Competitive bidding: Judge rebukes CMS

Thursday, February 28, 2013

MINNEAPOLIS – A federal judge may have granted the government’s request to dismiss a competitive bidding-related lawsuit filed against CMS by a specialty HME provider, but that doesn’t mean he thinks justice was served.

“This is a sad day for those who believe that when a judge adheres, even-handedly, to his or her oath of office, justice will prevail and the public interest will be served,” U.S. District Judge Donovan Frank wrote in a memorandum.

Shoreview, Minn.-based Key Medical Supply, which provides specialty medical equipment to the developmentally disabled, including customized feeding tubes, argued in a lawsuit filed March 2012 that the competitive bidding program would cripple the company’s business and jeopardize patient access to equipment and supplies.

In the memo, Frank, who presides over the U.S. Court for the District of Minnesota, said he lacked the authority to rule on the legality of competitive bidding, and granted the dismissal on those grounds—albeit with reservations.

“While the decision on the motions is supported by law, the court is deeply concerned about the unjust consequences of its order,” he wrote.

The memo also contained a strong rebuke of competitive bidding and the defendants in the case—CMS and the Department of Health and Human Services (DHHS). Frank wrote that the record indicates a “seeming indifference” on the part of the defendants with respect to those with developmental and intellectual disabilities, whom he said have a demonstrated need for customized feeding tubes because, unlike conventional tubes, they are harder to dislodge.

“Each and every citizen is entitled to equal justice under the law, which is not measured by incidence of death or hospital admissions, but rather by the right to receive medically necessary treatment and to live each day with dignity and respect,” he wrote.

Key Medical is not the only provider to file a competitive bidding-related lawsuit against CMS. The Texas Alliance for Home Care Services (TAHCS) filed a lawsuit against CMS in 2010 that claimed the organization violated federal statutes requiring the agency to disclose the financial standards HME providers must meet under the bidding program. On Feb. 19, the U.S. Supreme Court refused to hear the petition, which would have stopped CMS from awarding competitive bidding contracts. The high court upheld a D.C. Court of Appeals ruling that DME statutory provisions precluded the appeals court from reviewing the issue.