2025 CMS Proposed Rule Challenges and To-Dos

Published in Government Relations on August 12, 2025

The 2025 CMS Proposed Rule for Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) introduces several significant changes that present both operational and financial challenges for DME companies.  

The summary below provides VGM’s current position on some of the challenges identified in the proposed rule and guidance for you to consider as you draft your comments to educate CMS on the impact of each proposal on your business and patients. Keep in mind that this draft will continue to be updated as we continue to gather input from the industry.  

Note that one of the most critical things you can do is to submit comments before the August 29 due date. Instructions for submitting your public comments are included at the end of this document. 

Proposed Rule Challenges 

Return of Competitive Bidding 

Remote Item Delivery (RID)  

• Proposal: Create a Remote Item Delivery Competitive Bidding Program (RID CBP) for high-volume items typically shipped to patients, including but not limited to: 
  • Continuous glucose monitors (CGMs). 
  • Insulin pumps. 
  • Urological and ostomy supplies. 
  • Off-the-shelf upper extremity orthoses. 
• Challenges: 
  • Nationwide or regional bidding will disadvantage smaller or regional suppliers. 
  • Pricing pressure is likely to reduce margins. 
  • Urological and ostomy supplies are vital time sensitive supplies and shipping/delivery delays would be harmful to patients. 
• VGM Recommendation:  
  • Define regional and suggest a pilot program within a CBA. 
  • Clarify flexibilities exist for patients to obtain supplies from any supplier if the patient needs them in emergency situations. 
  • Recommend excluding ostomy from program due to high sensitivity of product. 
  • Clarify if supplier has to have a physical presence for a patient to pick up a product. 
• Optional Member Guidance:  
  • Share anecdotal stories from patients on issues with delays or difficulties receiving products and services through delivery. 
  • Share complexity to your company and patients for products and services requiring setup, measurement, fitting, etc. 

Expansion of Product Categories 

• Proposal: Add new categories to the CBP by changing the definition from medical supply to medical equipment. Categories include: 
  • Urological, ostomy, and tracheostomy supplies. 
  • Continuous glucose monitors (CGMs)
  • Off-the-shelf upper extremity orthoses.  
• Challenges: 
  • Listed medical supplies are currently excluded by law. 
  • These additions may conflict with statutory limitations, creating legal and compliance uncertainty. 
  • Added costs to suppliers due to the potential need to invest in new inventory and training to remain competitive. 
• VGM Recommendation: 
  • Oppose inclusion of all respiratory products. However, if included, expressly exclude liquid oxygen. 
  • Opposed inclusion of CGM 
  • Oppose inclusion of medical supplies as CMS does not have legal authority to recategorize products or include medical supplies that are expressly excluded in the CFR. 
  • Oppose inclusion of off-the-shelf upper extremity orthoses. 
• Optional Member Guidance:  
  • Describe how the inclusion of medical supplies would impact servicing your patients. 
  • Provide anecdotal examples about patients that have had to switch products. 
  • Explain how you ensure patients have access to their prescribed and preferred products. 
  • Highlight any challenges you anticipate in adapting to the payment changes.  
    • Describe how the payment changes may affect your business and patients.  

New Rate-Setting Methodologies  

• Proposal: Revise lead item bid ceiling rules. 
• Challenges:
  • Likely to result in lower reimbursement rates, particularly on non-lead items.
  • May disincentivize innovation or investment in higher-quality products.
• VGM Recommendation:
  • A true competitive bid program wouldn’t have a bid ceiling.  
  • If there is a bid ceiling, it should be based on the 2015 unadjusted fee schedule plus the CPIU. 
• Optional Member Guidance:  
  • Explain the impact to your business if rates are lowered. 
    • Will you have to stop providing certain services? 
    • What is the impact to patients? 

Change Winning Bid Methodology  

• Proposal: Change winning bid from maximum winning bid to 75th percentile of winning bids and reduce the number of contract winners by 25%. 
• Challenges: 
  • Likely to result in lower reimbursement rates. 
  • May negatively impact patients due to suppliers’ inability to provide services as a result of untenable rates. 
• VGM Recommendation: 
  • Every bidder should be paid at their awarded contract rate just like the managed care contracts. 
  • Recognize that it may be administratively challenging, but Medicare already has demonstrated capacity to do so currently by maintaining several rates. 
  • Would foster more accurate bidding and minimize lowball offers. 
• Optional Member Guidance:  
  • Share specific changes your company had to make due to the lower reimbursement rates implemented from previous rounds. 
    • Did you stop providing any products or services? 
    • How did these forced decisions impact patients? 
  • What business decisions will you need to make if rates are reduced even further? 
    • How will these decisions impact your patients? 
    • How will these decisions impact your employees? 

