The Centers for Medicare & Medicaid Services (CMS) uses a lead item pricing methodology for all product categories in Round 2028 of the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program (CBP). Under this methodology, each bidder must submit a bid for the lead item in the applicable product category.
To assist the bidder in its submission, CMS provides a Lead Item Pricing Calculator. This calculator identifies the lead item and non-lead item Healthcare Common Procedure Coding System (HCPCS) Level II codes for each product category, along with a long description for each HCPCS code. It also provides the relative ratio for each non-lead item HCPCS code and calculates the single payment amount (SPA) for each non-lead item HCPCS code as if the bid for your lead item HCPCS code ultimately becomes the SPA in Round 2028 (represents the 75th percentile of winning bid amounts for the lead item).
To submit a bid, the bidder will only be required to submit a bid amount for the lead item in a product category. Because a supplier awarded a DMEPOS CBP Contract is responsible for furnishing all items in the product category for which they are submitting a bid, each supplier’s bid for the lead item is a “composite” bid for furnishing all items in the product category.
The bid amounts submitted by bidders are used to establish the SPAs for competitively bid items. This pricing methodology is set forth under 42 CFR § 414.414 and 414.416.
Lead Item Bidding
As a bidder, you are required to submit a composite bid that represents your bid for furnishing the lead item and all other items in the product category. You submit this composite bid amount for the lead item only. As explained in more detail below, to set the SPA for the HCPCS code for each non-lead item included in the product category, CMS multiplies the composite bid amount submitted under the lead item by the applicable ratio for each non-lead HCPCS code based on rules established in 42 CFR § 414.416(b).
As a result, you should consider the costs of furnishing all of the items described by the HCPCS codes included in the product category when submitting your bid for the lead item, because the bid for the lead item is used to calculate the SPAs for all items in the product category.
Bid Limits
In accordance with regulations at 42 CFR § 414.412(b)(11), the bid amounts for lead items L0651 and L1852 must be at or below the average of the 2026 adjusted fee schedule amounts for all nonrural areas. In accordance with regulations at 42 CFR § 414.412(b)(12), the bid amounts for all other lead items in Round 2028 of the DMEPOS CBP must be at or below the average of the 2026 unadjusted fee schedule amounts for all states/territories. The unadjusted fee schedule amount is the updated fee schedule amount without any reductions based on competitive bidding information. The bid limits are listed in the table below.
| Product Category | Lead Item | Bid Limit | |
|---|---|---|---|
| 1 | Class II Continuous Glucose Monitors (CGMs) and Insulin Pumps | A4239 | $273.28 |
| 2 | Hydrophilic Urinary Catheters | A4296 | $8.86 |
| 3 | Ostomy Supplies | A4385 | $7.28 |
| 4 | Off-the-Shelf (OTS) Back Braces | L0651 | $855.26 |
| 5 | OTS Knee Braces | L1852 | $691.80 |
| 6 | OTS Upper Extremity Braces | L3916 | $591.58 |
| 7 | Urological Supplies | A4352 | $8.86 |
Example - Class II Continuous Glucose Monitors (CGMs) and Insulin Pumps
The product category for class II CGMs and insulin pumps includes four items described by four HCPCS Level II codes:
- HCPCS code A4239 – the monthly supplies for a class II CGM owned by the beneficiary at the start of Round 2028
- HCPCS code E2103 – the monthly rental of a class II CGM and all related supplies
- HCPCS code E0784 – the monthly rental of insulin infusion pumps other than those used in conjunction with a class III CGM and all related supplies and accessories
- HCPCS code A4227 – the monthly supplies and accessories for an insulin pump owned by the beneficiary at the start of Round 2028 that is not used in conjunction with a class III CGM [NOTE: HCPCS code A4227 will not be effective until the start of Round 2028]
Each bid amount entered by a supplier for the lead item (HCPCS code A4239) must be at or below the bid limit of $273.28. The bid amount for HCPCS code A4239 reflects the supplier’s cost for furnishing lead item HCPCS code A4239 as well as the non-lead items (HCPCS codes E2103, E0784, and A4227) in the product category.
The SPA for the lead item HCPCS code is the 75th percentile of bid amounts submitted for that item by suppliers whose bids for the item are in the winning range in that competitive bidding area and product category combination (42 CFR § 414.416(b)(1)).
The SPA for lead item HCPCS code A4239 in this example will be based on the 75th percentile of bid amounts for suppliers in the winning range (the 10 lowest bona fide bid amounts from bidding suppliers). In this example, we will assume that $191.30 is the 75th percentile of bid amounts for lead item HCPCS code A4239. The SPA for lead item HCPCS code A4239 is therefore $191.30 in this example and reflects a 30 percent decrease from $273.28.
The SPAs for non-lead items are determined by multiplying the lead item SPA by a relative ratio. The ratios are based on the differences in the 2015 fee schedule amounts for the lead item and non-lead items. The 2015 fee schedule amounts are used because adjustments to the DMEPOS fee schedule amounts based on pricing information from the DMEPOS CBP began in 2016. In accordance with 42 CFR § 414.416(b)(3), this ratio for each non-lead item in a remote item delivery (RID) CBP product category is calculated by dividing the average of the 2015 fee schedule amounts in all areas for the non-lead item by the average of the 2105 fee schedule amounts in all areas for the lead item.
In this example, the 2015 average fee schedule amount of $216.63 for non-lead item HCPCS code E2103 is 101.7807 percent of the average 2015 bid limit of $212.84 for lead item HCPCS code A4239. The SPA for non-lead item HCPCS code E2103 of $194.71 is established by multiplying the SPA for lead item HCPCS code A4239 of $191.30 by 1.017807. As a result, the percentage decrease in payment for the lead item of 30 percent is applied to all the non-lead items in the product category:
| Item | Average 2015 Fee | Relative Difference | SPA | Average 2026 Fee | Percentage Reduction |
|---|---|---|---|---|---|
| E2103¹ | $216.63 | 1.017807 | $194.71 | $278.14 | 30% |
| A4239 | $212.84 | 1 | $191.30 | $273.28 | 30% |
| E0784¹ | $208.33 | 0.978810 | $187.25 | $267.50 | 30% |
| A4227 | $126.92 | 0.596316 | $114.08 | $162.95 | 30% |
¹ Fees include monthly rental of equipment and all monthly supplies and accessories.
Note: Payment for items in the product category for class II CGMs and insulin pumps can be made in either monthly or 90-day installments (three units of each HCPCS code). If a beneficiary runs out of supplies before the end of the paid dates of service for a given installment (i.e., the end of the month or 90-day period), you must ship additional supplies to the beneficiary.