Competitive Bidding for Durable Medical Equipment: Round 2

Previously I wrote about Medicare’s efforts to introduce competitive bidding for durable medical equipment (DME). Today I provide additional details on the program, an update of the initial competitive bidding implementation (Round 1) and a look ahead at the competitive bidding process in fiscal year (FY) 2013 (Round 2).

In FY 2011 and 2012 (i.e., Round 1), the DME program covered nine metropolitan areas.

In fall 2010, the Centers for Medicare and Medicaid Services (CMS) awarded 1,217 contracts awarded to 356 individual suppliers. Ninety-two percent of suppliers who submitted a bid and were offered a contract accepted the contract terms. Each Round 1 area had multiple winners for each product category due to CMS policy to ensure a choice of suppliers for all beneficiaries living in the area. CMS reports that: “The competitive bidding program has reduced prices significantly for beneficiaries living in these nine areas. The average percentage savings in comparison to the fee schedule was 35 percent.” Overall savings was actually 42 percent as beneficiary utilization of DME also decreased. Total Medicare savings was $202.1 million.

Quality of care, however, has not decreased. “The rate of use of hospital services, emergency room visits, physician visits, and skilled nursing facility care [in competitive bidding areas] has remained consistent with the patterns and trends seen throughout the rest of the country.” For equipment where utilization decreased, CMS called 100 individuals randomly to determine if they had sufficient supplies to meet their medical needs. “The calls revealed that in virtually every case, the beneficiary reported having more than enough supplies on hand, often multiple months’ worth, and therefore did not need to obtain additional supplies when the program began. This would suggest that beneficiaries received excessive replacement supplies before they became medically necessary.”

In 2013, Round 2 will begin and will expand to 91 (listed below). In 2016, the program will be fully phased in throughout the country.

How much money will CMS save? The CMS Office of the Actuary (OACT) estimates that “the program will save the Medicare Part B Trust Fund $25.7 billion and beneficiaries $17.1 billion between 2013 and 2022.” That’s no small change.

Equiment Subject to Competitive Bidding

The items covered by the DME competitive bidding process include:

  • Oxygen, oxygen equipment, and supplies
  • Standard power wheelchairs, scooters, and related accessories
  • Complex rehabilitative power wheelchairs and related accessories (Group 2 only)
  • Mail-order diabetic supplies
  • Enteral nutrients, equipment, and supplies
  • Continuous Positive Airway Pressure (CPAP) devices, Respiratory Assist Devices (RADs), and related supplies and accessories
  • Hospital beds and related accessories
  • Walkers and related accessories
  • Support surfaces (Group 2 mattresses and overlays in Miami-Fort Lauderdale-Pompano Beach only)


DME Competitive Bidding Areas (Round 2)

Here is the full list:

  • Albuquerque, NM
  • Bakersfield, CA
  • Boise City-Nampa, ID
  • Colorado Springs, CO
  • Denver-Aurora, CO
  • Fresno, CA
  • Honolulu, HI
  • Las Vegas-Paradise, NV
  • Los Angeles-Long Beach-Santa Ana, CA
  • Oxnard-Thousand Oaks-Ventura, CA
  • Phoenix-Mesa-Scottsdale, AZ
  • Portland-Vancouver-Beaverton, OR-WA
  • Sacramento–Arden-Arcade–Roseville, CA
  • Salt Lake City, UT
  • San Diego-Carlsbad-San Marcos, CA
  • San Francisco-Oakland-Fremont, CA
  • San Jose-Sunnyvale-Santa Clara, CA
  • Seattle-Tacoma-Bellevue, WA
  • Stockton, CA
  • Tucson, AZ
  • Visalia-Porterville, CA


  • Akron, OH
  • Chicago-Naperville-Joliet, IL-IN-WI
  • Columbus, OH
  • Dayton, OH
  • Detroit-Warren-Livonia, MI
  • Flint, MI
  • Grand Rapids-Wyoming, MI
  • Huntington-Ashland, WV-KY-OH
  • Indianapolis-Carmel, IN
  • Milwaukee-Waukesha-West Allis, WI
  • Minneapolis-St. Paul-Bloomington, MN-WI
  • Omaha-Council Bluffs, NE-IA
  • Springfield, MA
  • St. Louis, MO-IL
  • Toledo, OH
  • Wichita, KS
  • Youngstown-Warren-Boardman, OH-PA


    • Asheville, NC
    • Atlanta-Sandy Springs-Marietta, GA
    • Augusta-Richmond County, GA-SC
    • Austin-Round Rock, TX
    • Baltimore-Towson, MD
    • Baton Rouge, LA
    • Beaumont-Port Arthur, TX
    • Birmingham-Hoover, AL
    • Bradenton-Sarasota-Venice, FL
    • Cape Coral-Fort Myers, FL
    • Charleston-North Charleston, SC
    • Chattanooga, TN-GA
    • Columbia, SC
    • Deltona-Daytona Beach-Ormond Beach, FL
    • El Paso, TX
    • Greensboro-High Point, NC
    • Greenville-Mauldin-Easley, SC
    • Houston-Sugar Land-Baytown, TX
    • Jackson, MS
    • Jacksonville, FL
    • Knoxville, TN
    • Lakeland, FL
    • Little Rock-North Little Rock-Conway, AR