Change Contract Award Threshold  

• Proposal: Change the threshold for awarding contracts to double the number of contract suppliers that previously furnished at least 5% of the items or services needed and lower the requirement to at least 2 suppliers per competition. 
• Challenges:  
  • Will create access concerns for patients due to the decrease in contracted suppliers. 
  • Will disadvantage smaller suppliers. 
  • Potential issues with recalls
• VGM Recommendation: 
  • Recommend continuing the current requirement of at least 5 suppliers per competition. 
  • Recommend local presence for certain categories (hospital beds, oxygen, standard mobility). 
• Optional Member Guidance: 
  • Describe the changes in suppliers and services in your area. 
  • Share anecdotal stories from patients on issues with delays or difficulties receiving products and services. 

Additional Rule Provisions  

Changes to Surveys and Reaccreditation Requirements 

• Proposal: Increases survey and reaccreditation requirements to every 12 months for all providers. 
• Challenges: 
  • Increased administrative burden and potential delays in certification. 
  • Providers will struggle with compliance costs. 
• VGM Recommendations: 
  • Strongly oppose proposed change to reaccreditation survey frequency 
  • Recommend alternative methods to include: 
    • The Proposed Rule greatly underestimates the cost to providers, particularly the larger companies. 
    • Establish a method for Accrediting Organizations to communicate fraud, waste, and abuse suspicions to CMS who can then facilitate with an appropriate enforcement facility to investigate the issue.  
    • Require compliance programs to ensure companies “self-monitor.” 
    • Incorporate “spot check.” 
• Optional Member Guidance:  
  • Describe your experiences with site inspections.  
    • Explain the additional costs your company would have to cover in fees and administrative costs for your staff to handle the additional site inspections. 
    • Describe the amount of work and FTE time it takes to accommodate site inspections and the impact annual inspections would have on your business. 

Prior Authorization Exemptions 

• Proposal: Creates a process to exempt suppliers from prior authorization if they meet certain claim approval thresholds. 
• Challenges: 
  • While potentially beneficial, the criteria for exemption may be difficult to meet or maintain. 
  • CMS guidelines for granting and withdrawing exemptions are not yet established. 
  • May create a two-tiered system favoring larger, more established suppliers. 
• VGM Recommendation: 
  • Support the current prior authorization program as the process seems to be running smoothly and suppliers are supportive of it.  
  • Support expansion of prior authorization program as long as suppliers are given ample notice to prepare and it is managed efficiently by the DME MAC. 
  • Recommend that suppliers eligible for an exemption are still permitted to submit prior authorization requests in the event they would like to do so. 
• Optional Member Guidance:  
  • Share impact on business operations if exemption is not maintained and PA requirements resume. 

Changes to CGM and Insulin Pump Payment Category  

• Proposal: Changes Class II CGM and insulin pumps to Frequent and Substantial Servicing for both CBAs and non-CBAs. 
  • One-time payment for the receiver.    
• Challenges:   
  • Suppliers will have to pay manufacturers the entire purchase price up front for the receiver. Today they receive a one-time up-front reimbursement for that receiver of roughly $286. According to the proposed rule, if passed as written, suppliers would still receive roughly $286 for the receiver, but it would come in the form of monthly payments of approximately $4.77 per month over 60 months. It could take them a couple of years before that receiver is paid for.   
• VGM Recommendation:  
  • We oppose the CMS proposal to change the payment category for class II CGS. Adding CGMs to a frequent and substantial payment category means this is a continuous rental with burden on the suppliers where suppliers would assume ownership and responsibility long term. In addition, there would is financial burden that would lead to access issues for Medicare beneficiaries.  
  • Leave the CGM in current payment category in the inexpensive and routinely purchased items to avoid both financial impact and access issues for Medicare beneficiaries in both traditional Medicare plan and Medicare Advantage plans.  
  • The rationale is flawed in the proposal when calculating the monthly rental rate because the payment calculation should not be based on the 5-year reasonable useful life of the devices. Beneficiaries are treating a severe diabetes condition that would limit access to proper treatment.  Suppliers cannot sustain the financial burden of the proposed payment methodology for diabetic patients. In addition, the proposed payment methodology does not align with fast pacing advancements in technology to treat the beneficiaries.  
  • CMS should consider leaving the current payment category and methodology in place to be sustainable for both the beneficiary and suppliers.  
    • The supplier would also be on the hook for the cost of a replacement receiver if warranted, with no additional reimbursement available to offset the cost of the additional receiver. 
      • We do agree that there are frequent changes in technology within the CGM category, and there are certainly instances where a patient would need to change to a different/newer technology to better manage their diabetes. We applaud CMS’s recognition of this, and their willingness to allow patients to change devices within the 5-year RUL. However, the proposed rule, while allowing for a patient to change devices, does nothing to offset the cost of the provider having to provide a new device to the patient. In the proposed rule, payments would remain the same whether the patient stays on one device for 5 years or changes to a new device at some point during that 5-year period.  
    • If CMS has a goal of making sure that patients are compliant with their CGM therapy, thereby achieving the best health outcomes for patients and lowering their total cost of care, they need to ensure that there is both adequate competition in the marketplace as well as rates that hold up the ability for providers to maintain that level of service with their CGM patients. Many (but not all) CGM providers currently provide additional support and routine engagement with their CGM patients to make sure they understand their devices and their treatment plans to ensure they are getting the best health results possible. If reimbursement is lowered, there is a good chance that some of that additional patient engagement will have to be removed from providers’ programs, and patient therapy adherence as well as health outcomes will diminish. A recent study published in JMIR Diabetes showed that patients who receive a CGM through a DME provider vs. other provider types such as pharmacies have a 23% higher compliance rate through the DME channel. This is due in large part to the ongoing patient engagement that is offered by several DME providers today. 

