HHS OIG Data Brief  June 2017  OEI-04-16-00473 
 
Medicare Market Shares of Mail-Order Diabetes Test Strips 
From October Through December 2016 
 
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) required 
the Centers for Medicare & Medicaid Services (CMS) to phase in a Competitive Bidding Program 
for durable medical equipment, prosthetics, orthotics, and supplies.  In July 2013, the program was 
expanded to include a National Mail-Order Program for diabetes testing supplies. 
 
The Medicare Improvements for Patients and Providers Act 
RESULTS AT A GLANCE 
(MIPPA) prohibits CMS from awarding a contract to 
a supplier of diabetes test strips if the suppliers bid does not 
OIG analyzed the types of  cover at least 50 percent, by volume, of all types of diabetes 
strips provided under the  test strips on the market.  (This is known as the MIPPA 
National Mail-Order  50-percent rule.)  MIPPA requires the Office of Inspector 
Program from October  General (OIG) to determine the market shares of the types of 
through December 2016.  
diabetes test strips before each round of competitive bidding.   
This report supplements 
 
two previous OIG reports 
On July 1, 2016, CMS began accepting claims for the current 
about the types of strips 
round of the National Mail-Order Program, which ends on 
provided to beneficiaries 
December 31, 2018.  This is the third of three OIG reports on 
under this program.  We 
the Medicare market shares of diabetes test strips in 2016.  
found that during this 
timeframe:   CMS will use the results from the second OIG report  
(OEI-04-16-00471, February 2017) to determine bidders 
 Sampled suppliers 
adherence with the MIPPA 50-percent rule for the next round 
submitted claims for 
of competitive bidding.  
19 types of mail-order 
diabetes test strips.   
The first and third reports provide CMS with additional 
 The top two strip types 
information on the market shares of diabetes test strips 
accounted for 
provided by the National Mail-Order Program.  OIG will 
53 percent of the 
Medicare mail-order  complete future evaluations as mandated by MIPPA or, if 
market.  appropriate, as requested by CMS.    
 
 The top 10 strip types 
See Appendix A for information on diabetes, Medicares 
accounted for 
97.5 percent of the  coverage of diabetes test strips, the Competitive Bidding 
Medicare mail-order  Program, and the National Mail-Order Program.  See 
market.   Appendix B for an overview of completed OIG work on this 
  topic. 
 
    RESULTS 
Sampled suppliers provided 19 types of diabetes test strips 
to Medicare beneficiaries via mail order; 2 types of test strips 
accounted for 53 percent of the mail-order market 
 
Our representative sample included 19 types of diabetes test strips provided to Medicare 
beneficiaries in months 4 through 6October through December 2016of the current round of 
the National Mail-Order Program.  Two types of diabetes test strips accounted for 53 percent of 
the Medicare mail-order market.  Five types of diabetes test strips accounted for 81.5 percent of 
the market, and 10 types accounted for 97.5 percent.  
 
Exhibit 1 lists the top 10 types (model and manufacturer) of mail-order diabetes test strips 
associated with Medicare claims for the 3-month period of October through December 2016.  
See Appendix C for a complete alphabetical listing of all 19 strip types.  Appendix C also 
provides the model, manufacturer, and market share for each type of diabetes test strip provided. 
 
Exhibit 1:  Top 10* Mail-Order Diabetes Test Strip Types Associated With Medicare 
Claims for the 3-Month Period of October Through December 2016 
Model  Manufacturer  Market Share 
Prodigy   Prodigy Diabetes Care  30.6% 
TRUEmetrix  Trividia Health, Inc.  22.2% 
Embrace  Omnis Health  12.9% 
CareSens N  i-Sens, Inc.  8.8% 
OneTouch Ultra  LifeScan, Inc.  6.9% 
Advocate Redi-Code+  BroadMaster Bio-Tech Corp.  6.2% 
CONTOUR  Panasonic Healthcare Holdings Co., Ltd.  2.4% 
Gmate  Philosys  2.3% 
On Call Plus  ACON Laboratories  2.2% 
On Call Express*   ACON Laboratories   1.5%  
Rightest GS 300*  Bionime Corporation  1.5% 
     Total**    97.5% 
Source:  OIG analysis of supplier documentation and Medicare claims containing Healthcare Common Procedure Coding 
System (HCPCS) code A4253 KL for the 3-month period of October through December 2016.   
* This list of the top 10 strip types consists of 11 types, because the last 2 strip typesOn Call Express and Rightest GS 300
tied for the 10th-highest market share.  If only 1 of these 2 strip types were to be included among the top 10, the market share for 
the top 10 strip types would be 96.0%, with a 95% confidence interval of 94.7%97.1%. 
** Totals do not sum to 100 percent because these strip types are only the top 10 types, not a list of all strip types provided. 
 
