CMS has released the final DMEPOS Competitive Bidding Rule for the next round of bidding.
The final rule keeps much of what CMS proposed earlier in 2025, but includes several significant clarifications and additions that will impact DMEs.
DME providers will need to plan around these changes quickly, especially with annual accreditation, new pricing formulas, and a nationwide remote delivery program now confirmed.
What Did CMS Propose Earlier in 2025?
The proposed rule published in July 2025 included several major reforms.
CMS planned to:
- Relaunch competitive bidding for CY 2028
- Replace the maximum winning bid with a 75th percentile pricing methodology
- Expand CBP into a new Remote Item Delivery (RID) program
- Restructure payment for CGMs and insulin pumps into bundled monthly rentals
- Reduce contract awards to the minimum number necessary
- Shift accreditation to an annual cycle
- Simplify financial documentation required for bidding
- Implement a prior authorization exemption for suppliers with 90 percent approval rates
- Strengthen enrollment screening and revocation authority
The proposed rule generated more than 950,000 comments.
CMS has now responded with a final rule that is similar, but more detailed and structured.
What Changed in the Final Rule?
Several areas were adjusted, clarified, or expanded in the final rule.
1. CMS Revised the Contract-Supplier Formula
The proposed rule was specific. CMS outlined formulas for determining contract counts across product categories.
In the proposed rule, CMS planned to:
- For categories that were previously competed: Double the number of suppliers that furnished at least 5 percent of total utilization.
- For new categories: Award contracts equal to 125 percent of suppliers that furnished at least 3 percent of total utilization.
- Set a minimum of 2 suppliers per competition, down from the previous minimum of 5.
In the final rule, CMS shifted to one unified formula:
- Award contracts equal to 125 percent of the suppliers that furnished at least 3 percent of national utilization for the lead item.
CMS also finalized a target of at least 30 percent small suppliers, with the option to award additional contracts if needed.
This replaces the split structure in the proposed rule and creates one consistent approach across all categories.
2. CMS Added Inflation Updates and Payment Caps to the 75th Percentile Pricing
Proposed rule: SPAs would replace maximum winning bid methodology, move to the 75th percentile of winning bids and receive annual updates. Final rule: CMS added two critical constraints.
The SPA:
- Will be updated by CPI-U in years 2 and 3
- Cannot exceed 110 percent of the adjusted fee schedule
- Cannot exceed the unadjusted fee schedule
This prevents SPAs from drifting upward in a way that undermines Medicare savings. It also confirms to suppliers that bid prices will remain tightly controlled.
3. Remote Item Delivery (RID) CBP Framework Finalized
The proposed rule introduced RID and presented two clear choices:
- A single nationwide RID competitive bidding program, or
- Several large regional RID programs covering defined geographic areas
CMS chose the nationwide option.
This is a major expansion.
Under the nationwide RID CBP in the final rule, contract suppliers must be able to furnish these items to beneficiaries across all states, territories, and the District of Columbia.
RID includes:
- Class II continuous glucose monitors (CGMs) and insulin pumps
- Urological supplies
- Ostomy supplies
- Hydrophilic urinary catheters
- Off the shelf (OTS) back braces
- OTS knee braces
- OTS upper extremity braces
4. Six-Month Transition Period Added for Medical Necessity Documentation
Suppliers switching beneficiaries from non-contract to contract suppliers now get six months to transfer or re-obtain medical necessity documentation.
The proposed rule lacked this safeguard.
This transition period matters for continuity of care and patient safety.
5. Advance Billing Allowed for CGMs and Pumps
The proposed rule moved CGMs and pumps to bundled monthly rentals. The final rule allows suppliers to bill up to 3 months in advance when clinically appropriate.
This is a cash flow improvement compared with the proposed structure and reflects industry comments that monthly billing for high-volume categories would strain operations.
6. New Transparency Requirements Added
The final rule introduces two transparency measures that were not in the proposed rule.
CMS will now display each contract supplier’s product country of origin in the Medicare Supplier Directory, giving beneficiaries and referral partners clearer visibility into sourcing.
CMS is also consolidating all competitive bidding functions into a single Connexion portal. This replaces the dual-system process suppliers used in past rounds.
7. Final Clarifications on Bid Limits
The final rule adds an explicit cap preventing bid amounts from exceeding the unadjusted fee schedule.
Under the finalized methodology, Single Payment Amounts are capped at the lesser of:
- The unadjusted fee schedule amount for the item
- 110 percent of the adjusted fee schedule amount
8. Accreditation Requirements Finalized Without a Phase-In Period
CMS is moving ahead with annual accreditation. The proposed rule left open the potential for a phased approach.
The final rule does not.
This will create a major operational burden for small and mid-size DMEs.
9. Prior Authorization Exemption Retained
The final rule retains the proposed prior authorization exemption for suppliers with at least a 90 percent affirmation rate. This creates a strong incentive for cleaner documentation and more consistent claim quality.
Summary of What Changed:
In short, the final rule is more structured and more prescriptive. CMS kept almost every core component of the proposed rule but added:
- A unified contract count formula
- A 30 percent small-supplier target
- Clearer and tighter SPA caps
- A RID program structure that is nationwide
- A six-month documentation transition period
- Advance billing for rental items
- New system and country-of-origin requirements
- Direct clarity on bid limits
- Full rollout of annual accreditation
- Retained prior authorization exemption
For suppliers, this means the rule is more predictable, but it is also more demanding. The impact of the final rule as it plays out will be very significant, and felt across the industry.
DMEs are dealing with a maelstrom of market forces right now, and this just adds more that they will need to deal with to provide essential medical support to millions of patients.
