Department of Health and Human Services 
OFFICE OF 
  INSPECTOR GENERAL 
 
 
 
 
 
  L S
IMITED  UPPLIER 
 
SOLIC  ITATION OF PRESCRIBING 
 
P U M
HYS  ICIANS  NDER  EDICARE 
 
DMEPOS C
    OMPETITIVE 
B P  
IDDING  ROGRAM
Stuart Wright  
Deputy Inspector General for 
Evaluation and Inspections 
 
December 2012 
OEI-06-11-00081   
   
EXECUTIVE SUMMARY:  LIMITED SUPPLIER SOLICITATION OF PRESCRIBING 
PHYSICIANS UNDER THE MEDICARE DMEPOS COMPETITIVE BIDDING PROGRAM  
OEI-06-11-00081 
 
WHY WE DID THIS STUDY  
 
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.   
 
HOW WE DID THIS STUDY 
 
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. 
 
WHAT WE FOUND 
 
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 suppliers belief that a different brand or mode of delivery 
would better meet patient needs, the suppliers 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. 
 
WHAT WE CONCLUDE 
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 Medicares medical equipment benefit program; OIG has 
other ongoing work regarding the Medicare DMEPOS Competitive Bidding Program and will continue 
to monitor this important initiative.
       
   
   
 
TABLE OF CONTENTS 
 
Objective ......................................................................................................1 
Background ..................................................................................................1 
Methodology ................................................................................................5 
Findings........................................................................................................9 
Physicians reported limited solicitation by DMEPOS suppliers     
to change the prescribed brand for competitive-bid items ...............9 
Physicians reported limited solicitation by DMEPOS suppliers     
to change the prescribed mode of delivery for competitive-bid 
items ...............................................................................................10 
None of the hotline calls involved supplier solicitation of 
physicians regarding brand or mode of delivery ............................ 11 
Conclusion .................................................................................................12 
Appendixes ................................................................................................13 
A:  Estimates and Confidence Intervals .........................................13 
B:  Survey Responses from Physicians in Sample.........................15 
Acknowledgments......................................................................................18 
 
 
       
     
OBJECTIVE 
To assess the extent to which suppliers solicited physicians regarding the 
brand or mode of delivery of items covered under the Medicare Durable 
Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) 
Competitive Bidding Program. 
BACKGROUND  
Statutory Mandate to Examine Supplier Solicitation 
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), directs the Office of Inspector General (OIG) to review the 
Medicare DMEPOS Competitive Bidding Program that began  
January 1, 2011.  Specifically, OIG is to determine the extent to which  
(if any) suppliers of covered items of durable medical equipment that are 
subject to the competitive acquisition program... are soliciting physicians 
to prescribe certain brands or modes of delivery of covered items based on 
profitability.1 
Under the Medicare DMEPOS Competitive Bidding Program, physicians 
can prescribe a specific brand if they determine that it is needed to avoid 
an adverse medical outcome for the beneficiary.2  When a physician 
prescribes a specific brand, the contract supplier must furnish the item as 
prescribed, ask the physician to approve a change to an alternative brand, 
or assist the beneficiary in finding another contract supplier to furnish the 
prescribed brand.  Although a change in the product brand would not 
result in a different Medicare payment amount, suppliers might still have 
financial motivation to solicit physicians to change the prescribed brand.  
For example, if the supplier does not carry the prescribed brand or does 
not have the brand in stock, the supplier might ask for a change in brand 
rather than send the patient to a different supplier.     
If a physician does not prescribe a specific brand on the basis of medical 
necessity, Medicare allows suppliers to choose which brand to provide 
 
1 In a letter dated June 30, 2010, Inspector General Daniel Levinson informed the 
committees of jurisdiction in Congress that by July 1, 2011, OIG would issue an initial 
report describing our work to date and plans for completing the study.  In Congressional 
LetterStatus of Mandated Review of the Competitive Bidding Program, issued  
June 29, 2011, OIG described our work to date.  This report provides the full results of 
the mandated review.  
2 Social Security Act (SSA)  1847(a)(5).  Centers for Medicare & Medicaid Services 
(CMS), Medicare Claims Processing Manual, Pub. 100-04, ch. 36,  30.4. 
Limited Supplier Solicitation of Prescribing Physicians Under DMEPOS Competitive Bidding (OEI-06-11-00081)             1     
when filling a DMEPOS prescription.3  In this situation, a supplier would 
have no need to solicit the prescribing physician to approve a change.   
For example, if a physician prescribes diabetic test strips for measuring a 
beneficiarys blood glucose level but does not prescribe a particular brand, 
the supplier has discretion to provide any brand of test strips.   
Physicians may also prescribe specific modes of delivery for two product 
types covered under the Medicare DMEPOS Competitive Bidding 
Program:  oxygen and enteral nutrients.4  Mode of delivery refers to the 
specific way in which these products are administered to the patient.  For 
example, patients can receive oxygen through a stationary or portable 
gaseous oxygen system, liquid oxygen system, or oxygen concentrator.  
DMEPOS suppliers can request changes regarding the prescribed mode of 
delivery.5  Changes in mode of delivery could change the supplier billing 
code for the product, resulting in a change in the amount that Medicare 
pays (e.g., Medicare pays different amounts for stationary and portable 
oxygen supplies).   
Medicare DMEPOS Competitive Bidding Program 
To participate in the Medicare DMEPOS Competitive Bidding Program, 
DMEPOS suppliers competed to become Medicare contract suppliers for 
selected DMEPOS items within nine specific geographic areas known as 
competitive bidding areas (CBA).6  Each CBA includes ZIP Codes in the 
associated metropolitan statistical area.  The nine CBAs are:   
 