Louisville/Jefferson County, KY-IN

  • McAllen-Edinburg-Mission, TX
  • Memphis, TN-MS-AR
  • Nashville-Davidson–Murfreesboro–Franklin, TN
  • New Orleans-Metairie-Kenner, LA
  • Ocala, FL
  • Oklahoma City, OK
  • Palm Bay-Melbourne-Titusville, FL
  • Raleigh-Cary, NC
  • Richmond, VA
  • San Antonio, TX
  • Tampa-St. Petersburg-Clearwater, FL
  • Tulsa, OK
  • Virginia Beach-Norfolk-Newport News, VA-NC
  • Washington-Arlington-Alexandria, DC-VA-MD-WV


  • Albany-Schenectady-Troy, NY
  • Allentown-Bethlehem-Easton, PA-NJ
  • Boston-Cambridge-Quincy, MA-NH
  • Bridgeport-Stamford-Norwalk, CT
  • Buffalo-Niagara Falls, NY
  • Hartford-West Hartford-East Hartford, CT
  • New Haven-Milford, CT
  • New York-Northern New Jersey-Long Island, NY-NJ-PA
  • Philadelphia-Camden-Wilmington, PA-NJ-DE-MD
  • Poughkeepsie-Newburgh-Middletown, NY
  • Providence-New Bedford-Fall River, RI-MA
  • Rochester, NY
  • Scranton–Wilkes-Barre, PA
  • Springfield, MA
  • Syracuse, NY
  • Worcester, MA


  1. Hello Jason,

    I’d like to share some stories of beneficiaries who have experienced complications because of the competitive bidding program. I’ve personally sat down with these folks to hear how they waited weeks for a simple battery replacement or resorted to Craig’s list to purchase a hosptial bed because they did not have a provider who could service them in their area.

    This program is not running as smoothly as CMS claims. Please check out our website at to see some of the issues we have uncovered.

  2. This is not going well as they claim don’t be fooled and expect “dump and run” service if you get any from oxygen providers! Therapist what are they? It’s most likely that you will NOT have one visit you in your home. One on one visits will be replaced with Apria style service group of twenty or more patients meet at Apria and one therapist instruct patients on CPAP usage and mask fittings!

  3. Hello Jason, Thank your for your valuable information.
    I have tried to find a complete list of individual suppliers recently awarded contracts for Medicare-Competitive bidding for DME – Round 2 -2013, for Northeast/Boston/Cambridge/Quincy/MA/NH. (Inparticular, New Hampshire) Can you direct me to a website for this list, or forward a list to me?
    Thank you.

  4. It appears that the Grand Rapids, MI area only has one provider who is participating in Medicare to provide Oxygen supplies. If you call Care Link, they switch you over to LinCare. Airway did not get the competitive bidding. Apria is listed as a competitive bidding winner, but they do not commit to Medicare pricing. [How can that be?]

    A long time Airway customer I was told a about 3 weeks ago that my “grandfather” period with Airway was over. I was told Lincare would be my provider, going forward. Airway promptly called, wanting to arrange to pick up their stuff. But all this time later, Lincare has yet to deliver everything needed, despite having sent a “CRT” out to evaluate me over a week ago. Their deliveryman did show up today, but had all the wrong supplies: he had a five liter concentrator with a home fill unit on top. I am on five liters of O2 which requires the use of a 10 liter concentrator, which they had already provided. He said the 10 liter concentrator would need a different home fill unit. He had the wrong size home fill tanks and no large “backup” tank at all.

    When I called Lincare after the delivery man left, the woman questioned everything I told her was wrong. She said they had no ten liter homefill machines, implying that I did not have a 10 liter set up from Airway. I was looking right at the Airway set I had used for several years. Her next thought was to schedule someone to come out and “evaluate” me. [Hoping to prove I did not need a 10 liter set up is my guess]. But I told her their CRT had already evaluated me a week ago. Besides, it is common knowledge that someone needing 5 liters of air will have to use a 10 liter machine or else they will not receive the five liters, they’ll only get about 4 liters.

    The man who attempted to deliver today also told me that he had never seen one of the large backup tanks like the Airway tank, used by Lincare. I explained that the Lincare CRT had told me I’d just use the dozen E tanks as backup, but I had pointed out that at 5 liters, an E tank lasts about an hour and 20 minutes. There is no way I am going to change air tanks around the clock. The electricity goes out 3 or 4 times a year here and often is out in the middle of the night until sometime later the next day. I will need a backup tank that will last at 5 liters for up to ten hours. No way is a dozen E tanks going to work for me on that basis.

    I don’t see working with this company given the chain of errors, the false information and attempts to convince me to use the wrong equipment. If, indeed, this is now the only company I can deal with and get Medicare pricing, that is not acceptable.

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