Pivotal Bid Summary

Public Posting of Bid Results for Round 2021 of the Durable Medical Equipment,
Prosthetics, Orthotics, and Supplies Competitive Bidding Program

The Centers for Medicare & Medicaid Services (CMS) has received requests to share additional information regarding Round 2021 of the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program (CBP). CMS is providing stakeholders with additional information regarding the pivotal bid results of Round 2021. CMS anticipates that this information will be helpful for stakeholders and other interested parties in their ongoing engagement with CMS.

CMS will continue to evaluate the results of Round 2021 and will go through notice and comment rulemaking when proposing changes that will further improve the DMEPOS CBP so it will continue to help Medicare set market based prices, save money for beneficiaries and taxpayers, and limit fraud and abuse in the Medicare program while ensuring access to quality items. CMS anticipates continuing to share its analysis with stakeholders and interested parties.

Background

CMS competed 16 product categories in 130 competitive bid areas (CBAs) in Round 2021 of the DMEPOS CBP, although the product category for non-invasive ventilators was removed in April 2020 following the exercise of the Defense Production Act due to the coronavirus disease 2019 (COVID-19) public health emergency. Of the remaining 15 product categories that were competed in Round 2021, 13 of the product categories were included in previous rounds of the CBP, while off-the-shelf (OTS) back and knee braces were competed for the first time in Round 2021. Within the 130 CBAs, there were over 2,000 competitions (CBA and product category combinations) and CMS received and reviewed over 49,000 bids.

On January 1, 2021, contracts went into effect in 127 CBAs for the OTS Back Braces and OTS Knee Braces product categories, as Medicare expects to save $600 million in benefit savings over the three year Round 2021 contract performance period.

Based on extensive feedback from stakeholders, Round 2021 incorporated new features and information compared to prior rounds of the DMEPOS CBP: (1) a maximum winning bid methodology instead of a median of winning bids methodology; (2) a lead item pricing methodology; and (3) two new product categories (OTS Back and Knee Braces). These changes reflected market-oriented reforms to the DMEPOS CBP and simplified the bidding process.  For example, these changes reduced the burden on suppliers by requiring suppliers to submit only one bid per product category. In rulemaking, CMS estimated these changes to “cost $10 million in Medicare benefit payments for the 5-year period beginning January 1, 2019, and ending September 30, 2023.”

In addition, CMS increased transparency into the DMEPOS CBP by issuing detailed information on how CMS determines projected beneficiary demand and evaluates bidder capacity for each competition, and how it evaluates the financial health of each bidder. As part of submitting a bid, bidders were required to provide the number of lead item units they estimated they are capable of furnishing in the CBA over one calendar year. This detailed capacity/demand and financial health information were unchanged from prior rounds of the DMEPOS CBP.