3 Medicare Claims Processing Manual, Chapter 36  30.4. 
4 Enteral nutrients are liquid food supplied to the stomach or small intestines through a 
feeding tube.  National Institutes of Health, National Digestive Diseases Information 
Clearinghouse, Short Bowel Syndrome.  Accessed at 
http://digestive.niddk.nih.gov/ddiseases/pubs/shortbowel/index.aspx on September 12, 
2012. 
5 Centers for Medicare & Medicaid Services (CMS), Medicare Claims Processing 
Manual, Pub. 100-04, ch. 36,  30.4. 
6 For all metropolitan statistical areas not included in a CBA, the Centers for Medicare   
& Medicaid Services (CMS) continues to administer the Medicare DMEPOS benefit as 
before.  CMS announced on August 19, 2011, that the Medicare DMEPOS Competitive 
Bidding Program will expand to an additional 91 major metropolitan areas and that new 
prices in those areas are targeted to go into effect on July 1, 2013.  CMS, Medicare to 
Save Taxpayers and Beneficiaries $28 Billion with an Expanded Competitive Bidding 
ProgramProgram To Purchase Durable Medical Equipment Beginning Second Phase. 
Accessed at http://www.cms.gov/apps/media/press/release.asp?Counter=4064 on 
September 6, 2012.  In addition, CMS will expand the Medicare DMEPOS Competitive 
Bidding Program for diabetic supplies to include all ZIP Codes in all parts of the United 
States.  CMS, Facts about the Durable Medical Equipment, Prosthetics, Orthotics, and 
Supplies (DMEPOS) Competitive Bidding ProgramCompetitive Bidding Areas (CBAs) 
Round 2 and National Mail-Order Competition.  Accessed at 
http://www.dmecompetitivebid.com/Palmetto/Cbic.Nsf/files/Rd2_Bidding_CBAs0811.p
df/$File/Rd2_Bidding_CBAs0811.pdf on November 7, 2012. 
Limited Supplier Solicitation of Prescribing Physicians Under DMEPOS Competitive Bidding (OEI-06-11-00081)             2     
  Charlotte, Gastonia, and Concord (North Carolina and South 
Carolina);  
  Cincinnati and Middletown (Indiana, Ohio, and Kentucky);  
  Cleveland, Elyria, and Mentor (Ohio);  
  Dallas, Fort Worth, and Arlington (Texas);  
  Kansas City (Kansas and Missouri);  
  Miami, Fort Lauderdale, and Pompano Beach (Florida);  
  Orlando and Kissimmee (Florida);  
  Pittsburgh (Pennsylvania); and 
  Riverside, San Bernardino, and Ontario (California).7  
CMS and its Competitive Bidding Implementation Contractor (CBIC) 
evaluated suppliers bids based on several criteria, including the bidders 
compliance with quality standards and accreditation requirements, 
compliance with State licensure requirements, financial stability, estimated 
capacity to provide DMEPOS products, and bid amount.8  CMS awarded 
contracts to the winning bidders, known as contract suppliers, in 
November 2010.9  Starting on January 1, 2011, beneficiaries with 
Medicare who obtain items that that were subject to the competitive bid 
process in the Round 1 Rebid10 CBAs had to obtain these items from a 
contract supplier for Medicare to pay, unless an exception applies.  Using 
the bids submitted by suppliers, CMS set a single payment amount for  
   
 
7 CMS, Facts about the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies 
(DMEPOS) Competitive Bidding ProgramCompetitive Bidding Areas (CBAs).  
Accessed at 
http://www.dmecompetitivebid.com/Palmetto/Cbic.nsf/files/Fact_Sheet_Competitive_Bi
dding_Areas.pdf/$FIle/Fact_Sheet_Competitive_Bidding_Areas.pdf on June 18, 2012. 
8 CMS, Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) 
Bid System (DBidS) ApplicationGetting Started:  Checklist. Accessed at 
http://www.dmecompetitivebid.com/cbic/cbicrd1.nsf/files/DBidS_Getting_Started_Chec
klist.pdf/$FIle/DBidS_Getting_Started_Checklist.pdf on June 6, 2011.  See also 42 CFR 
 414.414 and SSA  1847(b)(2). 
9 CMS, Contract Suppliers Selected Under New Medicare Program.  Accessed at 
http://www.cms.gov/apps/media/press/release.asp?Counter=3861 on June 18, 2012.  
10 CMS conducted two rounds of bidding in the nine CBAs, Round 1 and the Round 1 
Rebid.  Only the Round 1 Rebid went in to effect.  See Round 1 Rebid:  Home.  Accessed 
at 
http://www.dmecompetitivebid.com/palmetto/cbicrd1rebid.nsf/vMasterDID/8TARY3716
1 on November 9, 2012. 
Limited Supplier Solicitation of Prescribing Physicians Under DMEPOS Competitive Bidding (OEI-06-11-00081)             3     
each DMEPOS item in each CBA, replacing the prior Medicare fee 
schedule amount.11 
Competitive Bidding Product Categories 
The 253 DMEPOS items included in the Round 1 Rebid of the Medicare 
DMEPOS Competitive Bidding Program (hereafter referred to as 
competitive-bid items) are generally high-cost or high-volume products 
and are grouped into the following 9 product categories, with each product 
category consisting of multiple related items: 12, 13 
  oxygen, oxygen equipment, and supplies;  
  standard power wheelchairs, scooters, and related accessories;  
  complex rehabilitation power wheelchairs and related accessories 
(Group 2 only); 14 
  mail-order diabetic supplies;  
  enteral nutrients, equipment, and supplies;  
  continuous positive airway pressure (CPAP) devices, respiratory assist 
devices, and related supplies and accessories;  
  hospital beds and related accessories;  
  walkers and related accessories; and  
  (in the Miami CBA only) support surfaces (Group 2 mattresses and 
overlays only).15   
 