 
 
 
 
2 
  CONCLUSION 
This report provides CMS with information on the types of diabetes test strips provided to 
beneficiaries for months 4 through 6October through December 2016of the current round of 
the National Mail-Order Program.  We found that during this timeframe, sampled suppliers 
provided 19 types of diabetes test strips via mail order.  The top two strips accounted for about 
half of the mail-order market, and the top 10 types accounted for almost all of the mail-order 
market.   
 
On July 1, 2016, CMS began accepting claims for the current round of the National Mail-Order 
Program, which ends on December 31, 2018.  This is the third of three OIG reports to determine 
the Medicare market shares of diabetes test strips for the periods April through June 2016,  
July through September 2016, and October through December 2016, respectively.  CMS will use 
the results from the second OIG report (OEI-04-16-00471, February 2017) to determine bidders 
adherence with the MIPPA 50-percent rule for the next round of competitive bidding.  As 
requested by CMS, the first and third reports provide additional information on the market shares 
of diabetes test strips supplied through the National Mail-Order Program. 
 
See Appendix B for an overview of OIGs completed work on this topic.  OIG will conduct 
future reviews of the market shares of the various types of mail-order diabetes test strips as 
required by MIPPA and/or, if appropriate, as requested by CMS. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3 
   
 
 
METHODOLOGY 
Data Collection 
Using CMSs National Claims History file, we identified the population of Medicare Part B 
claims for diabetes test strips that were provided by mail order and had dates of service that 
started between October 1, 2016, and December 31, 2016.  There were 438,872 claims during 
this period.  We then selected a simple random sample of 1,210 of these 438,872 claims.  These 
1,210 claims in the sample corresponded to a total of 12 suppliers.  These 12 suppliers accounted 
for 438,763 claimsor 99.98 percentof the population of claims from which we selected the 
sample.   
 
To identify the beneficiaries associated with each claim in our sample, we matched the 
beneficiary numbers in the claims with beneficiary numbers in the CMS Beneficiary Enrollment 
Database.  We sent documentation requests to the 12 suppliers associated with our sampled 
claims.  For each claim, we asked the supplier to (1) indicate the type (model and manufacturer) 
of diabetes test strips it provided to the Medicare beneficiary we identified and (2) submit 
relevant documentation (such as packing slips or invoices) for the strips.  We received responses 
from all 12 suppliers documenting all 1,210 claims in our sample, a 100-percent response rate for 
these claims.   
 
Data Analysis 
We reviewed claims data, supplier responses, and supplier documentation to determine the 
quantity and type of mail-order diabetes test strips associated with each claim in our sample.  
Each claim in our sample contained between 1 and 16 boxes, and data for the 1,210 claims 
provide information for a total of 4,937 boxes of strips.   
 
We categorized types of diabetes test strips by model and manufacturer.  We calculated each 
strip types share of the Medicare mail-order market by determining the total number of 50-count 
boxes of each strip type provided to beneficiaries in our sample and dividing that number by the 
total number of boxes across all strip types in our sample.  To estimate the Medicare market 
share of each type of diabetes test strip provided by mail order, we projected our sample data to 
the population of diabetes test strips provided by mail order during the timeframe we reviewed.  
In our findings, we present the market share for the top 10 types of diabetes test strips to the first 
decimal.  See Appendix C for the market shares of the 19 strip types in our sample.   
 
Limitations  
Suppliers have 1 year to submit claims to CMS.  Our study did not include any claims submitted 
after February 1, 2017, the date we collected our Medicare claims data.  Therefore, our sample 
may not include all types of mail-order diabetes test strips reimbursed by Medicare. 
 
