In 2003 a law was passed that required Medicare to solicit bids from companies that provide home medical equipment (DME). The purpose was to change the way the reimbursement for each item is calculated. Currently, the reimbursement for each item is arrived at by a fee schedule that is approved by Congress. The goal of the new system is to have the market set the pricing through a bidding program.

In addition, the program changes which companies can provide this equipment. Currently, any company with a Medicare provider number can provide and bill for the equipment. Under the new program, only companies contracted with Medicare will be able to accept new patients.

Beginning January 1, 2011 this new program goes into effect. All referrals for the products listed below must be sent to a provider who is contracted with Medicare.