CMS dropped a bomb on the DME industry.
On December 2, 2025, the Centers for Medicare & Medicaid Services published the final rule for the next round of the DMEPOS Competitive Bidding Program. The industry response? Over 950,000 public comments—most of them concerned, many outright opposed.
CMS didn't budge.
The next round starts January 1, 2028, whether we're ready or not. And if the reaction tells us anything, most DME providers aren't prepared for what's coming.
I've spent the last two weeks talking to DME owners and operators across the country. The anxiety is real. But here's what I've learned: the providers who survive—and thrive—won't be the ones who resist change. They'll be the ones who adapt faster than their competitors.
This guide breaks down everything you need to know about the 2028 competitive bidding round and, more importantly, what you should be doing right now to prepare.
What's Actually Changing (And Why It Matters)
The Big Picture
The final rule makes several significant changes to how competitive bidding will work:
1. Remote Item Delivery (RID) Goes National
Instead of hundreds of local competitive bidding areas, CMS is creating a nationwide Remote Item Delivery program—or several large regional programs—for specific product categories.
Product categories included:
- Continuous Glucose Monitors (CGMs) - first time in competitive bidding
- Insulin pumps
- Urological supplies
- Ostomy supplies
- Tracheostomy supplies
- Off-the-shelf (OTS) braces (knee, back, upper extremity)
What this means for you: Geographic advantages disappear. You're now competing with suppliers across the entire country—or large multi-state regions—not just your local market.
2. Pricing Methodology Changed
Previously, single payment amounts (SPAs) were calculated using the maximum winning bid. Now they're calculated using the 75th percentile of winning bids.
Translation: Pricing will be more competitive, and margins will likely be tighter. The days of riding on high local pricing are over.
3. Annual Accreditation Required
CMS is moving from a 3-year accreditation cycle to annual re-surveys and renewals.
What this means: More frequent compliance checks, more administrative burden, and zero room for letting standards slip.
The Timeline: Mark Your Calendar
Here's the exact sequence of events between now and 2028:
January 2026 (Now)
- Final rule published
- Pre-bidding supplier awareness program begins
Late Spring/Early Summer 2026
- CMS announces specific registration and bidding dates
- Lead items for each product category announced
- Number of contracts per category revealed
- Bidder education program launches
Late Summer/Early Fall 2026
- Bidder registration opens (get your user IDs and passwords)
- Bid window opens
Late Summer/Early Fall 2027
- Contracts awarded
- Single payment amounts announced
- Beneficiary education begins
January 1, 2028
- Contracts and SPAs go into effect
- Six-month transition period begins for beneficiaries to switch suppliers
You have 3 years. Sounds like a lot of time. It's not.
The Five Things You Must Do in Q1 2025
I'm not going to sugarcoat this: most DME providers are going to wait until late 2026 to start preparing. That's a mistake. The providers who start now will have a massive advantage.
Here's your Q1 2026 action plan:
1. Get Your Accreditation House in Order (Like, Yesterday)
Why this matters: You cannot bid without current accreditation for your product category. Period.
What to do now:
- Verify your accreditation status for every product category you plan to bid on
- Check expiration dates—don't let anything lapse
- If you're not accredited for a category you want to bid on, start that process NOW
- Update your NSC (National Supplier Clearinghouse) records
- Ensure your accrediting organization is CMS-approved
Pro tip: With annual accreditation coming, treat compliance as a continuous process, not a once-every-three-years scramble.
2. Audit Your Licensing (Every Single Location)
Why this matters: CMS requires current, non-expired licenses for all lead and non-lead items in each product category. Missing one license? Your entire bid is invalid.
What to do now:
- Inventory all licenses at every location
- Check expiration dates for the next 3 years
- Identify any gaps (new product categories, new locations)
- Ensure PECOS reflects all current licenses
- Create a renewal tracking system so nothing expires during the bid window
Reality check: Licensing requirements change. Don't assume what worked in previous rounds will work in 2028.
3. Run Financial Stress Tests on 75th Percentile Pricing
Why this matters: SPAs will be lower than previous rounds due to the 75th percentile methodology. Can your operation survive on tighter margins?
What to do now:
- Model your costs at various pricing scenarios (assume 10-20% lower than current reimbursement)
- Identify where you can reduce operational costs without sacrificing quality
- Calculate your break-even point for each product category
- Determine which categories are worth bidding on and which aren't
Hard truth: Some product categories may no longer be profitable at competitive bidding rates. Know this before you waste time bidding.
4. Automate Everything You Can
Why this matters: Competing on price alone is a race to the bottom. The winners will compete on efficiency.
What to do now:
- Audit your current workflows: order intake, eligibility verification, prior authorization, billing
- Calculate hours spent on manual tasks
- Identify automation opportunities
- Evaluate automation platforms (full disclosure: this is what GenHealth does, but the principle applies regardless of vendor)
The math: If you're spending 40+ hours/week on prior authorizations and order processing, that's a full-time salary you could be saving—or redirecting to growth.