Standards  
This review was conducted in accordance with the Quality Standards for Inspections approved 
   
by the Council of the Inspectors General on Integrity and Efficiency.
4 
  APPENDIX A 
Information on Diabetes, Medicares Coverage of Diabetes Test Strips, the 
Competitive Bidding Program, and the National Mail-Order Program 
 
Diabetes and Blood Glucose Monitoring.  Diabetes is a chronic disease in which a person has a 
high blood sugar (glucose) level either because the body does not produce enough insulin, or 
because cells do not respond properly to the insulin the body does produce.1   Diabetes may be 
managed through a variety of methods, including healthy eating, physical activity, and insulin 
injections to prevent medical complications (e.g., hypoglycemia or cardiovascular disease).2   
 
A person with diabetes can use a hand-held meter to test the concentration of glucose in his or 
her blood.  To do so, the individual pricks his or her skin with a lancet and places the resulting 
drop of blood on a diabetes test strip, which is a small piece of plastic meant for one-time use.  
The individual then inserts the strip into a meter that reads the blood samples glucose level, 
providing information necessary for the individual to manage his or her diabetes.  People with 
diabetes may need to perform glucose tests several times a day to assist them in maintaining an 
appropriate glucose level. 
 
Medicare Coverage of Diabetes Test Strips.  Medicare covers testing supplies, such as diabetes 
test strips, to help beneficiaries with diabetes manage their condition.3  To be eligible for 
Medicare coverage of diabetes test strips, Medicare beneficiaries with diabetes must be under the 
treatment of a physician for the condition.  The physicians order for diabetes test strips specifies 
the frequency at which the beneficiary should use the strips.  Each box contains 50 strips.  
Because some beneficiaries need to test their glucose levels more frequently than others, the 
number of boxes per claim varies.4   
 
For each beneficiary, the supplier submits a single claim that can cover up to 3 months of 
diabetes test strips.  The claim indicates the number of boxes provided to the beneficiary for the 
applicable time period, but it does not indicate the type of strips provided.  The modifier KL 
designates diabetes test strips provided via mail order.5   
 
Purchasing Diabetes Test Strips.  Medicare beneficiaries may purchase their diabetes test strips 
via mail order suppliers or via non-mail-order purchases from local pharmacies or supplier 
storefronts.  CMS considers all diabetes test strips that are either shipped or delivered to a 
beneficiarys residence as mail order, regardless of the method of delivery.6  Non-mail-order 
diabetes test strips are those that a beneficiary or caregiver picks up in person at a local 
pharmacy or supplier storefront.  For both mail-order and non-mail-order purchases, Medicare 
pays 80 percent of allowed charges for diabetes test strips, and the beneficiary is responsible for 
the remaining 20 percent.    
 
Competitive Bidding Program.  The MMA requires CMS to phase in, through several rounds of 
bidding, a Competitive Bidding Program for selected DMEPOS items (including diabetes test 
strips).7  The program includes high-cost and high-volume items or those with significant savings 
potential.  Suppliers submit bids that CMS evaluates based on the suppliers eligibility, their 
financial stability, and the bid price.  Generally, CMS awards contracts to the suppliers that offer 
lower bid prices and meet applicable quality standards and financial standards.  The payment 
5 
  amounts resulting from winning bids replace the Medicare fee-schedule amounts for the selected 
items.  Generally, contract awards and payment amounts expire every 3 years, and suppliers 
must recompete to remain contract suppliers.8 
 
MIPPA further qualified the competition for diabetes test strips.  MIPPA requires that in rounds 
subsequent to the first round, mail-order suppliers demonstrate in their bids that they can provide 
at least 50 percent, by volume, of the types of diabetes test strips provided to Medicare 
beneficiaries.  Suppliers do this by declaring in their bids the types of diabetes test strips they 
intend to provide.  The MIPPA 50-percent rule did not apply to suppliers bids in Round 1 or the 
Round 1 Rebid described below.9 
 
Round 1 of the Competitive Bidding Program and the Round 1 Rebid.  Contracts between CMS 
and suppliers became effective in 10 selected Competitive Bidding Areas (CBAs) on July 1, 
2008.10 
 
