The Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program’s (CBP’s) bid evaluation process is designed to award contracts to bidders to furnish quality items and services to beneficiaries throughout the competitive bidding areas (CBAs) at competitive payment amounts during the contract performance period.
To accomplish this, the Centers for Medicare & Medicaid Services (CMS) determines the number of contracts to award and calculates the Single Payment Amounts (SPAs).
Determining the Number of Contracts to Award in Round 2028
Step 1: Determining the Number of Contracts to Award in Round 2028
Because this is the first time a nationwide remote item delivery CBA is being conducted for the product categories included in Round 2028, CMS will use the following methodology, established at 42 CFR § 414.414(h)(3)(i), to determine the number of contracts to award for each upcoming CBA and product category combination (competition):
- Determine the 2025 total utilization (allowed services) for the lead item (the item in the product category with the highest total nationwide Medicare allowed charges prior to the competition). Total utilization is based on the number of allowed services for the lead item in the competition during the most recent calendar year. When the Healthcare Common Procedure Coding System (HCPCS) Level II code for the lead item is new as of January 1, 2026, total utilization is based on the number of allowed services for claims with dates of service in 2026.
- Count the number of suppliers that furnished at least three percent of total utilization for the lead item. Call this number N.
- Multiply N × 1.25 to get the preliminary number of DMEPOS CBP suppliers (contract suppliers). Round the result to the nearest whole number.
- If the rounded number is less than two, set the number of contract suppliers to two; otherwise, use the rounded number.
Below are the number of contracts to be awarded to suppliers for each product category included in Round 2028 based on this methodology.
| Number of Round 2028 DMEPOS CBP Contracts to Award | |
| Class II Continuous Glucose Monitors and Insulin Pumps | 10 |
| Hydrophilic Urinary Catheters | 10 |
| Off-the-Shelf (OTS) Back Braces | 3 |
| OTS Knee Braces | 4 |
| OTS Upper Extremity Braces | 5 |
| Ostomy Supplies | 6 |
| Urological Supplies | 5 |
While this figure is expected to reflect the number of contracts awarded for the applicable competition, CMS may award additional contracts to account for the number of small suppliers and to ensure beneficiary demand is met.
- Small Supplier Requirement – CMS may offer additional contracts to small suppliers when less than 30 percent of the winning array of suppliers are small suppliers. In this instance, consistent with 42 CFR § 414.414(g), CMS will award additional contracts to small suppliers with the lowest composite bids outside of the winning array until the 30 percent target is met or no additional qualified small suppliers remain for the competition.
- Beneficiary Demand – CMS may, in accordance with 42 CFR § 414.414(i), also award additional contracts to suppliers when CMS determines additional contract suppliers are needed to meet beneficiary demand.
It is important to note that an SPA is not recalculated when a bidder is added to meet the small supplier requirement or beneficiary demand (72 Federal Register 18044 (April 10, 2007)).
Step 2: Validating Supplier Eligibility
In accordance with 42 CFR § 414.412(d)(3) and (g), and 42 CFR § 414.414(b), (c), and (d), CMS will begin the bid evaluation process once the bid window closes. CMS will assess whether each bidder meets the supplier eligibility requirements, the financial sustainability threshold, the bid surety bond requirement, and all applicable quality standards and accreditation requirements.
Calculating the SPA
Step 1: Calculating SPAs
Once the list of suppliers that meet all Step 2: Validating Supplier Eligibility requirements is finalized, CMS orders their composite bids from lowest to highest price. Beginning with the lowest bid, CMS selects bidders in ascending order of composite bids until the total number of contracts determined in Step 1: Determining the Number of Contracts to Award in Round 2028 is reached; these selected bidders constitute the winning array of suppliers.
The SPA is set at the 75th percentile of winning bid amounts for the lead item. For details on how the SPA will be calculated for non-lead items, please see 42 CFR § 414.416(b), as certain competitions and items may have unique methodologies.
Step 2: Updating SPAs During the DMEPOS CBP Contract Performance Period
In accordance with 42 CFR § 414.408(b), CMS updates SPAs for the second and third years of a contract performance period by applying the percent change in the Consumer Price Index For All Urban Consumers (CPI-U) for the 12-month period ending six months prior to the year of the contract performance period in question. This approach reflects an inflation-based adjustment, meaning that bidders no longer need to account for general inflation or price increases when formulating their bids.