Department of Health and Human Services

OFFICE OF

INSPECTOR GENERAL

IMITED UPPLIER 

SOLICITATION OF PRESCRIBING 

PHYSICIANS UNDER MEDICARE 

DMEPOS COMPETITIVE 

BIDDING PROGRAM

Stuart Wright 

Deputy Inspector General for 

Evaluation and Inspections

December 2012

OEI-06-11-00081

L S
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 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.

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 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.
 

 

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 
 

Limited Supplier Solicitation of Prescribing Physicians Under DMEPOS Competitive Bidding (OEI-06-11-00081) 1 

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 

Letter—Status 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) 2 

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 

beneficiary’s 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 

Program—Program 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 Program—Competitive 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) 3 

• 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 bidder’s 

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 Program—Competitive 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) Application—Getting 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) 4 

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 Bidding—Round 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) 5 

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 Ombudsman’s 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 (January–June 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 CMS’s 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) 6 

To ensure representation of physicians who prescribed different volumes 

of competitive-bid items, we stratified the sample by the physician’s 

volume of claims. The population of physicians in the sample frame 

consisted of: 

• 7,747 physicians who prescribed 5–19 items for 

17,899 beneficiaries (Stratum 1)

• 4,117 physicians who prescribed 20–89 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) 7 

that they were too busy to complete the survey. Table 1 shows survey 

response rates. 

Table 1: Physician Survey Response Rates

Stratum: Number of 

Competitive-bid 

Items Prescribed

Sample Survey 

Respondents Response Rate

1: 5–19 items 98 63 64%

2: 20–89 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) 8 

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 supplies—this 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) 9 

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 13.6–36.4 percent. 
 

Limited Supplier Solicitation of Prescribing Physicians Under DMEPOS Competitive Bidding (OEI-06-11-00081) 10

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 supplier’s not carrying the prescribed brand (16), the 

supplier’s belief that a different brand might be better for the patient (12), 

and the patient’s 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) 11

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 supplier’s belief that the patient would be better served by a 

different mode of delivery (26) and the patient’s 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 

products—especially in helping beneficiaries to locate suppliers that

carried specific brands of diabetic testing supplies—none 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) 12

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 supplier’s belief that a 

change 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 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) 13

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

Analysis Sample Size Point 

Estimate

95-Percent Confidence 

Interval

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 

solicited 94 30.9% 19.1% 42.7%

Physicians who prescribed a specific brand and were not 

solicited 94 69.1% 57.3% 80.9%

Physician Prescribing by Product Category

Physicians who prescribed diabetic supplies 214 82.6% 75.2% 88.5%

Physicians who prescribed enteral nutrients, equipment, 

and supplies 214 41.7% 33.5% 49.9%

Physicians who prescribed continuous positive airway 

pressure (CPAP) devices, respiratory assist devices, and 

related supplies and accessories

214 64.6% 56.5% 72.7%

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, 

and supplies 214 84.7% 77.5% 90.3%

Physicians who prescribed complex rehabilitation power 

wheelchairs 214 26.1% 18.7% 33.5%

Physicians who prescribed walkers and related 

accessories 214 85.9% 79.2% 91.0%

Physicians who prescribed hospital beds and related 

accessories 214 63.7% 55.6% 71.8%

Physician Prescribing of Brand by Product Category

Physicians who prescribed diabetic supplies, specifying 

brand 161 36.1% 27.2% 45.0%

Physicians who prescribed enteral nutrients, equipment, 

and supplies, specifying brand 87 25.0% 13.6% 36.4%

Physicians who prescribed CPAP devices, respiratory 

assist devices, and related supplies and accessories, 

specifying brand

150 13.5% 7.6% 21.7%

Physicians who prescribed standard power wheelchairs, 

specifying brand 138 9.4% 4.1% 17.7%

Physicians who prescribed oxygen, oxygen equipment, 

and supplies, specifying brand 185 4.6% 1.9% 9.1%

Physicians who prescribed walkers and related 

accessories, specifying brand 171 0.7% 0.02% 3.3%

Physicians who prescribed hospital beds and related 

accessories, specifying brand 131 0.3% 0.0001% 3.4%
 

Limited Supplier Solicitation of Prescribing Physicians Under DMEPOS Competitive Bidding (OEI-06-11-00081) 14