Two weeks after the Round 1 contracts between CMS and suppliers became effective, Congress 
enacted MIPPA, which mandated that CMS enact the following changes to the Competitive 
Bidding Program: 
 
  terminate contracts awarded to suppliers in Round 1; 
  repeat the Round 1 competition in 2009; and 
  institute the MIPPA 50-percent requirement for mail-order diabetes test strips in all 
rounds following the repeat of the Round 1 competition.11  
 
The repeat of the Round 1 competition is known as the Round 1 Rebid.  The Round 1 Rebid was 
in nine CBAs (the same areas as in Round 1, but this time excluding Puerto Rico).12  The 
competition for contracts in the Round 1 Rebid began in October 2009, and suppliers began 
providing competitively bid DMEPOS items to beneficiaries in the nine selected CBAs on 
January 1, 2011.13  This round ended in December 2013, with competitions for mail-order 
diabetes testing supplies expiring on December 31, 2012, in these areas.  Subsequent rounds 
include implementation of the Round 1 Recompete (January 2014 through December 2016) for 
the 9 selected CBAs and Round 1 2017 (January 2017 through December 2018) for 13 selected 
CBAs.14 
 
Before 2011, Medicare reimbursed all suppliers of diabetes test strips on the basis of 
fee-schedule amounts that were updated annually and varied by State.  As a result of the Round 1 
Rebid, the average Medicare payment for 2011 mail-order diabetes test strips provided to 
beneficiaries in CBAs was $14.62 per 50-count box.15  In contrast, the national average Medicare 
payment for mail-order strips in non-CBA areas was $32.47, and the national average payment 
for non-mail-order diabetes test strips was $37.67.16  CMS reported that the first round of the 
Competitive Bidding Program saved Medicare $51.3 million for diabetes supplies provided via 
mail order.17  
 
Round 2 of the Competitive Bidding Program and Start of the National Mail-Order Program.  
MIPPA required competition for Round 2 of the Competitive Bidding Program to occur in 
70 additional Metropolitan Statistical Areas (MSAs) and authorized the National Mail-Order 
6 
  Program.18  The Patient Protection and Affordable Care Act (ACA) further expanded the number 
of MSAs to 91, resulting in 100 CBAs, and required CMS to either expand the DMEPOS 
Competitive Bidding Program nationwide or adjust payment rates using competitively bid rates 
by 2016.19  Round 2 of the Competitive Bidding Program and the initial round of the National 
Mail-Order Program began on July 1, 2013, and ended on June 30, 2016.  In accordance with the 
requirement to equalize Medicare payments for diabetic testing supplies set out by the American 
Taxpayer Relief Act of 2012 (ATRA), CMS set a single payment amount at $10.41 per box of 
diabetes test stripsboth for those obtained via mail order and those obtained by other means.20 
CMS reported that Medicare saved approximately $3.6 billion during the first 2 years of the 
DMEPOS contracts (i.e., from July 1, 2013, to June 30, 2015) after the start of Round 2 of the 
Competitive Bidding Program.21  
 
Start of the Round 2 Recompete of the Competitive Bidding Program and the National 
Mail-Order Recompete.  On July 15, 2014, CMS announced that it would conduct a 
recompetition of contracts that had been awarded in Round 2 of the Competitive Bidding 
Program and the National Mail-Order Program. This recompetition is known as the Round 2 
Recompete and the National Mail-Order Recompete.  The Round 2 Recompete and the National 
Mail-Order Recompete occurred in the same geographical locations as the previous round; 
however, CMS expanded the number of CBAs from 100 to 117.22  Contracts for the Round 2 
Recompete and National Mail-Order Recompete became effective on July 1, 2016, and will 
expire on December 31, 2018.23  Under this program, diabetes test strips are again reimbursed at 
the same competitive bidding payment rate whether they are provided by mail order or by other 
means, and this rate was reduced to $8.32 per 50-count box.24  See Exhibit A on the next page 
for a timeline of the Competitive Bidding Program and National Mail-Order Program. 
 