11 SSA  1847(b)(5); 42 CFR  414.416.  For a list of single payment amounts, see CMS, 
Single Payment Amounts Per CBA.  Accessed at 
http://www.dmecompetitivebid.com/Palmetto/cbicrd1rebid.nsf/files/SPA_All_Product_C
ategories.pdf/$FIle/SPA_All_Product_Categories.pdf on September 6, 2012. 
12 CMS, General Overview of the Final Rule for Competitive Acquisition for Certain 
Durable Medical Equipment, Prosthetics, Orthotics, and Supplies.  Accessed at 
https://www.cms.gov/DMEPOSCompetitiveBid/Downloads/DMEPOSRegSumm.pdf on 
June 10, 2011.  See also 72 Fed. Reg. 17992, 18021 (Apr. 10, 2007). 
13 In addition to expanding to more metropolitan areas, CMS also announced changes to 
the competitive bidding product categories, such as expanding the standard mobility 
device category to include more products, adding a category for negative pressure wound 
therapy pumps and related supplies and accessories, and eliminating the complex 
rehabilitation power wheelchairs category.  CMS, Round 2 Items & Services.  Accessed 
at 
http://www.dmecompetitivebid.com/Palmetto/Cbic.Nsf/files/Rd2_Bidding_ItemsServices
0811.pdf/$File/Rd2_Bidding_ItemsServices0811.pdf on July 31, 2012. 
14 CMS classifies power wheelchairs into six groups on the basis of performance 
characteristics. 
15 Group 2 support surfaces include powered pressure-reducing mattress overlays and 
replacement mattresses.  CMS, DMEPOS Competitive BiddingRound 1 Rebid:  
Product Categories and HCPCS Codes.  Accessed at 
http://www.dmecompetitivebid.com/Palmetto/Cbic.nsf/files/HCPCS_Codes.pdf/$FIle/H
CPCS_Codes.pdf on June 18, 2012. 
Limited Supplier Solicitation of Prescribing Physicians Under DMEPOS Competitive Bidding (OEI-06-11-00081)             4     
Telephone Hotlines   
Three telephone hotlines are available for beneficiaries, providers, or other 
concerned parties to lodge complaints, ask questions, or refer potentially 
fraudulent Medicare provider practices.  The 1-800-Medicare hotline 
provides general assistance and answers questions about Medicare 
coverage.16  If 1-800-Medicare operators are unable to answer a question 
about the Medicare DMEPOS Competitive Bidding Program, the operator 
will arrange for the caller to be assisted by the CBIC or by CMS regional 
office staff.  The CBIC Ombudsmans office is staffed by local 
ombudsmen with specialized training to assist beneficiaries, suppliers, and 
health care providers.  The CBIC Ombudsman also tracks beneficiary 
complaints or concerns about specific suppliers and works to resolve those 
complaints.  Lastly, OIG operates the 1-800-HHS-TIPS hotline, which is 
available to anyone who wants to report a concern about fraud, waste, or 
abuse in any program run by the Department of Health and Human 
Services, including the Medicare DMEPOS Competitive Bidding 
Program. 
METHODOLOGY 
Scope 
This review focuses on the first 6 months of the Round 1 Rebid of the 
Medicare DMEPOS Competitive Bidding Program (JanuaryJune 2011) 
in the initial nine CBAs.  For this time period and these locations, we 
surveyed a random sample of physicians to learn whether they were 
solicited by DMEPOS suppliers regarding prescribed brands or modes of 
delivery of competitive-bid items.  We also examined data from three 
hotlines for the same timeframe and geographic locations to learn about 
any calls that the hotlines might have received regarding supplier 
solicitation of physicians regarding brand or mode of delivery under the 
Medicare DMEPOS Competitive Bidding Program. 
Sample  
Using CMSs Durable Medical Equipment Standard Analytic file, we 
identified 12,431 physicians who were listed as the prescribing physician 
on at least 5 claims for competitive-bid items in the nine CBAs during the 
first 6 months of 2011.  From this population, we selected a stratified, 
random sample of 300 physicians who prescribed competitive-bid items to 
beneficiaries living in the nine CBAs.   
 
16 CMS, 1-800-Medicare.  Accessed at https://www.cms.gov/1800medicare on 
October 22, 2012. 
Limited Supplier Solicitation of Prescribing Physicians Under DMEPOS Competitive Bidding (OEI-06-11-00081)             5     
To ensure representation of physicians who prescribed different volumes 
of competitive-bid items, we stratified the sample by the physicians 
volume of claims.  The population of physicians in the sample frame 
consisted of: 
  7,747 physicians who prescribed 519 items for  
17,899 beneficiaries (Stratum 1) 
  4,117 physicians who prescribed 2089 items for  
34,444 beneficiaries (Stratum 2) 
  567 physicians who prescribed 90 or more items for  
18,384 beneficiaries (Stratum 3)   
We randomly selected 100 physicians for each stratum.  After we 
eliminated 6 ineligible physicians, the sample consisted of 
294 physicians.17  
Survey of Prescribing Physicians 
We surveyed each physician in the sample to learn whether DMEPOS 
suppliers had asked them to change prescribed brands or modes of 
delivery of competitive-bid items during the first 6 months of the 
Medicare DMEPOS Competitive Bidding Program.  Specifically, we 
asked physicians about: 
  whether they prescribed specific brands or modes of delivery of 
competitive-bid items; 
  the types of products that suppliers asked them to change, the 
frequency of such requests, and the reasons for these requests; and  
  whether they approved the requested changes. 
To distribute the survey, we telephoned physicians offices to inform them 
of the survey and sent a link to a Web-based survey.  Most respondents 
completed the survey online; the other respondents completed the survey 
by telephone with OIG staff or on paper.  We made multiple attempts to 
follow up with physicians who did not initially respond, including 
contacting physicians by telephone and mailing hard copies of the survey.  
We conducted data collection during October 2011 through 
February 2012.  
Overall, 214 physicians completed the survey, a 73 percent response rate.18  
Many physicians were difficult to reach and their staffs often indicated 
 
