become unavailable during the bid window. Within Connexion, the program’s secure portal, a BAO has the ability to view, upload and approve all bidding and contract information, and upload and approve contract maintenance forms.
Balance Sheet: A financial statement that summarizes a company’s assets, liabilities, and owner’s equity at a specific point in time.
Beneficiary: A person who has health care insurance through the Medicare program.
Bid: An offer to furnish an item or items for a particular price and time period that includes, where appropriate, any services that are directly related to the furnishing of the item or items. The bidder should consider all costs associated with furnishing an item or items.
Bid Limit: In accordance with federal regulations at 42 CFR §414.412(b)(2), the bid submitted for each lead item and product category cannot exceed the bid limit, which is the fee schedule payment amount that would otherwise apply to the lead item without any adjustments based on the payment determined under competitive bidding. The bid limit is, therefore, equal to the unadjusted Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) fee schedule amount for the lead item.
Bid Price/Amount: The amount a bidder offers to furnish a competitively bid lead item to Medicare beneficiaries in a specific competitive bidding area (CBA) as part of the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program. The bid amount must be bona fide for each item (identified by the Healthcare Common Procedural Coding System code) in accordance with 42 CFR §414.414(b)(4). It should be rational, feasible, and supportable, include the cost of furnishing the item throughout the CBA (except for skilled nursing facilities and nursing facilities that elect to participate as specialty suppliers) for the duration of the contract period of performance, and include overhead and profit.
Bid Surety Bond: A bond in which a surety financially guarantees to an obligee (in this context, the Centers for Medicare & Medicaid Services) that the principal (bidding entity) will act in accordance with the terms established by the bond. See 42 CFR §414.412(g) for a description of the bid surety bond requirements.
Bid Window: The period of time during which the bidder can submit bids for consideration in a Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program round. No bids are accepted after the bid window closes.
Bidder Number: System generated number that identifies each unique bidding entity, assigned after the bidder completes the business organization section of Form A in the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Bidding System, DBidS.
Bidding Entity: The entity whose legal business name is identified in the Form A Business Organization Information Section in the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Bidding System, DBidS.
Centers for Medicare & Medicaid Services (CMS) Approved Accrediting Organization: An organization that has been approved by CMS to accredit suppliers of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) items. A listing of approved accrediting organizations can be found by visiting the CMS website.
Common Control: Suppliers are commonly controlled if one or more of a supplier’s owners are also an officer, director, or partner in another supplier.
Common Ownership: Two or more suppliers are commonly owned if one or more of them have an ownership interest totaling at least 5 percent in the other(s). The term "ownership interest" is defined as "the possession of equity in the capital, stock, or profits of another supplier."
Competitive Bidding Area (CBA): An area established by the Secretary for the purposes of the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program. The area is defined by ZIP codes and may be larger than or smaller than the related metropolitan statistical area.
Competitive Bidding Implementation Contractor (CBIC): The Centers for Medicare & Medicaid Services (CMS) contractor responsible for conducting certain functions, including assisting CMS with performing bid evaluations, supporting CMS' education efforts, and monitoring the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program.
Competitive Bidding Program: A program where the Centers for Medicare & Medicaid Services solicits bids from qualifying suppliers, establishes a single payment amount, and awards contracts within a designated competitive bidding area.
Composite Bid: The bid submitted by a supplier for the lead item in the product category.
Contract Supplier: An entity awarded a contract by the Centers for Medicare & Medicaid Services to furnish items under the Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) Competitive Bidding Program.
Connexion: The secure portal for the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program for suppliers to upload bidding documents, view and respond to contract offers, and to complete and submit forms required to update contract information.
Covered Document: A financial, tax, or other document required to be submitted by a bidder as part of an original bid submission under a competitive acquisition program in order to meet the required financial standards.
Covered Document Review Date (CDRD): The date that the required financial documents must be uploaded in Connexion, the program’s secure portal, for the documents to be reviewed and the bidder to be notified of any missing financial documents. The CDRD is the later of the date that is 30 days before the final date for the closing of the bid window or the date that is 30 days after the opening of the bid window. Eligible bidders are provided an opportunity to submit the missing documents.
Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Bidding System, DBidS: The online bid submission system for the DMEPOS Competitive Bidding Program.
Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Fee Schedule: A schedule or list of amounts used in determining the Medicare Part B allowed payment amounts for DMEPOS items and services that are not included in the DMEPOS Competitive Bidding Program or are furnished to beneficiaries who reside or travel to an area not part of a competitive bidding area. The Medicare allowed payment amount is based on the lesser of the supplier’s actual charge or the fee schedule amount. See 42 CFR, Part 414, Subparts C and D for more information regarding the DMEPOS fee schedules.
