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DMEPOS Competitive Bidding Program

The DMEPOS Competitive Bidding Program was mandated by Congress through the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA). The statute requires that Medicare replace the current fee schedule payment methodology for selected Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) items with a competitive bid process. The intent is to improve the effectiveness of the Medicare methodology for setting DMEPOS payment amounts, which will reduce beneficiary out-of-pocket expenses and save the Medicare program money while ensuring beneficiary access to quality items and services.

Under the program, a competition among suppliers who operate in a particular competitive bidding area is conducted. Suppliers are required to submit a bid for selected products. Not all products or items are subject to competitive bidding. Bids are submitted electronically through a web-based application process and required documents are mailed. Bids are evaluated based on the supplier's eligibility, its financial stability and the bid price. Contracts are awarded to the Medicare suppliers who offer the best price and meet applicable quality and financial standards. Contract suppliers must agree to accept assignment on all claims for bid items and will be paid the bid price amount. The amount is derived from the median of all winning bids for an item.


Topic Details
Gap Period
  • Contracts expired on December 31, 2018 and temporary gap period is expected to last until around December 31, 2020
  • Previously contracted suppliers must continue to furnish rental items initiated prior to January 1, 2019
    • Capped rental items through the 13th month
    • Oxygen through the 36th month
    • Exception - travel or permanent relocation of beneficiary outside normal service area
  • Any enrolled supplier may furnish items (update product/service list with NSC)
  • Non-participating suppliers may bill claims as assigned or non-assigned in former competitive bid areas
Fee Schedules During Gap Period
  • Public Use Files (PUF) for bid and non-bid areas, adjusted fee schedule amounts based on SPA and new PUF containing zip codes. See DMEPOS Fee Schedule
  • Payment will be based on lower of supplier's charge or fee schedule amount
KU Modifier January 1, 2020 The use of the KU modifier will start with claims submitted on July 6, 2020 and be effective for dates of service from January 1, 2020 through June 30, 2021 for certain wheelchair accessories and seat back cushions used with complex rehabilitative manual wheelchairs and certain manual chairs. The full list of accessories impacted start on page 9 of the CMS Change Request 11635 and apply to wheelchair codes K0005, E1161, E1231-E1238 and K0008.
  • KE - Used to identify an accessory code that can be dually billed with either a competitive bid or non-competitive bid base item not subject to fee schedule reduction. Only for rural and non-contiguous states. Not appropriate for former competitive bid areas or non-rural locations.
  • KY - Used to identify a formerly competitively bid wheelchair accessory code used with a base unit that was not bid for a beneficiary who resides in a former competitive bid area.
  • KG - Used to identify supplies/accessories utilized across multiple former competitive bidding product categories or when same code can be used for both formerly competitively bid and non-competitively bid items.
  • KU - Only for wheelchair accessories and seat back cushions used with Group 3 Complex Rehab Wheelchair bases.
  • KL - Any DMEPOS item delivered by mail. This includes shipping services and supplier delivery services.
Capped Rental Period
  • New capped rental periods will not start during gap period as original supplier is required to continue to provide equipment




Last Updated Mon, 08 Jun 2020 19:36:30 +0000

The below are topic specific articles which have been published to "Latest Updates" and sent out in Noridian emails within the past two years. Exclusions to this include time sensitive related announcements such as: Noridian and CMS educational events, Ask-the-Contractor Teleconferences and claims processing downtime.

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