Lead Item Pricing FAQs

No. Once the SPAs are determined for Round 2021, they will not be adjusted for inflation or price increases and will remain in effect from January 1, 2021, through December 31, 2023.

For Round 2021, under the lead item pricing methodology, the single payment amount (SPA) for the lead item Healthcare Common Procedure Coding System (HCPCS) code is the maximum bid amount submitted for that item by suppliers whose bids for the item are in the winning range in that competitive bidding area and product category combination (competition). Therefore, all bidders who are awarded a contract for a competition will be paid at the maximum winning bid amount for the competition. Please see the Lead Item Pricing fact sheet for additional information on the lead item pricing methodology and how the SPAs for non-lead items in the product category will be calculated. 

Starting in 2016, competitive bidding pricing information has been used to adjust fees in areas where the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program has not been implemented. That means the 2015 fee schedule is the last fee schedule that was not adjusted using competitive bidding pricing information and, for some items, was not exposed to price inversions among similarly coded items (i.e., where single payment amounts (SPAs) for DMEPOS items with less features are higher than SPAs for DMEPOS items with more features). This is why the 2015 fee schedule was used to determine the relative ratios for non-lead items in the product category. Please review the Lead Item Pricing fact sheet for more information and an example of how the 2015 fee schedule was used to determine the relative ratios.

The 2019 unadjusted fee schedule was used for establishing bid limits for Round 2021. It is simply the annual unadjusted fee schedule adjusted for inflation (i.e., what the 2015 fee schedule would be today if the Centers for Medicare & Medicaid Services did not apply competitive bidding information to the fee schedule). 

The 2019 unadjusted fee schedule is maintained by the Centers for Medicare & Medicaid Services (CMS) and is not published. However, the 2019 unadjusted fees are used as bid limits for the Round 2021 lead items and can be found on our website.

Yes, the SPAs for the lead item and all non-lead items in the CBA and product category combination (competition) will be the same for all contract suppliers. However, new for Round 2021, all bidders who are awarded a contract for a competition will be paid at the maximum winning bid amount for the competition. Please see the Lead Item Pricing fact sheet for additional information on the lead item pricing methodology and how the SPA for the lead and non-lead items in the product category will be determined.

A supplier’s bid for a lead item represents its bid for furnishing the lead item and all non-lead items in the product category, i.e., each supplier now submits one composite bid for furnishing all of the items in the product category as a whole. Therefore, due to lead item pricing, it is not feasible to use pricing documentation (e.g., invoices) alone to determine if the supplier’s composite bid is bona fide. While the lead item is, generally speaking, the major revenue generator for suppliers, CMS will review pricing documentation for the lead item and other information to substantiate the supplier’s ability to furnish both the lead item and non-lead items in the product category.

For example, in addition to requiring pricing documentation for the lead item, suppliers who are required to substantiate their bid will also be required to submit a narrative rationale that describes their ability to furnish all items in the product category. An acceptable narrative rationale should demonstrate how the supplier considered the impact its bid amount for the lead item would have on the potential single payment amounts for the non-lead items. If a supplier is asked to provide a narrative rationale and documentation to substantiate its bid amount and they do not provide the necessary information, or the information provided does not substantiate its bid amount, that supplier’s bid for the applicable competitive bidding area (CBA) and product category combination(s) will be disqualified.

As a reminder, Round 2021 of the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program will be the first time that bid surety bonds are required. While we will continue to screen and evaluate all bids to ensure they are bona fide, requiring that bidders obtain a bid surety bond for each CBA in which they submit a bid is an additional measure to ensure that bids are bona fide in Round 2021.