Texas Plaintiffs Ask Court to Quash Competitive Bidding
When all else fails, sue.
That's what three Medicare beneficiaries are doing to stop competitive bidding. Their suit, filed last week in U.S. district court in Dallas, asks for a permanent injunction against CMS' implementation of the competitive-bidding program mandated by Congress in the omnibus Medicare reform law passed in 2003. Aided in their suit by the VGM Group and a non-profit organization called Last Chance for Patient Choice, the plaintiffs argue the program is unconstitutional because it discriminates against beneficiaries and providers.
The suit's legal argument is that Medicare beneficiaries in the various bidding areas will get lower-quality products and services than non-Medicare beneficiaries and that the program is biased in favor of large DMEs, which may result in catastrophic financial consequences for smaller providers.
"An area of service constrained by an artificial bidding system which rewards bidders who reduce quality of service and product and punishes providers who demand a price sufficient to maintain acceptable and equal service levels . . . is inherently unjust, unequal and unnecessary," the suit argues.
Arguing that competitive bidding creates two classes of beneficiaries, the suit alleges that, "Medicare beneficiaries in the cities using the low-bid system are left to sink or swim with the surviving DME suppliers whose sole virtue is their cheap product . . . In contrast, non-Medicare beneficiaries will find safe harbor in DME suppliers concerned with not only price, but quality and service," according to the suit. "Thus, the favored class, non-Medicare beneficiaries, will receive all the care their medical conditions require, while Medicare beneficiaries are left to choose among the low-quality, generic products, regardless of their individualized health care needs."
The suit concludes that competitive bidding threatens to harm "Medicare beneficiaries whose medical needs cannot be met by one-size-fits-all DME providers."
Legal experts say the lawsuit has an uncertain future because the forecasted injury is prospective and speculative -- no one has actually been harmed yet. Also the competitive-bidding program was mandated by Congress, which begs the question of whether CMS's implementation can be quashed without passing judgment on the constitutionality of the 2003 statute.
Those listed on the suit include beneficiaries Gregory Hewitt, Jose M. Salas Jr. and Charles W. Bell, and HME companies Oxyonly (dba Procair), M.S.B. and Cardiorespiratory Home Systems. The suit names HHS Secretary Michael O. Leavitt and acting CMS Administrator Leslie V. Norwalk as defendants.
No hearing dates on the suit have been set.
This article originally appeared in the June 2007 issue of HME Business.