End User (EU): In the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Bidding System, DBidS, the Centers for Medicare & Medicaid Services grants EUs the ability to enter data on Form A and Form B, but an EU does not have the authority to approve Form A or certify Form B. In Connexion, the program’s secure portal, the EU has limited capabilities, but can upload bidder documents, view and print contract documents, and complete specific contract maintenance forms. An organization can have one or more EUs.
Enterprise Identity Management (EIDM): An identity management system that issues electronic identities and access (e.g., user IDs and passwords) to the Centers for Medicare & Medicaid Services web-based applications, such as the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Bidding System, DBidS, and Connexion, the DMEPOS Competitive Bidding Program's secure portal.
Enterprise Portal: A single point of entry to numerous Centers for Medicare & Medicaid Services' applications, systems, and databases.
Grandfathered Item: All rented items within a product category for which payment was made prior to the implementation of a Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program to a grandfathered supplier that chooses to continue to furnish the items in accordance with 42 CFR §414.408(j) and that fall within the following payment categories for competitive bidding:
- An inexpensive or routinely purchased item described in §414.220.
- An item requiring frequent and substantial servicing, as described in §414.222.
- Oxygen and oxygen equipment described in §414.226.
- Other durable medical equipment (DME) described in §414.229.
Grandfathered Supplier: A non-contract supplier that chooses to continue to furnish grandfathered items to a beneficiary in a competitive bidding area.
Healthcare Common Procedure Coding System (HCPCS): A standardized coding system used to process certain claims, including those for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) items and services, submitted to Medicare, Medicaid, and other health insurance programs by providers, physicians, and other suppliers.
Income Statement (Profit and Loss Statement or Statement of Operations): A financial report on the results of a business’ performance as reflected in the profitability of a business over a certain period. It itemizes the revenues and expenses of past performance that led to the current profit or loss.
Item: A product included in the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program that is identified by a Healthcare Common Procedure Coding System code, which may be specified for competitive bidding, or a combination of codes and/or modifiers and includes the services directly related to the furnishing of that product to the beneficiary. Items that may be included in the DMEPOS Competitive Bidding Program are:
- Durable medical equipment (DME) other than class III devices under the Federal Food, Drug and Cosmetic Act, as defined in 42 CFR §414.202 of this part and group 3 complex rehabilitative wheelchairs and further classified into the following categories:
- Inexpensive or routinely purchased items, as specified in 42 CFR §414.220(a).
- Items requiring frequent and substantial servicing, as specified in 42 CFR §414.222(a).
- Oxygen and oxygen equipment, as specified in 42 CFR §414.226(c)(1).
- Other DME (capped rental items), as specified in 42 CFR §414.229.
- Supplies necessary for the effective use of DME other than inhalation drugs.
- Enteral nutrients, equipment, and supplies.
- Off-the-shelf orthotics, which are orthotics described in Section 1861(s)(9) of the Act that require minimal self-adjustment for appropriate use and do not require expertise in trimming, bending, molding, assembling or customizing to fit a beneficiary.
Lead Item: The item in a product category with multiple items with the highest total nationwide Medicare allowed charges of any item in the product category prior to each competition.
Lead Item Pricing: A Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program methodology that establishes the single payment amounts (SPAs) for competitive bidding items based on the maximum winning bid amount for the lead item in each competitive bidding area and product category combination (competition). Suppliers submit one bid amount for furnishing the lead item Healthcare Common Procedure Coding System (HCPCS) code, while the SPAs for the non-lead item HCPCS codes within the competition are determined by multiplying the lead item SPA by a relative ratio. The ratios are based on the historic differences in the fee schedule amounts for the lead item and non-lead items. The lead item pricing methodology is set forth at 42 CFR §§ 414.414 and 414.416.
Mail-Order Item: Any item shipped or delivered to the beneficiary’s place of residence, regardless of the method of delivery. A non mail-order item is one that a beneficiary or caregiver purchases at a local pharmacy or supplier storefront rather than having the item delivered to the beneficiary’s residence.
Median Composite Bid Rate: The lead item bid amount for all bidding entities included in the calculation of the single payment amounts within the competition.
Medicare Advantage Plan: A type of Medicare health plan offered by a private company that contracts with Medicare to provide beneficiaries with Part A and Part B benefits. Medicare services are covered by the plan and aren’t paid for under Original Medicare. Medicare Advantage plans include Health Maintenance Organizations, Preferred Provider Organizations, Private Fee-for-Service Plans, Special Needs Plans, and Medicare Savings Account Plans.
