Industry files two new lawsuits against Medicare

Sunday, June 15, 2008

WASHINGTON - The industry hit CMS with a one-two punch last week when it filed two separate lawsuits seeking to halt national competitive bidding (NCB). Both suits ask for an immediate injunction against the July 1 start of the program.

AAHomecare filed suit June 9 in the District of Columbia on behalf of its members. The association is also requesting a permanent injunction to prevent Rounds 1 and 2 from moving forward.

"We've always thought it was important to challenge this program on multiple fronts," said Tyler Wilson, AAHomecare president and CEO. "We've raised concerns with Congress, but some concerns are better addressed by the courts."

The complaint argues that the implementation of the program has resulted in numerous violations of the Medicare Modernization Act of 2003, the Small Business Act and the Administrative Procedures Act. The suit names Health and Human Services Secretary Michael Leavitt and CMS Acting Director Kerry Weems.

"HHS and CMS have failed to meet some of their statutory obligations implementing the program," said Wilson. "The secretary of HHS did not specify the applicable financial standards that home medical equipment providers were required to meet to be awarded contracts."

The suit also asks that CMS adopt the Small Business Administration's definition of a small supplier as one with $6.5 million in annual revenues, as it originally proposed, instead of the "arbitrary" $3.5 million the agency used in the final rule.

Also last week, industry attorneys at Brown & Fortunato filed a federal lawsuit on behalf of several providers in Dallas. Funded by Last Chance for Patient Choice, the lawsuit asks for both a temporary and permanent cessation to the program.

Jeff Baird, an attorney with the Amarillo, Texas-based firm, said he planned to seek an expedited hearing for the preliminary injunction.

"Even if we get legislative relief, our intention is to continue with the lawsuit," he said. "The only reason we would back off is if NCB goes away."

It is the second time Last Chance has brought suit against CMS in Dallas. The first lawsuit, filed last June, was dismissed in December.

Last Chance also has a suit pending in Cleveland. Another industry group is expected to file its own suit in Miami soon, Baird said.

While it may seem like individual lawsuits are counterproductive, there are tactical reasons for separate complaints, Wilson said.

"This is not to divide the industry in any way, shape or form," he said.

With the July 1 launch of the program just over two weeks away, Wilson acknowledged that some providers who won contracts might not welcome a halt to the program, but he said the long-term health of the industry depended on a program delay.

"We've heard from winners that while they may be a winner, they have concerns about NCB and what it means in Round 1, 2 and down the road," he said. "(Most) are in support of our moving forward."