17 We deemed six physicians to be ineligible for the survey due to physician death or 
billing error or because of law enforcement request.  These included two physicians from 
Stratum 1, three from Stratum 2, and one from Stratum 3. 
18 The weighted response rate, based on responses within each stratum, was 68 percent. 
Limited Supplier Solicitation of Prescribing Physicians Under DMEPOS Competitive Bidding (OEI-06-11-00081)             6     
that they were too busy to complete the survey.  Table 1 shows survey 
response rates.   
Table 1:  Physician Survey Response Rates 
Stratum:  Number of 
Survey 
Competitive-bid  Sample   Response Rate 
Respondents 
Items Prescribed 
1:  519 items  98  63  64% 
2:  2089 items  97  72  74% 
3:  90 or more items   99  79  80% 
Total  294  214  73%* 
Source:  OIG analysis of survey respondents, 2012. 
*The weighted response rate, based on responses within each stratum, was 68 percent. 
Analysis of Survey Responses 
To assess whether DMEPOS suppliers asked physicians to change the 
prescribed brand or mode of delivery, we analyzed the responses from  
214 physician surveys.  For both brand and mode of delivery, we projected 
the percentage of physicians who prescribed a specific brand or mode of 
delivery and physicians who received change requests from DMEPOS 
suppliers for at least one competitive-bid item.  Because of small sample 
sizes in each stratum, for physicians who reported receiving requests to 
change brand or mode of delivery, we did not make projections on the 
basis of their further responses about the requests, such as the type of 
competitive-bid items involved.   
Appendix A contains the point estimates and 95-percent confidence 
intervals based on this analysis, and Appendix B contains survey 
responses from physicians in the sample.   
Medicare Hotline Calls  
To identify other potential problems related to supplier solicitation 
regarding brand or mode of delivery of items in the Medicare DMEPOS 
Competitive Bidding Program, we analyzed calls received by 
1-800-Medicare, 1-800-HHS-TIPS, and the CBIC Ombudsman during the 
first 6 months of 2011.  We first identified the calls that related to the 
Limited Supplier Solicitation of Prescribing Physicians Under DMEPOS Competitive Bidding (OEI-06-11-00081)             7     
Medicare DMEPOS Competitive Bidding Program.19  We then determined 
the extent to which these calls related to supplier solicitation of physicians 
regarding brand or mode of delivery.   
Limitations 
Limitations in the memories of individual physicians could have affected 
their survey responses and, therefore, our findings.  For example, a 
physician could have reported an instance of supplier solicitation that 
actually occurred prior to the beginning of the Medicare DMEPOS 
Competitive Bidding Program, or that was related to noncovered products 
or patients not covered by Medicare.  Although we could not eliminate the 
chance of receiving such responses, we attempted to avoid potential 
problems by reminding physicians to focus their responses solely on 
Medicare patients, items covered under the Medicare DMEPOS 
Competitive Bidding Program, and their experiences during the first 
6 months of the program.  In addition, because of the relatively low survey 
response rate, the findings in this report project only to the population 
represented by the survey respondents.  It is possible that nonrespondents 
had different experiences with supplier solicitation regarding brand and 
mode of delivery of competitive-bid items than survey respondents, thus 
potentially biasing our results.   
Standards 
This study was conducted in accordance with the Quality Standards for 
Inspection and Evaluation issued by the Council of the Inspectors General 
on Integrity and Efficiency. 
   
 
19 For 1-800-Medicare, we included calls categorized under 11 specific customer service 
call scripts related to the Medicare Competitive Bidding Program items, i.e., those for 
the following category codes:  220.10.205 (oxygen, oxygen equipment, and supplies); 
220.10.210 (complex rehabilitation power wheelchairs and related accessories); 
220.10.215 (standard power wheelchairs, scooters, and related accessories); 220.10.220 
(mail-order diabetic suppliesthis single code had three call-script versions:  1.8, 1.9, 
and 2.0), 220.10.225 (enteral nutrients, equipment, and supplies); 220.10.230 (CPAP 
devices, respiratory assist devices, and related supplies and accessories); 220.10.235 
(hospital beds and related accessories); 220.10.245 (walkers and related accessories); and 
220.10.250 (support surfaces (Group 2 mattresses and overlays in the Miami CBA only)).  
The 1-800-Medicare data about these calls indicated the number of times that customer 
service representatives used each call script to address beneficiary inquiries. 
Limited Supplier Solicitation of Prescribing Physicians Under DMEPOS Competitive Bidding (OEI-06-11-00081)             8     
FINDINGS 
Physicians reported limited solicitation by DMEPOS 
suppliers to change the prescribed brand for 
competitive-bid items 
During the first 6 months of the Medicare DMEPOS Competitive Bidding 
Program, 58 percent of physicians did not prescribe brand-specific 
products and therefore had no reason to be solicited by suppliers regarding 
brand changes.  When a physician did not prescribe a specific brand, 
suppliers could choose which brand of competitive-bid items to provide to 
beneficiaries.   
The remaining 42 percent of physicians prescribed a specific brand for at 
least one competitive-bid item.  Of the 94 physicians in our sample who 
prescribed specific brands, reasons cited for prescribing specific brands 
included:  the patients treatment needs (66), the physicians prior 
experience with specific brands (66), and patient requests (64).  (See 
Appendix Table B-1 for physician reasons for prescribing brand, by 
sample stratum.)  
Physician prescribing rates varied across the nine product categories.   
For example, 36 percent of physicians who prescribed diabetic supplies 
prescribed a specific brand; 25 percent of physicians who prescribed 
enteral nutrients, equipment, and supplies prescribed a specific brand.20  
(See Appendix A for brand prescribing point estimates for all product 
categories.) 
About two-thirds of physicians who prescribed specific brands 
did not receive requests for brand changes from suppliers 
An estimated 69 percent of physicians who prescribed a specific brand for 
competitive-bid items did not receive any requests for brand changes; the 
remaining 31 percent of physicians received a change request for at least 
one competitive-bid item.  In the sample, 33 physicians received a request 
for brand change, with over half (22 of 33) involving suppliers of 
diabetic-related items.  (See Appendix Table B-2 for requests for brand 
changes, by product category and sample stratum.)  Most physicians in the 
sample who received a request for brand change (25 of 33) described 
requests as rare or occasional.  (See Appendix Table B-3 for physician 
responses on frequency of requests for brand changes, by sample stratum.)   
Although physicians in the sample could not know whether financial 
motivations influenced suppliers to request brand changes, they described 
 
