DMEPOS Competitive Bidding Structures: CMS Confirms Important Flexibility for Round 2028
The Centers for Medicare & Medicaid Services’ (CMS) guidance issued on April 2, 2026, addressing the Round 2028 Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program (Guidance). Under the Medicare DMEPOS Competitive Bidding Program, suppliers compete by submitting bids to furnish certain items in designated competitive bidding areas, with contract awards and payment amounts set through the competitive process rather than the fee schedule.
The Round 2028, Nationwide Remote Item Delivery (RID) model, will include all announced product categories in a nationwide competitive bidding area, including:
- Class II continuous glucose monitors and insulin pumps
- Urological supplies
- Ostomy supplies
- Hydrophilic urinary catheters
- Off-the-shelf back, knee, and upper-extremity braces.
The Guidance gives suppliers two immediate planning points.
(1) First, CMS confirmed that the supplier locations included in a bid may collectively satisfy applicable state and local licensing requirements, so long as at least one included location holds a required license for the relevant state or area.
(2) Second, CMS underscored that bids for both lead and non-lead items must be bona fide and supported, when requested, by a narrative and documentation showing how the bidder considered the costs, overhead, and desired profit associated with furnishing both lead and non-lead items throughout the competitive bidding area.
Federal regulations define a “lead item” as “the item in a product category with multiple items with the highest total nationwide Medicare allowed charges of any item in the product category prior to each competition.” (42 C.F.R. § 414.402).
CMS also indicated in the Guidance that bidder registration and the bid window are targeted for late summer or early fall 2026, contract awards and single payment amounts are targeted for late summer or early fall 2027, and the next round is expected to begin no later than January 1, 2028.
Nationwide Licensure Requirements
CMS Accepts the Sum of Several Locations to Meet Licensure Requirements. As a baseline matter, suppliers participating in the nationwide RID competitive bidding area generally must satisfy applicable state and local licensure requirements for all states and territories where they will furnish bid items.For many suppliers, the most significant development is not the baseline obligation to cover every applicable jurisdiction, but CMS’s confirmation that a bidder may use multiple supplier locations to satisfy that obligation. CMS confirmed that all locations included in a bid must together meet applicable state and local licensing requirements for the areas where beneficiaries will be served; if a state requires a specific license, at least one included location must hold that license, but no more than one location is required to satisfy that requirement. Bidders still must be properly licensed by the close of the bid window and maintain required licenses through bid evaluation and, if awarded, the contract performance period.
That confirmation is particularly helpful for multi-location and commonly owned supplier organizations. It supports a structure in which the bidder maps each included location to the jurisdictions and product categories it will actually serve, rather than treating the primary bid location as the sole licensure entity for the nationwide competitive bidding area. This aligns with prior competitive bidding guidance under which commonly owned or commonly controlled suppliers were required to submit a single bid for the same product category in the same competitive bidding area and include the commonly owned or controlled locations that would furnish bid items. Prior Competitive Bidding Implementation Contractor guidance also warned that commonly owned or controlled supplier organizations submitting separate bids for the same competitive bidding area /product category combination would be disqualified.
Small Supplier Network. CMS also confirmed a potentially important option for small suppliers. If individual small suppliers cannot independently satisfy all state licensure requirements for the nationwide RID competitive bidding area, including requirements such as a physical location in a specific state or area, CMS states that a group of small suppliers may form a network under 42 C.F.R. § 414.418 and be awarded a contract if the network’s member locations collectively meet applicable enrollment requirements, including accreditation and licensing. For smaller suppliers, the Round 2028 guidance may create a meaningful planning opportunity, although the network rules remain technical and should be evaluated carefully before registration and bidding.
Action Item. For many suppliers, the planning exercise should now focus on location selection, licensure mapping, and organizing operations before the bid window opens.
CMS’s April 2 FAQ on non-lead item bid verification should also shape bidding strategy. CMS states that all bids will be screened and evaluated to ensure they are bona fide, both as to the lead item and as to all non-lead items in a product category. When requesting support, CMS has traditionally asked bidding entities to provide a narrative rationale describing the bidder’s ability to furnish lead and non-lead items, supporting documentation showing the ability to obtain the lead item for less than the bid amount, and an explanation of how the lead-item bid amount would affect potential single payment amounts for non-lead items. CMS indicated the types of documentation that can substantiate a bid amount may include manufacturer invoices, receipts (including retail sales receipts), letters of intent from manufacturers or wholesalers, manufacturer price lists, and signed written quotes. CMS expects that narrative and documentation to show that the bidder considered all anticipated costs, including overhead, and desired profit associated with furnishing both lead and non-lead items throughout the competitive bidding area.
Action Item. Suppliers planning to submit bids can start to assemble documentation identifying all anticipated costs of providing items under the bid, if awarded.
Round 2028 planning should begin now.
- Suppliers should review their legal entities, PTANs, common ownership and control disclosures, state licensure footprint, network or subcontracting arrangements, and bona fide bid support before the bid window opens.
- For organizations with multiple affiliated locations, the practical question is no longer simply whether one entity can become licensed everywhere, but whether the bid can be structured so the included locations collectively satisfy the applicable state and local licensure requirements for the nationwide service area. Suppliers considering bid submission should consider their potentially expanded options.
- Suppliers should identify all costs associated with performance under the bid.
- Suppliers should also be mindful that CMS recently imposed a nationwide DMEPOS enrollment moratorium for certain supplier categories, which may further complicate expansion, enrollment, and licensure strategies leading into Round 2028 bidding.
Suppliers with questions about Round 2028 bid structure, licensure coverage, common ownership disclosures, or network and subcontracting options should consult counsel early so that enrollment, licensing, and operational decisions are aligned before bidding begins.
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