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CMS Changes Competitive Bid Program Impacting Contracts and Bid Submission Requirements for Financial Documentation – What Providers Need to Know

Published in Government Relations on January 09, 2026

The Centers for Medicare and Medicaid Services’ (CMS) changes to the DMEPOS Competitive Bid Program as outlined in CMS-1828-F will reshape how suppliers prepare bids, qualify for contracts, and manage operational readiness. For DME suppliers, understanding both the changes to the contract awards and the bid submission is essential to understanding and preparing for the next bidding cycle. 

Changes to Financial Documentation Required for Bid Submission 

One of the most consequential updates for suppliers is the dramatic simplification of required financial documentation during bid submission. Under the updated Competitive Bidding Program (CBP), CMS will no longer require certain financial documents, including tax returns, income statements, balance sheets, and cash flow statements. All CMS will require in the next round is a business credit report with a numerical score or rating. If no numerical score exists, suppliers must instead submit a business credit report showing insufficient data, and a personal credit report for the Authorized or Delegated Official listed in PECOS. 

CMS will provide detailed information regarding the credit report and numerical credit score and/or rating requirements for entity types in the Request for Bids Instructions, which will be published prior to the opening of the bid window for each round of the DMEPOS CBP. 

Suppliers should note that Bid Surety Bonds are still required for the next round. 

Changes to CBP Contract Awards  

In addition to the changes to the financial documentation required to submit a bid, CMS has also made significant updates to the required number of contracts per category per RID CBP area and how they will determine the number of required contracts needed.

One major departure from the previous CBP is the change to allow CMS the discretion to decrease contract awards to a minimum of two contracts per product category per RID CBP area, down from the prior minimum of five contracts.  

CMS will also now rely on the most recent year’s utilization data (likely 2025 or 2026) to determine the number of contracts needed instead of supplier reported capacity. The number of contracts offered for each product category will be based on 125% of the number of suppliers furnishing at least 3% of total national allowed services for the lead item in 2025. So, for example, if eight suppliers account for 3% of utilization for a lead item, CMS may award contracts to approximately 10 suppliers (8 × 125%).  

Notably, where previously there were between 500-1000+ suppliers who were able to provide products to Medicare patients across the country, under the new CBP, there could be as few as 5-10 providers in the country who would win bids for a given category.

Though the above is concerning, the Final Rule continues to have a small supplier target stating that if fewer than 30% of winning suppliers qualify as small businesses (≤ $3.5M in annual revenue), CMS may award additional contracts to meet this benchmark.  

Supplier Considerations Due to Program Changes 

The decrease in required contracts along with the regional or nationwide RID CBP fundamentally alters the competitive dynamics for providers. 

Under a nationwide or regional RID CBP, suppliers are required to furnish items across the entire CBP regardless of where the patient lives. In order to be awarded a contract, suppliers must hold all applicable state and federal licenses in each state covered by the competitive bidding area to win a contract. Suppliers expecting to bid in the next round are encouraged to start preparing now due to the lengthy licensure process. 

However, suppliers should also exercise caution in any business decision that may negatively impact the business or personal credit report. With CMS no longer considering financial statements, the business credit report becomes the primary determinant of financial stability. Suppliers are encouraged to strengthen their credit worthiness and be mindful of any action taken that may impact their business or personal credit report. 

Questions? 

Find the Final Rule, CMS Fact Sheet, and other resources on VGM’s Competitive Bidding Resource Page and van Halem Group - Competitive Bidding Program. 

Further Reading About the Competitive Bidding Program: 

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