7 
  Exhibit A: Timeline of the Competitive Bidding Program and the National Mail-Order Program 
Competitive Bidding Program Round 1 
 
 
Competitive Bidding  Competitive Bidding  Competitive Bidding  Competitive Bidding 
Program  Program  Program Program 
Round 1 Round 1 Rebid Round 1 Recompete Round 1 2017
Contracts implemented  Contracts implemented  Contracts implemented  Contracts to be 
July 1, 2008July 15,  January 1, 2011 January 1, 2014 implemented      
2008. December 31, 2013. December 31, 2016. January 1, 2017
Bidding in 10 areas for  Bidding in 9 areas for  Bidding in 9 areas. December 31, 2018.
select DMEPOS  select DMEPOS  Bidding in the same 
including mail-order  including mail-order  areas as in the Round 1 
diabetes test strips  DTS.  (Mail-order DTS  Recompete. 
(DTS). contracts ended 
December 2012. DTS 
bidding then moved to 
Round 2 as part of the 
National Mail-Order 
Program.)
 
Competitive Bidding Program Round 2 
          
  
Competitive Bidding Program  Competitive Bidding Program 
Round 2 and the National  Round 2 Recompete and the 
Mail-Order Program National Mail-Order 
Recompete
Contracts implemented    Contracts implemented   
July 1, 2013June 30, 2016. July 1, 2016
Bidding in 100 areas with  December 31, 2018.
the addition of the National  Bidding in 117 areas with 
Mail-Order Program for  revised boundaries and the 
mail-order DTS. continuation of the National 
Mail-Order Program.
 
8 
  APPENDIX B 
OIGs Past and Current Work on Medicare Diabetes Test Strips Market Share 
MIPPA section 154(d)(3)(B) requires OIG to determine the market shares of types of diabetes 
test strips provided by mail order in the Competitive Bidding Program before each new round of 
bidding.  For Round 2, CMS requested that OIG complete an additional report for the 3-month 
period before implementation of a new round and another report for months 4 through 6 after 
implementation of a new round.  CMS requested these additional reports to evaluate the effect of 
the National Mail-Order Program on the types of diabetes test strips provided to beneficiaries.  
For the current Round 2 Recompete, CMS has again requested this series of reports.  See 
Exhibit B-1 for a timeline of OIG work on the Medicare market shares of diabetes test strips. 
 
Exhibit B-1: OIG Work on the Medicare Market Shares of Diabetes Test Strips  
 
Completed Before Round 2 (Contract Period January 1, 2011, to December 31, 2013) 
Report number: OEI-04-10-00130
Release Date 
Mandated by MIPPA (to help evaluate bids for July 2013 implementation)
Time period covered: October through December 2009
December 2010 
Results: 75 total typestop 7 types had a 50% share of the market; top 10 types had 62%
 
Completed Before Round 2 Recompete (Contract Period July 1, 2016, to December 31, 2018) 
Report number: OEI-04-13-00680
Release Date 
Mandated by MIPPA (to help evaluate bids for July 2016 implementation)
Time period covered: July through September 2013
June 2014 
Results: 43 total typestop 3 types had a 59% share of the market; top 10 types had 90%
Report number: OEI-04-13-00681
Release Date 
Requested by CMS for additional information
Time period covered: April through June 2013
June 2014 
Results: 62 total typestop 4 types had a 51% share of the market; top 10 types had 75%
Report number: OEI-04-13-00682
Release Date 
Requested by CMS for additional information
Time period covered: October through December 2013
November 2014 
Results: 41 total typestop 3 types had a 58% share of the market; top 10 types had 91%
 
Completed Before Next Round (Current Contracts Expire December 31, 2018) 
Report number: OEI-04-16-00470
Release Date  Requested by CMS for additional information
Time period covered: April through June 2016
November 2016 
Results: 30 total typestop 2 types had a 51% share of the market; top 10 types had 93%
Report number: OEI-04-16-00471
Release Date 
Mandated by MIPPA (to help evaluate bids for the post-December 2018 implementation) 
Time period covered: July through September 2016
February 2017 
Results: 18 total typestop 2 types had a 60% share of the market; top 10 types had 98%
Report number: OEI-04-16-00473
Release Date  Requested by CMS for additional information
Time period covered: October through December 2016
May 2017 
Results: 19 total typestop 2 types had a 53% share of the market; top 10 types had 97.5%
 
 
9 
  APPENDIX C 
Exhibit C-1:  Model, Manufacturer, and Market Share Estimates for Mail-Order 
Diabetes Test Strips, October Through December 2016  
 