• Optional Member Guidance:   

  • Describe how the change in reimbursement would negatively impact your business. 
  • What decisions would you have to make if the reimbursement is reduced. 
  • Describe the consequences for your patients should the change occur. 

Expanded Revocation Authority 

• Proposal: Allows CMS to revoke a supplier’s PTAN if the beneficiary attests to never receiving the item or service listed on the supplier’s claim. 
• Challenges:  
  • The rule does not provide a process for suppliers to respond and clarify so may result in improper revocations. 
  • Inability to challenge a revocation may create challenges for suppliers to get their PTAN reinstated. 
• VGM Recommendation: 
  • Recommend continued oversight and management by DME MACs due to unreliability of USPS and patient reporting. 
  • Recommend a stay of enrollment to give suppliers the opportunity to correct the issue. 
• Optional Member Guidance:  
  • Describe any experiences where your PTAN was deactivated, particularly in instances where you were not given an opportunity to clarify or respond. 
    • What was the impact on the business? 
    • What was the impact on your patients? 
  • Describe the real-world impact this policy would have on your business. 
  • Recommend a more balanced approach handling issues that may jeopardize your Medicare enrollment. 
• Proposal: Expands the number of scenarios where CMS may apply a retroactive revocation effective date. Retroactive effective dates would vary based on the reason for the revocation. 
• Challenges: 
  • Specific Provision Challenges: 
    • Unreasonably penalizes a supplier who misunderstood the question and did not intend to provide false or misleading information and that information is not information that would not have otherwise disqualified the supplier. 
    • Does not account for variables outside the supplier’s control during change of ownership transactions, e.g.: 
      • State delays in issuing new licenses 
      • IRS delays issuing new CP 575 documentation 
    • Disparately penalizes larger suppliers with multiple locations who have all location licenses revoked due to revocation of one location. 
    • May lead to retroactive revocation for a minor noncompliance with a supplier standard. 
  • General Challenges: 
    • Retroactive revocations would have serious consequences for suppliers and the patients they serve 
    • Raises several concerns regarding the impact of serious consequences on suppliers and patients, particularly for improper revocations due to technical and administrative errors 
• VGM Recommendation: 
  • Recommend a Stay of Enrollment to give suppliers the opportunity to correct the issue. 
  • Recommend a less punitive result for infractions. 
  • Recommend retroactive revocation be reserved for situations where the harm to the program outweighs the harm to the supplier. 
  • Recommend establishment of clearly defined criteria for when retroactive revocations are allowed. 
• Optional Member Guidance: 
  • Share how a revocation would impact your entire business, including your operations, finances, and patients. 
  • Clearly describe the serious consequences a retroactive revocation would have on your business, employees and patients. 

How To Submit Comments - Deadline Is August 29  

Click here to go to the Federal Register Comment Page.  

Choose one of the following methods to submit your feedback:    

1. Electronically: Submit comments at Regulations.gov. Follow the instructions under the “Submit a Comment” tab.     
2. By mail: Centers for Medicare & Medicaid Services Department of Health and Human Services Attention: CMS-1828-P P.O. Box 8013 Baltimore, MD 21244-8013 (Ensure timely delivery before the deadline).    
3. By express or overnight mail: Centers for Medicare & Medicaid Services Department of Health and Human Services Attention: CMS-1828-P Mail Stop C4-26-05 7500 Security Boulevard Baltimore, MD 21244-1850. 

Consider the following when drafting your comments:  

• Tailor specific to your business and patients. 
• Describe any negative impacts the proposed changes would have on your business, your employees, and patients. 
• Stick to the facts. 
• No PHI. 

VGM Is With You Every Step Of The Way   

VGM has stood by the DMEPOS community through every round of competitive bidding—and this time is no different. We remain committed to supporting suppliers throughout this process and will continue to provide resources and guidance along the way.  Please reach out to the VGM Government Relations Team for additional guidance and support.