Skip to Content

Bid lawsuit reaches end of line

Bid lawsuit reaches end of line

WASHINGTON - The U.S. Supreme Court on Feb. 19 refused to hear a petition that would have stopped CMS from awarding competitive bidding contracts until it complied with rulemaking processes.

“It's hard when they tell you 'no' from the day you file it until the day they kick you out the door,” said Barry Johnson, executive director of the Texas Alliance for Home Care Services (TAHCS), which filed the original lawsuit against CMS and the Department of Health and Human Services in 2010.

The lawsuit claimed CMS violated federal statutes that require the agency to disclose the financial standards that HME providers must meet under the bidding program and to provide an opportunity for public comment.

TAHCS appealed to the Supreme Court after the D.C. Court of Appeals ultimately ruled that DME statutory provisions precluded it from reviewing the issue, says a source close to the case.

“The government continues to maintain that they can ignore policy,” said Johnson. “It has become a political issue because they don't want to interrupt competitive bidding. They don't care about financial stability.”

Concern over the financial stability of winning bidders has increased since the Jan. 30 release of the Round 2 payment amounts, which stakeholders believe are unsustainable. That's especially true for the national mail-order program for diabetes supplies, which suffered an average cut of 72%. Such cuts only heighten the need for program transparency, sources say.

“With diabetes supplies, that presents a whole new threat to Medicare recipients and presents new legal issues that need to be resolved,” said Bruce Levinson, senior vice president of regulatory intervention for the Center for Regulatory Effectiveness (CRE), a watchdog group. “With the ability of people to consult with pharmacists (at risk), this is getting into an essential part of care. It's becoming a bigger issue.”

In December, the CRE filed the first of several Freedom of Information Act (FOIA) requests seeking information about the methodology behind the bidding program, but CMS hasn't acknowledged receipt of the requests. The CRE says it may file a Data Quality Act petition against CMS. The act requires federal agencies to use accepted scientific methods when making regulations, something the CRE, as well as industry stakeholders and auction experts, say CMS has not done.


To comment on this post, please log in to your account or set up an account now.