CMS has announced the second phase of Medicare competitive bidding for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS). In this second round, competitive bidding will be implemented next year in 70 areas, including the nation’s largest cities. With very limited exception, only suppliers who are successful bidders in these regions and who meet program standards (including accreditation) will be eligible to furnish eight categories of DMEPOS to Medicare beneficiaries. The product categories for the second round are: oxygen supplies and equipment; standard power wheelchairs, and scooters; complex rehabilitative power wheelchairs; enteral nutrients, equipment, and supplies; continuous positive airway pressure devices and respiratory assist devices; hospital beds; negative pressure wound therapy pumps; and walkers (and related accessories and supplies for each category). Successful bidders will be paid based on the median of the winning suppliers’ bids for each of the selected items in the region, rather than the Medicare fee schedule or supplier bid amount. This expanded bidding program builds on the first phase of competitive bidding affecting 10 geographic regions and 10 product categories, which goes into effect July 1, 2008. A Reed Smith bulletin regarding the competitive bidding program is available here.