** Shares of diabetes device makers DexCom DXCM.O and Tandem Diabetes Care TNDM.O fall nearly 4% each premarket

** DXCM down 3.8% at $84, while TNDM down 3.9% at $17.92

** The Centers for Medicare and Medicaid Services late on Monday proposed changes to the competitive bidding program aimed at lowering diabetes patients' copay for insulin pumps, continuous glucose monitors and other devices

** J.P.Morgan says changes would affect Abbott ABT.N and DXCM, who manufacture CGMs, as well as insulin pump makers TNDM and Beta Bionics BBNX.O

** Brokerage says the Office of Inspector General is reviewing CGMs with the goal of checking distributor margins, and not target manufacturer prices

** J.P.Morgan believes current CGM distributor margins of about 70% are appropriate and don't expect any near-term pricing impact on ABT or DXCM from the OIG review

** "However, we'd expect over time for CGM pricing to continue to move lower each year," says J.P.Morgan

** Reimbursement cut could steer more distributors to ABT due to lower costs vs DXCM - brokerage

** As of last close, DXCM up 12.2%, ABT up 20.3%, TNDM down 48.3% YTD

(Reporting by Siddhi Mahatole in Bengaluru)

((siddhi.mahatole@thomsonreuters.com))