DMEPOS Competitive Bidding Program Bond

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How does the DMEPOS Competitive Bidding Program work?

The DMEPOS Competitive Bidding Program was established by Congress in 2003 when it passed the Medicare Prescription Drug, Improvement, and Modernization Act. DMEPOS stands for durable medical equipment, prosthetics, orthotics, and supplies. This program aims to enhance the effectiveness of the Medicare methodology for setting DMEPOS payment quantities. This reduces beneficiary out-of-pocket costs and saves the Medicare program money. It also ensures beneficiaries have access to quality services and items.

Round 2021 of the program started on January 1, 2021, and ends on December 31, 2023. It includes 130 competitive bidding areas (CBAs). As a bidding or contract supplier, use the Competitive Bidding Implementation Contractor (CBIC) website as your primary source of updated information.

Through this program, suppliers in specific competitive bidding areas compete by submitting bids for select products. Contracts are then offered to the Medicare suppliers that meet relevant financial and quality standards and offer the best prices. Bids are submitted electronically and evaluated based on the following criteria:

  • Supplier’s eligibility
  • Supplier’s financial stability
  • Bid price

Looking for a DMEPOS surety bond? See our guide.

Get Your DMEPOS Competitive Bidding Program Bond:

Quick Takeaways

  • Through the competitive bidding program, suppliers compete by submitting bids for select products.
  • Round 2021 of the program started on January 1, 2021, and ends on December 31, 2023.
  • Before submitting a bid to the program, a supplier must obtain a surety bond for $50,000 for the competitive bidding area.
  • If the bidder fails to comply with the terms of the bond contract and doesn’t accept the contract offer, their surety bond will be forfeited.
  • Your bond will cover all product categories for which you submit bids within a single CBA.

What is a DMEPOS competitive bidding program bond?

Before submitting a bid to the program, a supplier must obtain a surety bond for $50,000 for the competitive bidding area (CBA). If a supplier wishes to submit a bid in multiple locations, they must submit multiple bonds (one per CBA). The bond must be uploaded to the program’s secure online portal before the bid window closes.

The bond ensures that the bidder (supplier) follows through and enters into a contract with Medicare for a specific product if they win the bid.

How DMEPOS Competitive Bidding Bonds Work

These bonds involve three separate parties:

  1. Obligee: The CMS requiring the bond
  2. Principal: The DMEPOS supplier participating in the competitive bidding process
  3. Surety: The company supplying the bond

If the bidder fails to comply with the bond contract terms and doesn’t accept the contract offer, their surety bond will be forfeited. That means the entire bond penalty – $50,000 in this case – goes to the obligee.

This is called bond forfeiture. If the obligee decides that the principal hasn’t met its obligations, the entire bond amount is forfeited. In this case, the supplier doesn’t fulfill its obligations when they don’t accept a contract offer when their bid is equal to or below the median composite bid rate. When this occurs, the surety may pay the entire bond amount to the obligee. Then principal must repay them.

The cost of your bid bond may vary depending on your credit score and financial history. Remember that you need separate $50,000 bonds for each CBA you operate. If you have an excellent credit score, you could pay 1% or less of the bond amount. If your credit score is lower, expect to pay a higher premium.

The bond covers all product categories for which you submit bids within a single CBA. Your bond will remain in full force and effect until it is:

1) collected upon by the CMS (if you face forfeiture) or

2) the liability is returned because you haven’t met forfeiture conditions (e.g., you weren’t offered a contract).

Learn more.

Apply for a DMEPOS Competitive Bidding Program Bond

We can connect you with the right DMEPOS bonds for your location. ZipBonds offers the fastest and most secure option for acquiring license and permit bonds. Our all-digital platform is intuitive and straightforward. Apply online or call us at 888.435.4191 to speak with an agent directly.

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