Dallas Oxygen Owner Speaks Out on Bidding Lawsuit

DALLAS — “We have to abide by the laws that are set down
by CMS, and CMS should also have to abide by the laws that are set
down by the federal government,” said Dean Cheney. “If it takes
filing a lawsuit to get them to abide by those laws, that’s what we
have to do.”

And that’s why Cheney, the owner of Dallas Oxygen Corp., joined
the Texas Alliance for Home Care Services to
bring suit last week against the Department of Health and Human
Services and the Centers for Medicare and Medicaid Services over
CMS’ refusal to release financial standards for competitive bidding.

“They have to divulge it,” Cheney said bluntly. “If we have to
abide by the law as the [durable medical equipment] industry, then
CMS should also have to abide by the law. And the law says they
have to make this transparent and they have to divulge how they are
using our financial information.

“We have been asking for it and asking for it and asking for it,
and they keep telling us it is none of our business,” added Cheney,
who is a member of the TAHCS board of directors.

The lawsuit, filed May 10 in U.S. District Court for the
District of Columbia, alleges that CMS and HHS have failed to
specify financial standards that providers must meet under the
DMEPOS competitive bidding program, and that public comment was not
considered in crafting the bidding rule. The agency has repeatedly
declined to release the standards, saying that to do so would
invite fraud and give providers an unfair bidding advantage.

“We want the courts to stop competitive bidding until CMS
releases that [financial] information to us,” Cheney said. “If they
want to release it right now, I have no problem with that. But
competitive bidding needs to be stopped, mainly because it doesn’t
make sense.”

Since news of the lawsuit came as industry members were
assembling for Medtrade Spring in Las Vegas, Cheney, who has been
in the HME business for 39 years, said he has received an
appreciative response from peers. “Everybody was slapping me across
the back and saying, ‘We’re glad you did it,’” he said. “But
someone has to do it. Someone has to stand up and say this is not
right.

“It is wrong, downright wrong,” he continued. “The guidelines
were put into place by Congress [for everyone] to follow. We want
to hold them to the same guidelines that we are held to. That’s all
we are asking for — follow the law.”

Industry stakeholders, while applauding the suit, said they are
concerned about the tight timeline. CMS has said it will release
bid rates in June and the winning suppliers in September.

“CMS has 60 days to respond, then we respond to them,” said Jim
Tozzi of the Center for Regulatory Effectiveness, whose legal arm
is handling the lawsuit. “We won’t get this by June 1. But maybe in
September we could possibly get some movement. It’s hard to predict
a timeline.”

Seth Johnson, vice president for government affairs for Exeter,
Pa.-based Pride Mobility Products, said he supports the filing of
the lawsuit “because it raises additional concerns about the
competitive bidding process.”

However, he added, “I’m just concerned that [a resolution] could
be too late … Once the bid rates come out, the damage is
largely going to be done.”

Industry stakeholders have been vocal about worries that some
providers, especially those whose businesses are largely Medicare,
have submitted “suicide” bids that are unsustainable and that will
result in huge numbers of providers closing and severe problems
with patient access.

Tozzi noted CMS has been resistant to the industry’s call to
allow the continued participation in Medicare of any provider
willing to accept competitive bidding rates. Currently, the program
will eliminate all providers except those chosen as winning
suppliers.

“You aren’t going to get rid of competitive bidding because of
the law,” he said, referring to a congressional mandate to
establish competitive bidding for DMEPOS. “But can it go on without
the devastating results on the industry?”

View more competitive bidding
stories.