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June 26, 2014

Medicare's Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program was enacted by Congress as a cost and fraud protection measure.  From its inception, there have been questions about the program's complexity and fairness, and whether it would hinder beneficiary access to necessary DMEPOS items and services.  Background information about the DMEPOS Competitive Bidding program is available at

Over the past several years, the Center for Medicare Advocacy (the Center) has shared testimony and publications on DMEPOS and its implementation.  A review of DMEPOS is available at the following links:

In Connecticut, the Center has received caller complaints indicating that some Competitive Bid Winners may not be fulfilling their contracts, thus compromising beneficiaries' access to DMEPOS products and services.  The Center is concerned that beneficiary access to necessary services may be a nationwide problem.  We would like to hear from you about your experiences obtaining necessary DMEPOS items and services. If you have had difficulties, please contact us at

DMEPOS Competitive Bidding Regulations Provide Guidance to Suppliers

Pursuant to Federal Regulation, the Competitive Bid Winners are required to deliver the DMEPOS items directly to the beneficiaries.  See 42 C.F.R. 414.422(e)(1), 414.422(g), and 424.57(c)(12).[1]

The relevant portion of 42 C.F.R. 414.422 (Terms of Contracts) provides:

(e) Furnishing of items.

Except as otherwise prohibited under section 1877 of the Act, or any other applicable law or regulation:

(1)   A contract supplier must agree to furnish items under its contract to any beneficiary who maintains a permanent residence in, or who visits, the CBA and who requests those items from that contract supplier.

(g) Breach of contract.

(1) Any deviation from contract requirements, including a failure to comply with governmental agency or licensing organization requirements, constitutes a breach of contract.

(2) In the event a contract supplier breaches its contract, CMS may take one or more of the following actions:

(i) Require the contract supplier to submit a corrective action plan;

(ii) Suspend the contract supplier's contract;

(iii) Terminate the contract;

(iv) Preclude the contract supplier from participating in the competitive bidding program;

(v) Revoke the supplier number of the contract supplier; or

(vi) Avail itself of other remedies allowed by law.

42 CFR 424.57(c)(12)(Special payment rules for items furnished by DMEPOS suppliers and issuance of DMEPOS supplier billing privileges) states:

(12) Must be responsible for the delivery of Medicare covered items to beneficiaries and maintain proof of delivery. (The supplier must document that it or another qualified party has at an appropriate time, provided beneficiaries with necessary information and instructions on how to use Medicare-covered items safely and effectively).

DMEPOS Competitive Bidding Concerns: Are the Competitive Bid Winners Living Up To Their Contracts?  

The effectiveness of the competitive bidding process and the capacity of various suppliers to provide and service beneficiaries' DMEPOS are in question. Various potential breaches and issues have come to the Center's attention including:

  • Failure of the contract supplier to deliver walkers to a Skilled Nursing Facility upon the beneficiary's discharge, thereby causing the beneficiary to pay out of pocket from a non-bid winning supplier;
  • Failure of the contract supplier to deliver CPAP machines to beneficiaries, requiring them to pick the item up (many beneficiaries do not drive);
  • Failure of the contract supplier to facilitate repairs of the DMEPOS items, instituting confusing processes for beneficiaries with broken DMEPOS items;
  • Insufficient number of suppliers for specific geographic areas; and
  • Lack of a meaningful process to address access issues to DMEPOS products and services.  

As the DMEPOS Competitive Bidding Program impacts more areas of the country, it is important to remain attentive to access and delivery concerns.  Suppliers are complaining about the bidding process and the capacity of various Competitive Bid Winners to provide and service the DMEPOS items under an artificially low contract bid price awarded.  These concerns seem to be borne out by complaints received by the Center thus far.  It appears that at least some beneficiaries are having difficulty obtaining the DMEPOS products and services they need.

Use the CMS Complaint Process to Report Problems to Medicare

In addition to sharing your access issues with us at, the Centers for Medicare & Medicaid Services (CMS) has a complaint process set up to address concerns about the program.  Advocates are concerned that beneficiaries might be unnecessarily confused or harmed by the program, and wish to ensure that beneficiaries have access to necessary DMEPOS and services.  Complaints can be made directly to the Competitive Acquisition Ombudsman via e-mail at or by regular mail at the following address:

Tangita Adams Daramola
Competitive Acquisition Ombudsman
Center for Medicare and Medicaid Services
7500 Security Boulevard
Baltimore, MD 21244

Expedited complaints can be made through the Competitive Bidding Implementation Contractor (CBIC):  The CBIC help desk number is 877-577-5331.


CMS, encouraged by advocates, must ensure that the DMEPOS Competitive Bidding program is implemented efficiently, effectively, and assures beneficiaries' continued access to necessary DMEPOS and services.  Beneficiary stories about problems are essential to understanding whether the program is working as intended and whether beneficiaries are getting necessary DMEPOS items and services.  

This Alert was prepared by Center for Medicare Advocacy attorney Angela Ciottone.

[1] The Center for Medicare Advocacy is preparing a short memo that provides information about the meaning of "delivery" depending on the DMEPOS item at issue.  The memo will be available on the Center’s website shortly.



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