Providers explore mediation in bid lawsuits

Friday, January 9, 2015

WASHINGTON – The HME providers suing the federal government for breach of contract as part of the original Round 1 of competitive bidding are now working on a schedule for mediation. 

The providers met with the judge in the case, Patricia Campbell-Smith, on Jan. 8 and agreed to submit a schedule for mediation by Feb. 11, according to Jerry Stouck, a shareholder with Greenberg Traurig, the law firm representing Cardiosom and three other providers.

“I’m surprised that the government is willing to engage in the mediation process,” he said. “It’s an encouraging sign.”

Cardiosom paved the way for the lawsuits when it got a U.S. Court of Federal Claims judge to rule in its favor in late June, saying the provider is entitled to damages for being awarded contracts and then having them rescinded as part of an 18-month delay to the program in 2008. There are a total of nine lawsuits representing 15 providers.

Elements of the schedule will likely include a date by which CMS has to supply the providers with sales volume data so they can determine lost business, a date by which the providers have to supply a summary of damage claims, and a date by which all the parties will sit down with a mediation judge, according to Stouck.

“We don’t know exactly what the schedule will be, but that will be the process,” he said.

In parallel, the providers will also submit a schedule for litigation activities, says Stouck.

“The issue of whether the government is liable or not has already been decided in the Cardiosom case, but the issue is whether Cardiosom should or shouldn’t be applied to all the cases,” he said.

Whether or not mediation is successful, the process in and of itself will help to prepare the providers for the possible next step: a series of trials, probably some time next year, says Stouck.

“It will allow us to jump into the courtroom more quickly,” he said.