Model  Manufacturer  Market  95-Percent  
Share  Confidence Interval  
Advocate Redi-Code+  BroadMaster Bio-Tech Corp.  6.22%  4.857.94% 
CareSens N  i-Sens, Inc.  8.81%  7.1210.85% 
Clever Choice  Simple Diagnostics  0.04%  0.010.29% 
CONTOUR  Panasonic Healthcare Holdings Co., Ltd.  2.41%  1.613.58% 
CONTOUR NEXT  Panasonic Healthcare Holdings Co., Ltd.  0.20%  0.060.74% 
Easy Talk  Home Aide Diagnostics  0.51%  0.211.20% 
EASYMax  Oak Tree International Holdings, Inc.  1.07%  0.591.95% 
Embrace  Omnis Health  12.94%  10.9315.26% 
GlucoCard Expression  ARKRAY  0.32%  0.110.97% 
GlucoCard Vital  ARKRAY  0.04%  0.010.29% 
Gmate  Philosys  2.27%  1.523.36% 
NovaMax  Nova Biomedical  0.04%  0.010.29% 
On Call Express  ACON Laboratories  1.46%  0.872.45% 
On Call Plus  ACON Laboratories  2.23%  1.353.67% 
OneTouch Ultra  LifeScan, Inc.  6.89%  5.348.84% 
Prodigy  Prodigy Diabetes Care  30.59%  27.5633.61% 
Rightest GS 300  Bionime Corporation  1.46%  0.872.43% 
TRUEmetrix  Trividia Health, Inc.  22.22%  19.6924.97% 
Unistrip1  Unistrip Technologies, LLC  0.28%  0.120.66% 
   Total    100.00%   
Source:  OIG analysis of supplier documentation and Medicare claims containing HCPCS code A4253 KL for the 3-month period 
of October through December 2016. 
 
 
   
10 
  Exhibit C-2.  Medicare Market Share Estimates for Top 2, Top 5, and Top 10* 
 
Types of Mail-Order Diabetes Test Strips, October Through December 2016
Groupings of Strip Types  Combined  95-Percent  
Model Names 
with Largest Market Share   Market Share  Confidence Interval  
Prodigy 
  Top 2 Strip Types  52.81%  49.5656.05% 
TRUEmetrix 
Prodigy 
TRUEMetrix 
  Top 5 Strip Types  Embrace   81.45%  78.8283.81% 
CareSens N 
OneTouch Ultra 
Prodigy 
TRUEMetrix 
Embrace  
CareSens N 
OneTouch Ultra 
  Top 10* Strip Types  Advocate Redi-Code+  97.49%  96.3798.27% 
CONTOUR  
Gmate 
On Call Plus 
On Call Express  
Rightest GS300 
Source:  OIG analysis of supplier documentation and Medicare claims containing HCPCS code A4253 KL for the 3-month 
period of October through December 2016. 
*There are 11 strip types in the top 10 because the last 2 strip types tied for the 10th-highest market share.  If only 1 of 
these 2 strip types were to be included among the top 10, the market share for the top 10 strip types would be 96.0%, 
with a 95% confidence interval of 94.7%97.1%. 
 
 
 
 
 
 
 
 
 
   
11 
  ACKNOWLEDGMENTS 
 
This report was prepared under the direction of Dwayne Grant, Regional Inspector General for 
Evaluation and Inspections in the Atlanta regional office, and Jaime Stewart, Deputy Regional 
Inspector General.   
 
Office of Evaluation and Inspections staff from the Atlanta regional office who conducted the 
study include Lauren Buss, Lori Jouty, and Lucio Verani.  Office of Evaluation and Inspections 
staff who provided support include Joe Chiarenzelli, Kevin Farber, and Christine Moritz. 
   
