CMS recently released the names of the new contract suppliers under the Round 2 Recompete of the Medicare durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) competitive bidding program and the national mail-order competition for diabetes supplies. The CMS announcement was followed shortly by release of an HHS Office of Inspector General (OIG) report that flags problems with the state licensure status of some contract suppliers currently participating in the competitive bidding program.

As previously reported, the current Round 2 and national mail-order program contract periods expire on June 30, 2016, and new contracts will run from July 1, 2016 through December 31, 2018. CMS has executed 586 contracts for the Round 2 Recompete along with 9 national mail-order recompete contracts. The names of the contract suppliers are posted on the Competitive Bidding Implementation Contractor website.

Although one of the conditions for a supplier being awarded a competitive bidding contract is meeting applicable state licensure requirements, the OIG has determined that incomplete and inaccurate licensure data allowed some suppliers to win Round 2 contracts without holding all required licenses. The report focused on 146 contract suppliers identified in complaints from the supplier community (e.g., trade association and individual suppliers). Out of this pool, almost half – 63 suppliers – had not met state licensure requirements for some of the competitions for which they received a contract, and the licensure status could not be determined for another 14 suppliers. The OIG discussed the complexities of monitoring state licensure requirements, which can involve multiple boards and different in-state and out-of-state supplier requirements. To address these challenges, the OIG called on CMS to work with state licensing boards to ensure that the licensure database is accurate and complete, and to prevent suppliers without all applicable licenses from receiving contracts in future rounds of bidding.