On April 9, 2013, CMS announced the names of 799 suppliers that have been awarded 3-year contracts under Round 2 of the Medicare durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) competitive bidding program, along with the 18 suppliers that accepted contracts under the national mail order competition for diabetic testing supplies. Under competitive bidding, only suppliers that are winning bidders, meet licensing and other standards, and enter into a contract with CMS may furnish selected categories of DMEPOS to Medicare beneficiaries in competitive bidding areas (CBAs), with very limited exceptions. Winning bidders who sign contracts are paid based on the median of the winning suppliers’ bids in the CBA, rather than the DMEPOS fee schedule amount. Contracts under Round 2 and national mail-order contracts begin on July 1, 2013. As previously reported, Medicare reimbursement will be cut by an average of 45% for suppliers participating in Round 2, which covers eight product areas in 100 CBAs. Mail-order diabetic testing supplies contracts cover all 50 States, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, and American Samoa. Medicare reimbursement for diabetic testing supplies will fall 72% compared to current fee schedule amounts (the new prices will be applied in the retail setting as well under separate legislative authority). CMS notes that Round 2 contract suppliers have 2,988 locations to serve Medicare beneficiaries in the CBAs, and about 63% of these suppliers are “small suppliers,” with gross revenues of $3.5 million or less. CMS will now step up educational efforts aimed at suppliers, referral agents, and beneficiaries in preparation for the expansion of competitive bidding this summer.