12 
  ENDNOTES 
 
 
1 National Institutes of Health (NIH), Causes of Diabetes.  Accessed at https://www.niddk.nih.gov/health-
information/diabetes/causes on November 3, 2016. 
2 NIH, Managing Diabetes: 4 Steps to Manage Your Diabetes for Life.  Accessed at 
https://www.niddk.nih.gov/health-information/diabetes/manage-monitoring-diabetes on November 3, 2016. 
3 Other diabetes testing supplies may include batteries, lancets, and control solution. 
4 CMS, MLN Matters Number SE1008 Revised.  Medicare Coverage of Blood Glucose Monitors and Testing 
Supplies.  Accessed at http://www.cms.gov/MLNMattersArticles/downloads/SE1008.pdf on July 1, 2016.  Medicare 
covers up to 100 test strips per month (i.e., two 50-count boxes) for insulin-dependent beneficiaries with diabetes 
and up to 100 test strips every 3 months for non-insulin-dependent beneficiaries with diabetes.  Medicare allows 
additional test strips if they are deemed medically necessary and documented in physician records.  Medicare LCD 
for Glucose Monitors (L33822 for DME MAC Jurisdictions A, B, C, and D). 
5 Suppliers submit claims using Healthcare Common Procedure Coding System (HCPCS) codes to receive Medicare 
reimbursement.  Medicare claims for diabetes test strips are billed using HCPCS code A4253.  For diabetes test 
strips provided by mail order, the HCPCS code A4253 must be followed by the KL modifier (A4253 KL).  CMS, 
Medicare Claims Processing Manual, Pub. No. 100-04, ch. 36,  20.5.4.1 and 50.6.  A modifier is a code on 
Medicare claim that further describes the services performed or supplies provided to a beneficiary. 
6 42 CFR  414.402 (defining mail-order item). 
7 MMA, P.L. No. 108-173  302(b)(1). 
8 CMS must recompete contracts at least once every 3 years.  Social Security Act,  1847(b)(3)(B), 42 U.S.C. 
 1395w-3(b)(3)(B). 
9 MIPPA, P. L. No. 110-275  154(d)(3)(B) (adding new paragraph Social Security Act,  1847(b)(10)(A), 
42 U.S.C.  1395w-3(b)(10)(A)). 
10 The CBAs define the geographic coverage areas of the program according to specific ZIP Codes.  A CBA that is 
identified with a specific Metropolitan Statistical Areas (MSA) may be concurrent with, larger than, or smaller than 
the related MSA.  CMS, Medicare Claims Processing Manual, Pub. No. 100-04, ch. 36,  20.2.  The 10 CBAs in 
Round 1 were CharlotteGastoniaConcord (North Carolina and South Carolina), CincinnatiMiddletown (Ohio, 
Kentucky, and Indiana), ClevelandElyriaMentor (Ohio), DallasFort WorthArlington (Texas), Kansas City 
(Missouri and Kansas), MiamiFort Lauderdale Pompano Beach (Florida), OrlandoKissimmee (Florida), 
Pittsburgh (Pennsylvania), Riverside San BernardinoOntario (California), and San Juan-Caguas-Guaynabo, 
Puerto Rico.  CMS, MLN Matters Number MM6112 Revised.  Payment for Complex Rehabilitative Power Mobility 
(PMD) Services that Span the Implementation Dates of DMEPOS Competitive Bidding Programs in Competitive 
Bidding Areas.  Accessed at https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-
MLN/MLNMattersArticles/downloads/MM6112.pdf on November 16, 2016. 
11 MIPPA, P.L. No. 110-275  154(a)(1) and (d)(3)(B).   
12 Competitive Bidding Areas (CBAs).  Accessed at http://dmecompetitivebid.com/Palmetto/Cbic.Nsf/files/ 
Fact_Sheet_Competitive_Bidding_Areas.pdf/$File/Fact_Sheet_Competitive_Bidding_Areas.pdf on November 16, 
2016. 
13 CMS, Important Dates, Round 1 Rebid Timeline.  Accessed at http://dmecompetitivebid.com/palmetto/ 
cbicrd1rebid.nsf/docsCat/Round%201%20Rebid~Important%20Dates~Timeline?open&expand=1&navmenu=Impo
rtant^Dates| on November 16, 2016. 
14 The 13 selected CBAs included in Round 1 2017 are composed of the same 9 areas included in the Round 1 
Recompete.  However, CBAs were defined so that there would be no multi-State CBAs.  For example, the single 
CBA of Kansas City, MO-KS in the Round 1 Recompete was changed to two separate CBAs in Round 1 2017, 
one in Kansas and the other in Missouri.  As a result, the number of CBAs increased to 13 for Round 1 2017.  CMS, 
Facts About the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS), Competitive Bidding 
Program, Round 1 2017: Competitive Bidding Areas.  Accessed at http://www.dmecompetitivebid.com/Palmetto/
Cbicrd12017.Nsf/files/14_Fact_Sheet_Competitive_Bidding_Areas.pdf/$File/14_Fact_Sheet_Competitive_Bidding
_Areas.pdf  on April 28, 2017. 
15 Palmetto GBA and CMS, Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS), 
Competitive Bidding Program  Round 1 Rebid: Single Payment Amounts Per CBA.  Accessed at 
https://dmecompetitivebid.com/palmetto/cbicrd1rebid.nsf/files/SPA_All_Product_Categories.pdf/$FIle/SPA_All_Pr
oduct_Categories.pdf on May 5, 2017. 
 
