OIG Reviews DME Competitive Bidding Program

The Centers for Medicare & Medicaid Services (CMS) generally operated within the guidelines and Federal requirements for the competitive bidding Round 1 rebid program for durable medical equipment suppliers, the Department of Health & Human Services’ Office of the Inspector General found in a recent report. 

“We determined that CMS generally selected DMEPOS (durable medical equipment, prosthetics, orthotics and supplies) suppliers and correctly computed the sampled DMEPOS single payment amounts in accordance with its established procedures and applicable Federal requirements,” the OIG said in a report on the Round 1 Rebid Program. 

The OIG conducted an audit of the Round 1 Rebid Program using a combination of inquiry and verification, focusing primarily on CMS’ process for selecting DME suppliers and how it computed pivotal bid amounts and single payment amounts.


The objective was to determine whether CMS selected DME suppliers and computed the single payment amounts in accordance with its established program procedures and Federal requirements. 

For 255 of the 266 DME suppliers who won a contract and were associated with the sampled single payment amounts reviewed, CMS “consistently” followed appropriate procedures and requirements. 

However, for 11 of the winning suppliers, CMS did not consistently follow its established procedures, although the overall effect on Medicare payments to the suppliers was immaterial, the OIG found.


The inconsistency ended up impacting 19 of the 100 sampled single payment amounts, as nine of the winning suppliers didn’t meet financial documentation requirements while CMS incorrectly used the remaining two suppliers in one single payment computation. 

Based on that sample, the OIG estimates that CMS underpaid suppliers by $33,704 compared to what they would have gotten if no errors had occurred—not a material event, considering it’s less than 0.1% of the $113 million paid under the Round 1 Rebid Program. 

CMS should follow its established program procedures in the future in order to consistently evaluate the financial documents of all suppliers and ensure that all bids of winning suppliers are included int eh calculation of single payments mounts before offering contracts, the OIG recommended in the report. 

Access the report

Written by Alyssa Gerace

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