 

Table A-1: Point Estimates and Confidence Intervals (continued)

Mode of Delivery Analysis 

Sample Size Point 

Estimate

95-Percent Confidence 

Interval

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

and were not solicited 151 78.1% 68.3% 86.0%

Physicians who prescribed a specific mode of delivery

and were solicited 151 21.9% 14.0% 31.7%

Physicians who prescribed oxygen, oxygen equipment, 

and supplies, specifying mode of delivery 185 69.4% 60.9% 78.0%

Physicians who prescribed enteral nutrients, equipment, 

and supplies, specifying mode of delivery 87 76.4% 63.9% 86.2%

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) 15

APPENDIX B 

Survey Responses from Physicians in Sample

Table B-1: Number of Physicians in Sample, by Reasons for Prescribing 

Brand (n = 94)

Reason Stratum 1: 

5–19 items

Stratum 2: 

20–89 items

Stratum 3: 

90 or more 

items

Total Number 

of Physicians

Patient needs 15 20 31 66

Physician’s prior 

experience with brand 19 21 26 66

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 

health professional 9 4 6 19

Recommended by sales 

representative 1 3 0 4 

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)

Product Category Stratum 1: 

5–19 items

Stratum 2: 

20–89 items

Stratum 3: 

90 or more 

items

Total Number 

of Physicians

Diabetic supplies 7 6 9 22

Continuous positive 

airway pressure (CPAP) 

devices, respiratory assist 

devices, and related 

supplies and accessories

0 2 4 6 

Oxygen, oxygen 

equipment, and supplies 0 1 4 5 

Enteral nutrients, 

equipment, and supplies 1 0 1 2 

Support surfaces 2 0 0 2 

Hospital beds and related 

accessories 0 0 1 1 

Standard power 

wheelchairs 0 0 1 1 

Walkers and related 

accessories 0 0 1 1 

Complex power

rehabilitation wheelchairs 0 0 0 0 

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) 16

Table B-3: Number of Physicians in Sample Who Received Requests for 

Brand Changes, by Frequency of Requests (n = 33)

Frequency of Requests Stratum 1: 

5–19 items

Stratum 2: 

20–89 items

Stratum 3: 

90 or more 

items

Total Number 

of Physicians

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)

Reason Stratum 1: 

5–19 items

Stratum 2: 

20–89 items

Stratum 3: 

90 or more 

items

Total Number 

of Physicians

Supplier did not carry the 

brand 3 4 9 16

Supplier believed patient 

would be better served by 

another brand

4 1 7 12

Patient asked supplier for 

a different brand 3 3 5 11

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)

Response Stratum 1: 

5–19 items

Stratum 2: 

20–89 items

Stratum 3: 

90 or more 

items

Total Number 

of Physicians

Approved requested 

change 8 5 11 24

Did not approve the 

requested change 0 3 5 8 

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)

Reason Stratum 1: 

5–19 items

Stratum 2: 

20–89 items

Stratum 3: 

90 or more 

items

Total Number 

of Physicians

Following the standard of 

care 30 39 50 119

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) 17

Table B-7: Number of Physicians in Sample Who Received Requests to 

Change Mode of Delivery, by Product Category (n = 32)

Product Category Stratum 1: 

5–19 items

Stratum 2: 

20–89 items

Stratum 3: 

90 or more 

items

Total Number 

of Physicians

Oxygen, oxygen 

equipment, and supplies 9 9 13 31

Enteral nutrients, 

equipment, and supplies 1 1 1 3 

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)

Response Stratum 1: 

5–19 items

Stratum 2: 

20–89 items

Stratum 3: 

90 or more 

items

Total Number 

of Physicians

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)

Reason Stratum 1: 

5–19 items

Stratum 2: 

20–89 items

Stratum 3: 

90 or more 

items

Total Number 

of Physicians

Supplier believed patient 

would be better served by 

another mode of delivery

7 10 9 26

Patient asked supplier for 

different mode of delivery 6 5 8 19

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)

Response Stratum 1: 

5–19 items

Stratum 2: 

20–89 items

Stratum 3: 

90 or more 

items

Total Number 

of Physicians

Made the requested 

change 9 10 10 29

Did not make the 

requested change 0 0 1 1 

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) 18

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. 
 

 

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 OIG’s 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.