20 The 95-percent confidence interval for the 25 percent estimate is 13.636.4 percent.  
Limited Supplier Solicitation of Prescribing Physicians Under DMEPOS Competitive Bidding (OEI-06-11-00081)             9     
the reasons that suppliers indicated for the requests and whether they 
approved changes.  Among the 33 physicians in our sample who received 
a request for brand change, the physician-reported reasons for change 
requests included the suppliers not carrying the prescribed brand (16), the 
suppliers belief that a different brand might be better for the patient (12), 
and the patients having asked for a different brand (11).  (See Appendix 
Table B-4 for reasons for supplier requests for brand changes, by sample 
stratum.)  Most physicians in the sample (24 of 33) who received requests 
for brand changes approved the requested changes.  (See Appendix 
Table B-5 for physician responses to supplier requests for brand changes, 
by sample stratum.) 
Physicians reported limited solicitation by DMEPOS 
suppliers to change the prescribed mode of delivery 
for competitive-bid items 
Thirty-five percent of physicians did not prescribe a specific mode of 
delivery for any competitive-bid items during the first 6 months of the 
Medicare DMEPOS Competitive Bidding Program and therefore had no 
reason to be solicited by suppliers regarding mode of delivery.  When a 
physician did not prescribe a specific mode of delivery for competitive-bid 
items, suppliers could choose the mode of delivery to provide to 
beneficiaries. 
The remaining 65 percent of physicians specified mode of delivery on at 
least one prescription for either of the two competitive-bid items that can 
have mode of delivery specifications, i.e. (1) oxygen and (2) enteral 
nutrients, equipment, and supplies.  (See Appendix A for point estimates 
for physician prescribing of a specific mode of delivery for each product 
category.)  Among the 151 physicians in our sample who prescribed a 
specific mode of delivery, reasons cited included wanting to follow 
generally accepted standards of care for the prescribed products (119), 
wanting to gain better patient compliance with treatment (97), and wanting 
to respond to patient requests (71).  (See Appendix Table B-6 for physician 
reasons for prescribing a specific mode of delivery, by sample stratum.)   
About three-quarters of physicians who prescribed a specific 
mode of delivery did not receive change requests from 
suppliers 
An estimated 78 percent of physicians who prescribed a specific mode of 
delivery did not receive change requests; the remaining 22 percent of 
physicians received a request to change the prescribed mode of delivery 
for at least one competitive-bid item.  In the sample, 32 physicians 
received such requests, nearly all with regard to oxygen supplies.  (See 
Limited Supplier Solicitation of Prescribing Physicians Under DMEPOS Competitive Bidding (OEI-06-11-00081)             10     
Appendix Table B-7 for requests in our sample to change the prescribed 
mode of delivery, by product category and sample stratum.)  All 32 
physicians described requests to change the prescribed mode of delivery as 
rare or occasional.  (See Appendix Table B-8 for physician responses on 
frequency of requests to change the prescribed mode of delivery, by 
sample stratum.)    
Although physicians in our sample could not know whether financial 
motivations influenced suppliers to request changes in the prescribed 
mode of delivery, they described the reasons that suppliers indicated for 
the requests and whether they approved the changes.  Among the 
32 physicians in our sample who received a request to change the 
prescribed mode of delivery, the physician-reported reasons for requests 
included the suppliers belief that the patient would be better served by a 
different mode of delivery (26) and the patients having requested a 
different mode of delivery (19).  (See Appendix Table B-9 for supplier 
reasons for requests to change the prescribed mode of delivery, by sample 
stratum.)  Almost all physicians in the sample approved the requested 
changes (29 of 32 physicians).  (See Appendix Table B-10 for physician 
responses to requests to change the prescribed mode of delivery, by 
sample stratum.)  
Hotline call data did not indicate problems with 
supplier solicitation of physicians regarding brand or 
modes of delivery  
During the first 6 months of the Medicare DMEPOS Competitive Bidding 
Program, Medicare received almost 37,000 calls about competitive 
bidding, but none indicated supplier solicitation of physicians to change a 
prescribed brand or mode of delivery.21  Rather, almost all of these calls 
involved hotline customer services representatives assisting beneficiaries 
in finding a supplier to fill their DMEPOS prescriptions under the new 
program.  Although some of the calls related to the brand of DMEPOS 
productsespecially in helping beneficiaries to locate suppliers that 
carried specific brands of diabetic testing suppliesnone referenced 
supplier solicitation of prescribing physicians.   
 
