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The DMEPOS CBP was mandated by Congress through the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003 and has been an essential tool to help Medicare set more reasonable payment rates for DMEPOS items, save money for beneficiaries and taxpayers, and limit fraud and abuse in the Medicare Program while ensuring access to quality items.

The Centers for Medicare & Medicaid Services (CMS) has contracted with Palmetto GBA to operate as the Competitive Bidding Implementation Contractor (CBIC) to assist CMS in administering the DMEPOS CBP. In coordination with CMS, the CBIC is responsible for conducting certain functions including performing bid evaluations, selecting qualified suppliers, setting payments for all competitive bidding areas, and supporting CMS education efforts. The CBIC also assists CMS in monitoring the program's effectiveness and beneficiary access to quality DMEPOS.