The Department of Health and Human Services (HHS) has signaled the long-anticipated return of the Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) Competitive Bidding Program (CBP) in its FY 2026 budget request, and this time, the program is getting a major overhaul.
Competitive bidding is CMS’s process for setting Medicare reimbursement rates for DME by having suppliers submit bids to provide equipment and services at the most competitive prices. While the program is designed to drive savings and reduce fraud, it has historically put financial strain on HME providers and disrupted access in some markets.
After several years on pause, CMS is rebuilding the program with updated infrastructure, increased funding and stricter oversight. According to budget documents released May 30, CMS is preparing for a modernized CBP that prioritizes sustainable pricing, data-driven oversight and beneficiary access to quality care.
Key updates to the revamped Competitive Bidding Program include:
- $22 million in FY 2026 funding to support CBP relaunch as a strategic cost-saving initiative.
- Migration of IT systems to the CMS Cloud to improve data security, transparency and operational efficiency.
- Formal rulemaking process with a public comment period before implementation, giving providers a chance to weigh in.
- Enhanced bidder requirements, including validation of licensure, accreditation and surety bonds.
- Stronger documentation review protocols, with disqualification for incomplete or non-compliant submissions.
- Renewed focus on sustainability and access, with CMS aiming to protect patients while curbing fraud and abuse.
Key Milestones
- Proposed Rule Publication (Expected by July 1): A draft rule is under review and will soon be published for public comment. Providers will have a limited window to respond—timing will be critical.
- Public Comment Period: Industry stakeholders, including HME providers, should prepare to submit feedback on pricing methodology, qualification criteria and access safeguards.
- System Migration and Readiness: CMS will complete the shift to its new cloud-based bidding platform, with providers expected to register and onboard once systems go live.
- Bid Solicitation & Evaluation: Once the rule is finalized, CMS will open the bid window, evaluate provider submissions and enforce new compliance checkpoints, including surety bonds and licensure validation.
- Contract Awards & Implementation: Contracts will be awarded following evaluation, with anticipated implementation in 2026, depending on rule finalization and system readiness.
What This Means for HME Providers
The return of competitive bidding is more than a regulatory update; it’s a strategic inflection point for HME providers. While CMS frames the new program as a way to reduce costs and protect access, providers should be prepared for significant operational and financial impacts:
1. Increased Financial Pressure
Competitive bidding has historically driven down reimbursement rates. If price benchmarks don’t reflect rising costs, providers could face tighter margins and operational strain. This could limit growth potential, investments in innovation or the ability to continue serving certain patient populations profitably.
2. Compliance Will Be Critical
CMS is emphasizing licensure, accreditation and bid documentation as core to the new process. Providers must ensure that:
- All required documentation is accurate and up to date.
- Bid bonds are submitted on time and meet CMS standards.
- Compliance workflows can support real-time information requests and audits.
A misstep here could lead to disqualification from the bidding process or issues with claims payment downstream.
3. Administrative Burden Will Increase
CMS plans to modernize the CBP’s IT systems and manage bidder inquiries via new digital channels. Providers must be ready to:
- Navigate the cloud-based bidding platform efficiently.
- Register staff, secure logins and manage submissions proactively.
- Dedicate internal resources to manage the process without slowing down existing revenue cycle functions.
4. Market Disruption Is Likely
Even with reengineering, the risk of low-ball bids or CMS canceling award results still looms. If improperly vetted suppliers win contracts and later underdeliver, it could lead to:
- Unstable regional pricing.
- Gaps in patient access to critical supplies.
- Confusion for referring providers and case managers.
The industry is urging CMS to enforce tighter bidder qualifications and transparency, but outcomes remain uncertain.
5. Long-Term Strategy Is Now a Short-Term Priority
This isn’t just a short-term policy shift; it’s a strategic landscape change. Providers need to:
- Reassess cost structures and revenue assumptions.
- Model the impact of different bidding scenarios.
- Invest in technology and partnerships that build resilience and adaptability.
Prochant: Your Technology-Powered Partner in a New Bidding Era
While CMS has signaled that formal discussions for the next round of DMEPOS Competitive Bidding could begin in the next couple of years, providers know the ripple effects of this program can be felt long before, and long after, contracts are awarded. Whether your business is preparing for growth after winning a bid or facing revenue challenges from losing one, Prochant is your strategic partner in navigating what comes next.
We don’t manage the bid itself, but we ensure your systems, pricing and revenue cycle operations are ready for the outcomes.
Here’s how our people and platform support you during and beyond the bid cycle:
- Price Table & System Readiness: We support updates to billing systems and charge masters to reflect new bid rates, so you stay compliant and avoid claim rejections.
- Platform Review & Revenue Diversification: We can assess your current billing platform and identify product opportunities outside of the competitive bid scope to help mitigate revenue loss if a contract isn’t secured.
- Scalable Staffing Plans: Reimbursement changes will impact workload. We help you scale your teams up or down to meet volume and resource shifts.
- Real-Time Visibility with Prochant Pulse: Our proprietary analytics engine delivers insights into A/R performance, denial trends and revenue shifts, so you can monitor financial health and plan ahead.
- Process Automation for Stability: With automation and AI, we streamline repetitive tasks, helping you remain efficient and compliant even during transitions.
- Ongoing Regulatory & Documentation Support: From licensure requirements to documentation management, we help ensure you’re aligned with CMS guidelines – before, during and after the bid process.
The bid window may not open for a while, but now is the time to prepare. We’ll continue sharing updates and recommendations as new information becomes available.
As the competitive bidding landscape evolves, preparation is key. Prochant is here to help you navigate the changes with confidence. Connect with our team to explore how our technology-enabled experts can fortify your operations and position your business for long-term success.
Frequently Asked Questions
1. What is the DMEPOS Competitive Bidding Program and why is it returning?
The DMEPOS Competitive Bidding Program is a Medicare initiative where Durable Medical Equipment suppliers submit bids to provide equipment at competitive rates. CMS is relaunching the program in FY 2026 with modernized infrastructure and enhanced oversight to promote cost savings, sustainability, and improved beneficiary access.
2. How will the new competitive bidding rules affect HME providers?
HME providers may face tighter margins due to lower reimbursement rates, higher compliance expectations, and increased administrative burden. Providers must prepare for stricter bidder qualifications, updated IT systems, and potential market disruption in select regions.
3. What are the new compliance requirements for bidding in 2026?
Providers will need to validate licensure, accreditation, and surety bonds, while also meeting stricter documentation and submission protocols. CMS has emphasized a zero-tolerance approach to incomplete or non-compliant bids, making real-time compliance readiness essential.
4. What should HME providers do now to prepare for competitive bidding?
Start by updating billing systems, reviewing documentation workflows, and modeling different bid scenarios. Partnering with an RCM expert like Prochant can ensure pricing tables, staffing plans, and revenue strategies are aligned with upcoming changes.
5. How can Prochant support HME providers during the competitive bidding process?
Prochant offers system readiness, platform reviews, scalable staffing support, real-time revenue analytics via Prochant Pulse, and documentation assistance to help HME providers stay compliant and financially stable before, during, and after the bid cycle.