21 We reviewed a total of 36,941 calls related to the Medicare DMEPOS Competitive 
Bidding Program:  36,508 to 1-800-Medicare, 343 to 1-800-HHS-TIPS, and 90 to the 
CBIC Ombudsman.  
Limited Supplier Solicitation of Prescribing Physicians Under DMEPOS Competitive Bidding (OEI-06-11-00081)             11     
CONCLUSION  
This report addresses the statutory mandate for OIG to examine the extent 
to which DMEPOS suppliers solicited physicians regarding either the 
brand or the mode of delivery of items competitive-bid under the 
Medicare DMEPOS Competitive Bidding Program.  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 also examined calls related to the Medicare 
DMEPOS Competitive Bidding Program received by three hotlines during 
the same 6-month period. 
We found that 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 a specific 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 suppliers belief that a 
change would better meet patient needs, the suppliers not carrying the 
prescribed brand, and requests from patients.  Finally, none of the nearly 
37,000 hotline calls involved concerns about supplier solicitation of 
physicians under the Medicare DMEPOS Competitive Bidding Program. 
Our study results found limited supplier solicitation and general agreement 
between physicians and suppliers when solicitation took place, indicating 
that supplier solicitation does not appear to pose a problem for the 
Medicare DMEPOS Competitive Bidding Program.  However, our results 
do not rule out the possibility of some supplier solicitation based on profit.  
Indeed, a small number of physicians in our sample received brand or 
mode of delivery change requests that they did not approve, presumably 
because they did not judge the changes to be in the best interest of 
patients.  OIG has other ongoing work regarding the Medicare DMEPOS 
Competitive Bidding Program and will continue to monitor the program as 
it expands.     
Limited Supplier Solicitation of Prescribing Physicians Under DMEPOS Competitive Bidding (OEI-06-11-00081)             12     
APPENDIX A  
Point Estimates and Confidence Intervals 
We computed estimates and corresponding 95-percent confidence intervals 
using appropriate statistical methods based on the stratified sample design.
 
Table A-1:  Point Estimates and Confidence Intervals 
95-Percent Confidence 
Point  Interval 
Analysis  Sample Size 
Estimate 
Lower Bound  Upper Bound 
Brand Analysis  
Physicians who did not prescribe a specific brand  214  57.8%  49.5%  66.1% 
Physicians who prescribed a specific brand  214  42.2%  33.9%  50.5% 
Physicians who prescribed a specific brand and were 
94  30.9%  19.1%  42.7% 
solicited 
Physicians who prescribed a specific brand and were not 
94  69.1%  57.3%  80.9% 
solicited 
Physician Prescribing by Product Category 
Physicians who prescribed diabetic supplies  214  82.6%  75.2%  88.5% 
Physicians who prescribed enteral nutrients, equipment, 
214  41.7%  33.5%  49.9% 
and supplies 
Physicians who prescribed continuous positive airway 
pressure (CPAP) devices, respiratory assist devices, and  214  64.6%  56.5%  72.7% 
related supplies and accessories 
Physicians who prescribed support surfaces  214  32.7%  25.0%  40.4% 
Physicians who prescribed standard power wheelchairs  214  66.3%  58.4%  74.3% 
Physicians who prescribed oxygen, oxygen equipment, 
214  84.7%  77.5%  90.3% 
and supplies 
Physicians who prescribed complex rehabilitation power 
214  26.1%  18.7%  33.5% 
wheelchairs 
Physicians who prescribed walkers and related 
214  85.9%  79.2%  91.0% 
accessories 
Physicians who prescribed hospital beds and related 
214  63.7%  55.6%  71.8% 
accessories 
Physician Prescribing of Brand by Product Category 
Physicians who prescribed diabetic supplies, specifying 
161  36.1%  27.2%  45.0% 
brand 
Physicians who prescribed enteral nutrients, equipment, 
87  25.0%  13.6%  36.4% 
and supplies, specifying brand 
Physicians who prescribed CPAP devices, respiratory 
assist devices, and related supplies and accessories,  150  13.5%  7.6%  21.7% 
specifying brand 
Physicians who prescribed standard power wheelchairs, 
138  9.4%  4.1%  17.7% 
specifying brand 
Physicians who prescribed oxygen, oxygen equipment, 
185  4.6%  1.9%  9.1% 
and supplies, specifying brand 
Physicians who prescribed walkers and related 
171  0.7%  0.02%  3.3% 
accessories, specifying brand 
Physicians who prescribed hospital beds and related 
131  0.3%  0.0001%  3.4% 
accessories, specifying brand 
 
Limited Supplier Solicitation of Prescribing Physicians Under DMEPOS Competitive Bidding (OEI-06-11-00081)             13     
    
Table A-1:  Point Estimates and Confidence Intervals (continued) 
Mode of Delivery Analysis  
95-Percent Confidence 
Point  Interval 
  Sample Size 
Estimate 
Lower Bound  Upper Bound 
Physicians who did not prescribe mode of delivery  214  35.0%  26.9%  43.0% 
Physicians who prescribed a specific mode of delivery  214  65.0%  57.0%  73.1% 
Physicians who prescribed a specific mode of delivery 
151  78.1%  68.3%  86.0% 
and were not solicited 
Physicians who prescribed a specific mode of delivery 
151  21.9%  14.0%  31.7% 
and were solicited 
Physicians who prescribed oxygen, oxygen equipment, 
185  69.4%  60.9%  78.0% 
and supplies, specifying mode of delivery 
Physicians who prescribed enteral nutrients, equipment, 
87  76.4%  63.9%  86.2% 
and supplies, specifying mode of delivery 
Source:  Office of Inspector General analysis of survey responses from 214 physicians, 2012. 
Note:  Due to small sample sizes in each stratum, we were unable to project (1) the percentage of physicians who prescribed support surfaces, 
specifying brand and (2) the percentage of physicians who prescribed complex rehabilitation power wheelchairs, specifying brand. 
Limited Supplier Solicitation of Prescribing Physicians Under DMEPOS Competitive Bidding (OEI-06-11-00081)             14     
APPENDIX B  
Survey Responses from Physicians in Sample 
 