Metropolitan Statistical Area (MSA): An area designated by the U.S. Office of Management and Budget for the purposes of census data and other urban population calculations. An MSA can include major cities and the suburban areas surrounding them.
Multiple Locations: Two or more locations that are owned by one or more owners (commonly owned or commonly controlled). Each location must be identified by its unique 10-digit Provider Transaction Access Number (PTAN).
National Provider Identifier (NPI): A unique, 10-digit, sequentially assigned national identification number that is mandated by The Health Insurance Portability and Accountability Act of 1996 (HIPAA) to be used by health care providers, health plans, and health care clearinghouses in all administrative and financial HIPAA transactions.
National Supplier Clearinghouse (NSC): The Centers for Medicare & Medicaid Services (CMS) contractor responsible for issuing or revoking Medicare supplier billing privileges for suppliers of durable medical equipment, orthotics, and supplies (DMEPOS) items and services.
Network: A group of between two to 20 small suppliers that form a legal entity to provide competitively bid lead and non-lead items throughout an entire competitive bidding area (CBA). These suppliers must certify they cannot independently furnish all competitively bid lead and non-lead items in the product category to beneficiaries throughout the entire geographic area of the CBA for which the network is submitting a bid. The network collectively submits a bid as a single entity.
Network Member: Any member of a network, including the primary network member.
Non-Lead Item: All Healthcare Common Procedure Coding System codes in a product category that are not identified as the lead item.
Original Medicare: Fee-for-service coverage under which the government pays health care providers directly for a beneficiary’s Part A and/or Part B benefits.
Parent-Subsidiary: Separate entities where one entity has ownership and control of another entity. In general, a parent entity is a company that owns controlling interests in one or more companies. A subsidiary is a company that is controlled by a parent company.
Pivotal Bid: The lowest bid for the lead item in the product category based on bids submitted by suppliers for a product category in a CBA (competition) that includes a sufficient number of suppliers to meet the projected beneficiary demand for the items in that competition.
Pricing, Data Analysis and Coding (PDAC) Contractor: The Centers for Medicare & Medicaid Services (CMS) contractor responsible for providing suppliers and manufacturers with assistance in determining which Healthcare Common Procedure Coding System code should be used to describe durable medical equipment, orthotics, and supplies (DMEPOS) items for the purpose of billing Medicare.
Primary Network Member: The network member that submits a bid on behalf of the network.
Product Category: A grouping of related items that are used to treat a similar medical condition.
Provider Enrollment, Chain, and Ownership System (PECOS): The Internet-based application that can be used in lieu of the Medicare enrollment application (i.e., paper CMS-855S) to enroll, view or change enrollment information, track the enrollment application process, add or change a reassignment of benefits, submit changes to existing enrollment information, reactivate an existing enrollment record, or withdraw from the Medicare Program.
Provider Transaction Access Number (PTAN): A Medicare enrollment numerical identifier assigned to each supplier location.
Request for Bids (RFB) Instructions: A part of the formal process by which the Centers for Medicare & Medicaid Services requests eligible Medicare durable medical equipment, orthotics, and supplies (DMEPOS) suppliers to submit bids for the amount for which they would furnish items and services included in the DMEPOS Competitive Bidding Program, as well as certain required documents that demonstrate the bidder meets applicable financial and eligibility requirements.
Single Location: A supplier with one location that is owned by one or more owners and is represented by a single Provider Transaction Access Number.
Single Payment Amount: Allowed payment for an item furnished under a Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program.
Small Supplier: A supplier that generates gross revenue of $3.5 million or less in annual receipts including Medicare and non-Medicare revenue.
Specialty Supplier: A skilled nursing facility (SNF) or nursing facility (NF) that is awarded a competitive bidding contract to furnish the enteral nutrition product category to its own residents. SNFs and NFs that elect to be specialty suppliers and are awarded a contract may not furnish any competitively bid items other than the enteral nutrition product category to their own residents for purposes of Medicare payment. If a SNF or NF is not selected as a contract supplier, it must use a contract supplier for the competitive bidding area (CBA) to furnish the enteral nutrition and other items in the product category to its residents.
Statement of Cash Flows: Includes cash flows resulting from operating, financing, and investing activities.
Subcontractor: An entity that has an agreement with a contract supplier to supply specific services allowed under the Durable Medical Equipment, Orthotics, and Supplies (DMEPOS) Supplier Standards either to a contract supplier or directly to the beneficiary. Medicare payment is made to the contract supplier for the cost of the service.
Unadjusted Durable Medical Equipment, Orthotics, and Supplies (DMEPOS) Fee Schedule Amount: The updated historic fee schedule amount without any adjustments based on competitive bidding information. See 42 CFR §414.210 for more information regarding the adjustments.