CMS Awards Round 2 Medicare Contracts to Medical Suppliers

The Centers for Medicare & Medicaid Services (CMS) announced Tuesday it had awarded nearly 800 suppliers with more than 13,000 contracts for Round 2 of the Medicare Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program.

Those suppliers will now provide certain medical equipment and supplies—such as scooters, wheelchairs, and oxygen—to Medicare beneficiaries in 91 communities across the country.

In total, CMS awarded 13,126 Round 2 DMEPOS competitive bidding program contracts to 799 suppliers. Those supplies have 2,988 locations to service Medicare beneficiaries in these competitive bidding areas. The National Mail-order Program contract suppliers have 52 locations to serve the entire country through mail or other home delivery. 


An additional 18 suppliers have accepted contracts to provide mail-order diabetic testing supplies at competitively-bid prices nationwide, says CMS.

“The expansion of the competitive bidding program means more beneficiaries will benefit from fair pricing on included equipment and supplies,” said CMS Acting Administrator Marilyn Tavenner in a statement.  “Each of these contract suppliers has met our stringent standards, so beneficiaries can be assured they will receive their equipment and supplies from accredited, qualified suppliers at significantly lower prices.”

The competitive bidding process has netted about $202 million in savings in its first year of implementation in nine areas, according to CMS, and is expected to save the Medicare Part B Trust Fund an estimated $25.7 billion between 2013 and 2022. 


Small suppliers with gross revenues of $3.5 million or less comprise about 63% of the Round 2 contract suppliers, says CMS. More than 48,000 Round 2 bids from more than 2,600 suppliers were received. 

Round 2  of the program will go into effect July 1, 2013. Based on bids submitted by these suppliers, CMS estimates that beneficiaries and Medicare will see prices an average of 45% lower than Medicare currently pays for the same items included in the Round 2 areas, and 72% lower on mail-order diabetic testing supplies nationwide.

“Medicare contract suppliers signed contracts that included protections to ensure that they will furnish beneficiaries with necessary equipment and quality customer service,”  said Jonathan Blum, deputy CMS administrator and director of CMS’s Center for Medicare. “And, our extensive monitoring in Round One showed that competitive bidding reduced spending without jeopardizing access to medical equipment and supplies.”

Written by Alyssa Gerace