On Friday, November 28th, the Centers for Medicare and Medicaid Services (CMS) published Final Rule CMS-1828-F which included provisions that outlined updates to Medicare DMEPOS competitive bidding programs, Medicare DMEPOS accreditation requirements, Medicare provider enrollment processes, and Medicare prior authorization programs. As indicated when AOPA provided a high-level overview of the upcoming changes in an e-mail last weekend we have had a chance to perform additional analysis of the final rule. Additional information on the provisions of the final rule and their potential impact on the O&P community is below.
Provider Enrollment Provisions
The final rule expands CMS’ authority to deny, revoke, or deactivate a provider’s or supplier’s Provider Transaction Access Number (PTAN) which is the unique number that is assigned to an individual practice location for the purpose of submitting claims to the Medicare program. One of the more concerning provisions of the final rule is the expansion of CMS’ authority to revoke or deactivate a provider or supplier’s PTAN number retroactively. Retroactive deactivation or revocation has historically occurred when there are egregious violations of Medicare supplier numbers. The final rule expands CMS’ authority to apply retroactive effective dates for revocations or deactivations based on lapses that are often due to administrative error, such as failure to timely report a change in ownership, adverse legal action, or change in practice location, rather than intentional deception or obvious fraud and abuse. A smaller, but equally important change in the provider enrollment process is that an “authorized official” must now sign the liability insurance certificate for it to be considered compliant for Medicare enrollment purposes. This individual must match the authorized official listed on the Medicare 855-S enrollment form.
Changes to the Medicare DMEPOS Accreditation Program
The final rule includes significant changes to the Medicare DMEPOS accreditation program. The change that will have the greatest impact on O&P providers and accrediting organizations is the change from a 3-year accreditation cycle to an annual accreditation cycle. The final rule indicates that moving to an annual accreditation cycle will allow CMS to eliminate fraud and abuse by making it more difficult for unscrupulous providers and criminal entities to exploit weaknesses in the longer accreditation cycle. The final rule also outlines a significant increase in CMS oversight of the policies and operations of the 8 current deemed accrediting organizations. AOPA and many other organizations provided comments on the proposed provisions expressing serious concerns about the administrative and financial burden that this change would create for honest providers, especially small businesses but CMS ultimately made no changes from the proposed provisions in the final rule. While the effective date of the final rule is January 1, 2026, no additional information has been provided that indicates when providers and suppliers will have to begin the annual re-accreditation process. AOPA is communicating regularly with ABC and BOC and will continue to provide updates as they are available.
Updates to Medicare DMEPOS Competitive Bidding
The final rule provided details regarding plans for the next round of DMEPOS competitive bidding. Medicare competitive bidding has been paused since December 2023, but CMS indicated that it intends to implement the next round no later than January 1, 2028. While details of the program were limited in the final rule itself, CMS has released a factsheet on its website that provides a detailed timeline and discussion of various changes to the program that will be implemented in the next round. Some of the significant changes to the competitive bidding program that will be implemented in the next round include:
- Calculation of single payment amounts (SPAs) will be made using the 75th percentile of winning bids rather than the maximum winning bid.
- A remote item delivery (RID) process will be implemented for multiple product categories in the 2028 competitive bid program. This will include OTS knee, OTS spinal, and OTS upper extremity orthoses that are selected for inclusion in competitive bidding. The RID process will limit the number of contracts awarded to a handful of winning bidders who will provide items on a national basis mostly through mail order delivery. AOPA expressed significant concern regarding the inclusion of OTS orthoses in the RID program, but CMS has indicated that they will move forward.
- New limits on bid amounts. For OTS orthoses bid limits may not exceed the average 2026 Medicare fee schedule amount.
- A reduction in the financial reporting requirements for providers electing to participate in DMEPOS competitive bidding. Bidders will now only have to submit a business credit report with a numerical credit score or rating.
- New surety bond requirements. Bidders will be required to obtain a bid surety bond in the amount of $50,000 for each CBA in which they elect to submit a bid. Bid surety bonds are designed to prevent bidders from submitting artificially low bids and then refusing to award a contract.
- Tribal exemption from DMEPOS Competitive Bidding. Tribal owned suppliers will not have to participate in competitive bidding to provide items to American Indians/Alaska Natives that reside in a competitive bidding area.
- Termination clause for DMEPOS competitive bidding contracts. During a public health emergency, CMS may terminate competitive bidding contracts to quickly expand access to beneficiaries.
While Medicare competitive bidding will most likely not be re-implemented until January 2028, the bidding process typically takes 12-18 months to complete, so it is expected that CMS will begin the process early in 2026. AOPA will provide additional guidance and resources on competitive bidding as more details of the program are announced.
Updates on Medicare Prior Authorization
The final rule included a provision that will exempt Medicare providers who achieve a 90% or higher initial affirmation rate on prior authorization submissions from mandatory prior authorization for HCPCS codes included in the program. In its comments on the proposed rule AOPA suggested that providers be allowed to voluntarily continue to participate in Medicare prior authorization even if they become eligible for exemption. CMS agreed to include this as an option and memorialized it in the final rule.
The November 28th final rule announced multiple Medicare program changes that will have significant impacts on AOPA member businesses. To support our members, AOPA will continue to provide timely and detailed analysis, guidance, and resources. We will incorporate education on the implementation of this rule into future Coding and Billing seminars and other educational offerings. Please stay tuned for updates via email or visiting the AOPA website.
Questions regarding the final rule or its provisions may be directed to Joe McTernan at jmcternan@aopanet.org or Devon Bernard at dbernard@aopanet.org.
