Downcoded
October 25, 20266 min readSubscribers

Your Brace Price Now Belongs to Three Bidders

CMS published the Round 2028 contract counts in August and set the bid clock on October 7. Registration opens December 1. The counts are 125 percent of a supplier count CMS never published, and running the arithmetic backwards says Medicare found exactly two suppliers that matter in off-the-shelf back braces, a code that moved $78.6 million last year. The 2024 public use file says the same thing. If your practice hands a brace to its own patient, you are paid the price those bidders set and you are not allowed to bid.

If you dispense an off-the-shelf back brace, Medicare has already told you how many suppliers it thinks matter in that market.

The number is two, and CMS never wrote it down.

It published a table of contract counts in August, and the contract count is that number with one step of arithmetic on top.

Round 2028 of the DMEPOS competitive bidding program is a single nationwide competitive bidding area: all fifty states, the District of Columbia, and the territories down to American Samoa. Seven product categories, seven lead items, seven award counts (chart below).

Three contracts for off-the-shelf back braces. The lead item, L0651, carried $78.6 million of Medicare allowed in 2024 across 571 billing suppliers.

What a Contract Count Gives Away

42 CFR 414.414(h)(3)(i) sets the award count for any competition running for the first time after 2023, and it is five steps:

  1. Take total utilization, meaning allowed services, for the lead item in the most recent calendar year.
  2. Count the suppliers that each furnished at least 3 percent of it. CMS calls that N.
  3. Multiply N by 1.25.
  4. Round to the nearest whole number.
  5. Floor the answer at two.

So every published count is round(N x 1.25).

And 1.25 is coarse enough that running it backwards gives one answer rather than a range, because no two integers land on the same count.

Ten contracts means N was 8. Six means 5. Five means 4. Four means 3. Three means 2.

There is a rounding wrinkle worth one line.

Two times 1.25 is 2.5, which only reaches three if CMS rounds half up, and under banker's rounding a count of three is unreachable from any integer at all. CMS published three, so half up it is, and the back brace answer holds.

Lay the seven counts against what they imply and the whole program is a concentration map CMS published without labelling it:

  • Class II CGMs and insulin pumps, 10 contracts: 8 suppliers at or above 3 percent of A4239.
  • Hydrophilic urinary catheters, 10 contracts: 8 on A4296.
  • Ostomy supplies, 6 contracts: 5 on A4385.
  • OTS upper extremity braces, 5 contracts: 4 on L3916.
  • Urological supplies, 5 contracts: 4 on A4352.
  • OTS knee braces, 4 contracts: 3 on L1852.
  • OTS back braces, 3 contracts: 2 on L0651.

The rest of this brief is for subscribers.

The impact tables, the code-level detail, and the rest of the analysis sit past this line.

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