13 
   
16 CMS, Durable Medical Equipment, Prosthetics/Orthotics, and Supplies Fee Schedule: Details for title: 
DME11_C.  Accessed at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/DMEPOSFeeSched/
DMEPOS-Fee-Schedule-Items/CMS1248611.html?DLPage=3&DLEntries=10&DLSort=2&DLSortDir=descending 
on May 2, 2017. 
17 CMS, Competitive Bidding UpdateOne Year Implementation Update. April 17, 2012  Accessed at 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/DMEPOSCompetitiveBid/Downloads/ 
Competitive-Bidding-Update-One-Year-Implementation.pdf on May 3, 2017. 
18 MIPPA, P.L. No. 110-275  154(a)(1)(A)((ii) and (iii) (amending Social Security Act,  1847(a)(1)(B)(i)(II) and 
(III), and 42 U.S.C.  1395w-3(a)(1)(B)(i)(II) and (III)).  
19 ACA, P.L. No. 111-148  6410(a)(1) and (b).  The ACA expanded the number of Round 2 MSAs from 70 to 91.   
MIPPA allows for MSAs that have populations over 8 million to be subdivided into multiple CBAs.  Most Round 2 
MSAs contain only one CBA; however, the three largest MSAsChicago, Los Angeles, and New Yorkare 
subdivided into multiple CBAs.  Therefore, there were 100 CBAs in Round 2. CMS, DMEPOS Competitive Bidding 
Program, Round 2 & National Mail-Order.  Accessed at http://dmecompetitivebid.com/palmetto/cbicrd2.nsf/ 
DocsCat/Home on May 8, 2017. 
20 ATRA, P.L. No. 112-240  636 (adding a new subparagraph to Social Security Act,  1834(a)(1)(H), 42 U.S.C. 
 1395m(a)(1)(H)).  CMS, DMEPOS Competitive Bidding Program: Single Payment Amounts, National Mail-Order 
Diabetic Supplies (effective July 1, 2013).  Accessed at http://dmecompetitivebid.com/Palmetto/Cbicrd2.Nsf/ 
files/NMO_SPA_Chart.pdf/$File/NMO_SPA_Chart.pdf on September 23, 2016. 
21 CMS, Competitive Bidding Program Continues to Maintain Access and Quality While Saving Medicare Billions. 
Accessed at https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2016-Fact-sheets-items/2016-03-
15.html on July 11, 2016. 
22 In addition to the three largest MSAs (i.e., Chicago, Los Angeles, and New York) that CMS subdivided into 
multiple CBAs during Round 2, for the Round 2 Recompete, CMS redefined CBAs in multi-State MSAs so that 
there are no multi-State CBAs.  CMS, Round 2 Recompete and National Mail-Order Recompete.  Accessed at 
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/DMEPOSCompetitiveBid/Round-2-Recompete-
and-National-Mail-Order-Recompete/Overview.html on September 23, 2016. 
23 CMS, DMEPOS Competitive Bidding Program.  Accessed at http://www.dmecompetitivebid.com/palmetto/ 
cbicrd2recompete.nsf/vMasterDID/9KJQN52683 on September 20, 2016. 
24 CMS, Public Use File V0817.  Accessed at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-
Payment/DMEPOSFeeSched/DMEPOS-Fee-Schedule-Items/DME16-
C.html?DLPage=1&DLEntries=10&DLSort=2&DLSortDir=descending on June 29, 2016. 
 
 
 
 
 
14