Table B-1:  Number of Physicians in Sample, by Reasons for Prescribing 
Brand (n = 94) 
Stratum 3:   
Stratum 1:   Stratum 2:    Total Number   
Reason  90 or more 
519 items  2089 items  of Physicians 
items 
Patient needs  15  20  31  66 
Physicians prior 
19  21  26  66 
experience with brand 
Patient request  18  20  26  64 
Brand features  12  18  25  55 
Better patient compliance  11  14  26  51 
Brand reputation  9  16  19  44 
Recommended by other 
9  4  6  19 
health professional 
Recommended by sales 
1  3  0  4 
representative 
Other   10  9  11  30 
Source:  Office of Inspector General (OIG) analysis of survey responses from 214 physicians, 2012. 
Note:  Physicians are represented in more than one reason category because physicians could select multiple reasons 
for prescribing a product brand.   
 
Table B-2:  Number of Physicians in Sample Who Received Requests for 
Brand Changes, by Product Category (n = 33) 
Stratum 3:   
Stratum 1:   Stratum 2:    Total Number   
Product Category  90 or more 
519 items  2089 items  of Physicians 
items 
Diabetic supplies  7  6  9  22 
Continuous positive 
airway pressure (CPAP) 
devices, respiratory assist  0  2  4  6 
devices, and related 
supplies and accessories 
Oxygen, oxygen 
0  1  4  5 
equipment, and supplies 
Enteral nutrients, 
1  0  1  2 
equipment, and supplies 
Support surfaces  2  0  0  2 
Hospital beds and related 
0  0  1  1 
accessories 
Standard power 
0  0  1  1 
wheelchairs 
Walkers and related 
0  0  1  1 
accessories 
Complex power 
0  0  0  0 
rehabilitation wheelchairs 
Source:  OIG analysis of survey responses from 214 physicians, 2012. 
Note:  Physicians are represented in more than one product category because physicians could receive requests for 
brand changes for multiple product categories. 
 
 
   
Limited Supplier Solicitation of Prescribing Physicians Under DMEPOS Competitive Bidding (OEI-06-11-00081)             15     
Table B-3:  Number of Physicians in Sample Who Received Requests for 
Brand Changes, by Frequency of Requests (n = 33) 
Stratum 3:   
Stratum 1:   Stratum 2:    Total Number   
Frequency of Requests  90 or more 
519 items  2089 items  of Physicians 
items 
Rarely or occasionally  7  7  11  25 
Often or very often  1  2  6  9 
Source:  OIG analysis of survey responses from 214 physicians, 2012. 
Note:  Physicians are represented in more than one frequency category because physicians could receive requests for 
brand changes for multiple product categories. 
 
Table B-4:  Number of Physicians in Sample Who Received Requests for 
Brand Changes, by Supplier Reasons for Requests (n = 33) 
Stratum 3:   
Stratum 1:   Stratum 2:    Total Number   
Reason  90 or more 
519 items  2089 items  of Physicians 
items 
Supplier did not carry the 
3  4  9  16 
brand 
Supplier believed patient 
would be better served by  4  1  7  12 
another brand 
Patient asked supplier for 
3  3  5  11 
a different brand 
Brand not in stock  1  2  5  8 
Other  4  4  4  12 
No reason given  0  4  4  8 
Source:  OIG analysis of survey responses from 214 physicians, 2012. 
Note:  Physicians are represented in more than one reason category because physicians could select multiple reasons 
for prescribing a specific brand of product. 
 
Table B-5:  Number of Physicians in Sample Who Received Requests for 
Brand Changes, by Physician Response to Requests (n = 33) 
Stratum 3:   
Stratum 1:   Stratum 2:    Total Number   
Response  90 or more 
519 items  2089 items  of Physicians 
items 
Approved requested 
8  5  11  24 
change 
Did not approve the 
0  3  5  8 
requested change 
Other  2  1  2  5 
Source:  OIG analysis of survey responses from 214 physicians, 2012. 
Note:  Physicians are represented in more than one response category because physicians could receive requests for 
brand changes for multiple product categories. 
 
Table B-6:  Number of Physicians in Sample, by Reasons for Prescribing 
Mode of Delivery (n = 151) 
Stratum 3:   
Stratum 1:   Stratum 2:    Total Number   
Reason  90 or more 
519 items  2089 items  of Physicians 
items 
Following the standard of 
30  39  50  119 
care 
Better patient compliance  21  33  43  97 
Patient request  13  26  32  71 
Other  8  5  12  25 
Source:  OIG analysis of survey responses from 214 physicians, 2012. 
Note:  Physicians are represented in more than one reason category because physicians could select multiple reasons 
for prescribing a mode of delivery. 
Limited Supplier Solicitation of Prescribing Physicians Under DMEPOS Competitive Bidding (OEI-06-11-00081)             16     
Table B-7:  Number of Physicians in Sample Who Received Requests to 
Change Mode of Delivery, by Product Category (n = 32) 
Stratum 3:   
Stratum 1:   Stratum 2:    Total Number   
Product Category  90 or more 
519 items  2089 items  of Physicians 
items 
Oxygen, oxygen 
9  9  13  31 
equipment, and supplies 
Enteral nutrients, 
1  1  1  3 
equipment, and supplies 
Source:  OIG analysis of survey responses from 214 physicians, 2012. 
Note:  Physicians are represented in more than one product category because physicians could receive requests for 
changes in mode of delivery for multiple product categories. 
 