Competitive advantage: When pricing is tight, operational efficiency is the only way to maintain margins. The suppliers with the most streamlined operations will underbid competitors and still turn a profit.
5. Build Your National Fulfillment Capability
Why this matters: If you win a national RID contract, you need to be able to serve beneficiaries anywhere in your region—or the entire country.
What to do now:
- Assess your current geographic coverage
- Identify gaps in your fulfillment network
- Explore partnerships with regional suppliers
- Evaluate logistics and shipping capabilities
- Test your systems for remote order fulfillment
Reality: Most DME providers are set up for local service. National contracts require national capabilities. Start building that infrastructure now.
What Happens If You Don't Prepare
Let me be blunt: if you wait to start preparing, you're probably going to lose.
Here's what "losing" looks like:
- Incomplete bids rejected due to licensing or accreditation issues
- Uncompetitive pricing because you don't know your true costs
- Contract wins you can't fulfill because your operations aren't ready
- Margin compression that makes your business unprofitable
The industry is consolidating for a reason. The KabaFusion acquisition for $2.2 billion in August 2025 wasn't a coincidence. Scale matters. Strategy matters. Technology matters.
Small to mid-sized providers can still compete—but only if they're running lean, efficient operations backed by automation.
The Automation Advantage: Why It's Non-Negotiable
I've been in healthcare operations for over a decade. I've seen what happens when providers try to compete on manual processes.
They lose.
Here's why automation is no longer optional:
1. Prior Authorization Manual processing: 45 minutes per auth, 40+ hours/week Automated processing: 5-10 minutes per auth, <5 hours/week
Savings: 35+ hours/week = one full-time employee redirected to growth activities
2. Eligibility Verification Manual: Phone calls, hold times, data entry errors Automated: Real-time verification, integrated with intake
Result: Fewer claim denials, faster patient service
3. Order Intake Manual: Faxes, emails, portal logins, data entry Automated: Single consolidated inbox, automatic routing
Impact: No missed orders, faster fulfillment, happier patients
4. Billing Integration Manual: Re-entering data into Brightree, NikoHealth, etc. Automated: Seamless sync, zero duplicate entry
Outcome: Faster billing, fewer errors, better cash flow
The bottom line: When everyone's bidding on the same pricing methodology, the provider with the lowest operational costs wins.
What We're Doing at GenHealth
Full transparency: GenHealth builds automation for DME providers. That's our business. But even if you never become a customer, the principle holds: automate or fall behind.
We've been preparing our customers for this exact scenario. Our full-service platform handles:
- Order intake from any source (fax, email, EHR, portals)
- Real-time eligibility verification
- Prior authorization submission and tracking
- Billing integration with Brightree and NikoHealth
The results our customers are seeing:
- 94% reduction in prior auth errors
- 45 minutes average time saved per authorization
- 40+ hours/week operational savings
- Same-day turnaround on prior approvals (vs. 10+ days manual)
I'm not sharing this to sell you (though if you want to talk, my inbox is open). I'm sharing this because these are the benchmarks you need to hit—with us or with someone else.
Your Next Steps (This Week)
Don't let this article sit in your "read later" folder. Take action this week:
Monday:
- Check accreditation status for all product categories
- Verify all licenses are current and reflected in PECOS
Tuesday:
- Run financial models on 75th percentile pricing scenarios
- Identify which product categories are profitable at lower reimbursement
Wednesday:
- Audit current workflows and time spent on manual tasks
- Calculate cost of manual operations vs. automation ROI
Thursday:
- Research automation platforms and request demos
- Talk to peers who've already automated
Friday:
- Create a 36-month preparation timeline
- Assign owners to each task
- Schedule monthly check-ins to track progress
The Real Competitive Advantage
Here's what I've learned after hundreds of conversations with DME providers:
The ones who succeed don't resist change. They anticipate it.
CMS published the final rule with over 950,000 comments opposing it. They didn't change course. The message is clear: competitive bidding is happening. Annual accreditation is happening. Tighter margins are happening.
The only question is: will you be ready?
The 2028 competitive bidding round isn't just another regulatory hurdle. It's a fundamental reshaping of the DME industry. National competition. Tighter pricing. Higher compliance standards.
The providers who treat this as business as usual will struggle. The providers who see this as an opportunity to build more efficient, more scalable operations will thrive.
You have 3 years. Use them wisely.
About the Author
Mike Maseda is the Head of Sales & Operations at GenHealth.ai, where he helps DME providers, health plans, and medical groups navigate the complex landscape of healthcare automation. With over a decade in healthcare operations, Mike has seen firsthand how technology can transform administrative burden into competitive advantage.
Want to discuss your competitive bidding strategy? Connect with Mike on LinkedIn or reach out to the GenHealth team.
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