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Report (OEI-06-11-00081)

Limited Supplier Solicitation of Prescribing Physicians Under Medicare DMEPOS Competitive Bidding Program

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Section 302(e) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), as amended by section 154(c)(2)(C) of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), directed the Office of Inspector General (OIG) to review supplier solicitation of physicians under the Medicare Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program. The Round 1 Rebid of the Medicare DMEPOS Competitive Bidding Program began in nine competitive bidding areas (CBA) on January 1, 2011, and made significant changes to the amount that Medicare pays for items included in the program and to the suppliers that Medicare will pay to furnish these items. Although a prescription change in the product brand or mode of delivery would not typically result in a different Medicare payment amount, suppliers might solicit physicians to make changes.


To examine supplier solicitation regarding brand and mode of delivery, we surveyed a sample of 294 physicians selected randomly among physicians who prescribed competitive-bid items for Medicare beneficiaries in the 9 CBAs during the first 6 months of 2011. We asked prescribing physicians whether suppliers asked them to change the specific brand or mode of delivery of competitive-bid items, the frequency of such requests, reasons for requests, and whether they approved the requested changes. We also examined calls related to the Medicare DMEPOS Competitive Bidding Program received by three hotlines during the same 6-month period.


Most physicians were not solicited by DMEPOS suppliers to change the prescribed brand or mode of delivery for competitive-bid items. Many physicians did not prescribe brand (58 percent) or mode of delivery (35 percent) for any competitive-bid items and, therefore, had no reason to be solicited by suppliers. Further, most physicians who prescribed a specific brand or mode of delivery received no solicitation from suppliers for changes regarding brand (69 percent) or mode of delivery (78 percent). Within our sample, most physicians who received requests from suppliers described such requests as rare or occasional and typically approved the changes. Physicians in our sample reported that supplier reasons for change requests included the supplier's belief that a different brand or mode of delivery would better meet patient needs, the supplier's not carrying the prescribed brand, and requests from patients. Finally, none of the nearly 37,000 hotline calls related to the Medicare DMEPOS Competitive Bidding Program involved concerns about supplier solicitation of physicians regarding brand or mode of delivery.


These results from the early months of the program suggest limited supplier solicitation of physicians. The Medicare DMEPOS Competitive Bidding Program is an important new initiative for controlling costs and reducing fraud, waste, and abuse in Medicare's medical equipment benefit program; OIG has other ongoing work regarding the Medicare DMEPOS Competitive Bidding Program and will continue to monitor this important initiative.

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