Table B-8:  Number of Physicians in Sample Who Received Requests to 
Change Mode of Delivery, by Frequency of Requests (n = 32) 
Stratum 3:   
Stratum 1:   Stratum 2:    Total Number   
Response  90 or more 
519 items  2089 items  of Physicians 
items 
Rarely or occasionally  9  10  13  32 
Often or very often  0  0  0  0 
Source:  OIG analysis of survey responses from 214 physicians, 2012. 
Note:  Physicians are represented in more than one response category because physicians could receive requests for 
changes in mode of delivery for multiple product categories. 
 
Table B-9:  Number of Physicians in Sample Who Received Requests to 
Change Mode of Delivery, by Suppliers Reasons for Requests (n = 32) 
Stratum 3:   
Stratum 1:   Stratum 2:    Total Number   
Reason  90 or more 
519 items  2089 items  of Physicians 
items 
Supplier believed patient 
would be better served by  7  10  9  26 
another mode of delivery 
Patient asked supplier for 
6  5  8  19 
different mode of delivery 
Item not in stock  1  2  2  5 
Other  0  0  3  3 
No reason given   1  0  0  1 
Source:  OIG analysis of survey responses from 214 physicians, 2012. 
Note:  Physicians are represented in more than one reason category because physicians could select multiple reasons 
for prescribing a mode of delivery. 
 
Table B-10:  Number of Physicians in Sample Who Received Requests to 
Change Mode of Delivery, by Physician Response to Requests (n = 32) 
Stratum 3:   
Stratum 1:   Stratum 2:    Total Number   
Response  90 or more 
519 items  2089 items  of Physicians 
items 
Made the requested 
9  10  10  29 
change 
Did not make the 
0  0  1  1 
requested change 
Other  1  0  2  3 
Source:  OIG analysis of survey responses from 214 physicians, 2012. 
Note:  Physicians are represented in more than one response category because physicians could receive requests for 
changes in mode of delivery for multiple product categories. 
 
   
Limited Supplier Solicitation of Prescribing Physicians Under DMEPOS Competitive Bidding (OEI-06-11-00081)             17     
ACKNOWLEDGMENTS 
This report was prepared under the direction of Kevin Golladay, Regional 
Inspector General for Evaluation and Inspections in the Dallas regional 
office; Blaine Collins, Deputy Regional Inspector General; and 
Ruth Ann Dorrill, Deputy Regional Inspector General.   
Tom Browning served as the team leader, and Jennifer Gist served as the 
lead analyst.  Other principal Office of Evaluation and Inspections staff 
from the Dallas regional office who conducted the study include 
Maria Balderas, Meghan Champney, Michael Gates, and Malinda Hicks.  
Central office staff who provided support include Kevin Farber, 
Althea Hosein, Jennifer Jones, Scott Manley, Christine Moritz, and 
Debra Roush.   
Limited Supplier Solicitation of Prescribing Physicians Under DMEPOS Competitive Bidding (OEI-06-11-00081)             18   
   
Office of Inspector General 
http://oig.hhs.gov 
 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as 
amended, is to protect the integrity of the Department of Health and Human Services 
(HHS) programs, as well as the health and welfare of beneficiaries served by those 
programs.  This statutory mission is carried out through a nationwide network of audits, 
investigations, and inspections conducted by the following operating components: 
Office of Audit Services 
The Office of Audit Services (OAS) provides auditing services for HHS, either by conducting 
audits with its own audit resources or by overseeing audit work done by others.  Audits 
examine the performance of HHS programs and/or its grantees and contractors in carrying 
out their respective responsibilities and are intended to provide independent assessments of 
HHS programs and operations.  These assessments help reduce waste, abuse, and 
mismanagement and promote economy and efficiency throughout HHS. 
Office of Evaluation and Inspections 
The Office of Evaluation and Inspections (OEI) conducts national evaluations to provide 
HHS, Congress, and the public with timely, useful, and reliable information on significant 
issues.  These evaluations focus on preventing fraud, waste, or abuse and promoting 
economy, efficiency, and effectiveness of departmental programs.  To promote impact, OEI 
reports also present practical recommendations for improving program operations.  
Office of Investigations 
The Office of Investigations (OI) conducts criminal, civil, and administrative investigations 
of fraud and misconduct related to HHS programs, operations, and beneficiaries.  With 
investigators working in all 50 States and the District of Columbia, OI utilizes its resources 
by actively coordinating with the Department of Justice and other Federal, State, and local 
law enforcement authorities.  The investigative efforts of OI often lead to criminal 
convictions, administrative sanctions, and/or civil monetary penalties. 
Office of Counsel to the Inspector General 
The Office of Counsel to the Inspector General (OCIG) provides general legal services to 
OIG, rendering advice and opinions on HHS programs and operations and providing all 
legal support for OIGs internal operations.  OCIG represents OIG in all civil and 
administrative fraud and abuse cases involving HHS programs, including False Claims Act, 
program exclusion, and civil monetary penalty cases.  In connection with these cases, OCIG 
also negotiates and monitors corporate integrity agreements.  OCIG renders advisory 
opinions, issues compliance program guidance, publishes fraud alerts, and provides other 
guidance to the health care industry concerning the anti-kickback statute and other OIG 
enforcement authorities.