CMS has announced that it is considering using its “inherent reasonableness” (IR) authority to establish special Medicare payment limits for diabetic testing supplies furnished on a non-mail order basis. Under the statutory IR authority, which was codified in a 2005 final rule, CMS can adjust certain Medicare Part B payment amounts that are “grossly excessive” (generally cases in which an adjustment of 15% or more is justified). CMS has stated that it is examining ways to use pricing information obtained during the Medicare DMEPOS competitive bidding program for mail-order diabetic supplies to adjust payment for retail diabetic supplies without requiring local suppliers to compete for contracts. CMS is planning a July 23, 2012 public meeting in Baltimore to consult with suppliers and the public about this potential policy.