Competitive Bidding Litigation: Providers Look to the Courts and Congress for Relief
Late last week, Washington submitted its response to a lawsuit filed last June in Dallas by a group of HME providers and Medicare beneficiaries. The suit seeks to block national competitive bidding. The Federal government argued that the plaintiffs failed to present a legal claim and asked the judge to dismiss the suit. At press time, lawyers for the plaintiffs, three small DME companies and three Medicare recipients, were working on a response to the government's arguments.
It's up to the judge now to consider the government's motion and the plaintiff's counterarguments and decide whether the case goes forward.
"We anticipated the government's argument," said Jeffrey Baird, a health-care attorney with the Amarillo, Texas, firm of Brown & Fortunato, which represents the plaintiffs. "And so we now have to file a response to that. If the judge decides against us, that's bad, and we'll have to decide what to do from there."
Even if the judge sides with the government and throws the suit out, the call can be appealed, Baird said.
If the court gives the suit a green light, the DMEs' attorneys will seek a hearing. "We'll ask for a preliminary injunction to enjoin the implementation of competitive bidding until there is a final trial," Baird said. If granted, the injunction would stop competitive bidding cold.
Baird explained that the lawsuit in Texas will soon be joined by a similar action in Ohio. "The lawsuits are one prong in a multi-pronged approach to either eliminate or modify competitive bidding," Baird said. "We're also looking at legislation in the House and Senate, and we're looking at the political process where representatives and senators are being lobbied by the industry."
A regulatory attorney well-known in the DME community, Baird said that even though competitive bidding may eventually collapse under its own weight, for now it looks as though it will be implemented in the next wave of 70 MSAs. "Is it going to go beyond the next 70 MSAs? I do not think so," Baird said. "Will all these contracts be renewed after three years? I've got my doubts. Will CMS use the numbers from competitive bids to bring reimbursements down? Of course."
Baird said that although it's clear competitive bidding will prove unworkable, the industry's comparatively small size places it at a political disadvantage. "It's pretty small compared to doctors, hospitals, pharmacists and so forth, just a very small voice," he said. "So, now, we have to make ourselves more visible. And, hopefully, over time, CMS will back away and treat us the same way they treat the other health-care industries."
The irony, as Baird sees it, is that HME providers are actually saving the health care system enormous amounts of money by helping patients who would otherwise be hospitalized remain at home. "Medicare should want to pay a lot of money to HME providers," he said. "If you're paying HME companies, then that means these 80-year-old people are not in the hospital, which is the most expensive way to deliver health care."
While there's some potentially encouraging action on the legal front, Congress continues on a path that industry observers criticize as being bad for providers and beneficiaries.
Neither the House nor Senate have acted on bills that would modify competitive bidding to ensure the continued participation of providers who lose out in competitive bidding. But there has been progress on legislation that would affect providers and their beneficiaries who use oxygen and power wheelchairs.
The House and Senate have both passed bills reauthorizing the state children's medical insurance program, but the House version includes wide-ranging Medicare-reform provisions, including the infamous 18-month oxygen-rental cap and a change that would effectively force patients to rent rather than purchase their power chairs. While these provisions could have far-reaching negative consequences for Medicare beneficiaries and DME providers, they are overshadowed by the bill's many other politically controversial sections.
Because the Senate bill contains no Medicare provisions, the two versions of the legislation have to be reconciled by a conference committee before going back to each house and then on to the president. At press time, conferees had not set a time to begin work.
House Ways and Means Committee Chairman Charles Rangel (D-NY) is committed to preserving the Medicare provisions and reportedly has Speaker Nancy Pelosi's support. House Majority Leader Steny Hoyer (D-MD) told Congress Daily that his colleagues "feel very strongly that the package works together for a lot of objectives that we all should be able to agree on. We worked very hard on a lot of component parts that all work together."
If House and Senate Democrats succeed in hanging on to their Medicare-expanding changes, the odds are good that the president, who opposes widening Medicare coverage, will veto the bill.
This article originally appeared in the September 2007 issue of HME Business.