HME Organizations Say Negotiations First, Legal Action Next

ATLANTA–Between contacting CMS and Congress, industry
organizations have had their hands full attempting to minimize the
impact of competitive bidding on the nation’s providers.

That includes potential lawsuits contesting the program from the
American Association for Homecare, VGM, the National Association of
Independent Medical Equipment Suppliers and others. To outline each
organization’s game plan, here is what HomeCare Monday has
learned.

–AAHomecare has begun talks with Washington, D.C., law firm
Sidley Austin on what legal recourse the industry may have in the
face of competitive bidding. In a notice last week, the association
said it would “coordinate legal initiatives to prevent
duplication of efforts.”

Michael Reinemer, vice president of communications and policy
for AAHomecare, said the organization has begun talks with other
industry groups to promote “efficiency” in combating
competitive bidding. “We have to ask ourselves ‘What can
actually be done?’” Reinemer said. “Let’s be on the same
page.”

AAHomecare President and CEO Tyler Wilson said the association
has logged more than 160 complaints about bid disqualification and
other problems in round one, and the organization is currently
working to address the issues through diplomacy.

“I think it’s best to first take a step back and say that
our choice would be to work through these issues in a cooperative
fashion with CMS. That may mean going through Congress,” he
said. “I think it’s premature to start talking about other
legal options until we see what all of the claims are.”

In the interim, Wilson said he has begun to “reach
out” to member services organizations VGM and The MED Group
to “try to coordinate to make sure there aren’t duplicate
efforts going on out there.” He also warned that legal action
will be “very expensive,” but said Sidley Austin is
examining the industry’s options should the issues not be resolved
through communication.

–“I appreciate, applaud and support AAHomecare’s efforts
in being proactive in hiring a Washington law firm,” said industry
attorney Jeff Baird, chairman of the Health Care Group at Brown
& Fortunato. “[AAHomecare] certainly wants to resolve these
issues through negotiations, but by having a law firm ready to go
in Washington, D.C., I think that’s a good idea.”

For his part, Baird said the Amarillo, Texas, firm has been
contacted by a number of HME owners who feel they were unfairly
disqualified from the bidding process.

“We have instructed them to work with the CBIC and with
their elected representatives. We have also instructed them to
support AAHomecare in its attempts to work out the problems with
CMS and Congress,” Baird said. “However, our clients
are ready to go to court if the political/administrative efforts
fail.

“On our clients’ behalf, we have researched whether the
statutory prohibition against judicial relief prevents HME
suppliers from going to court,” Baird said. “We have
completed our research. We believe that judicial preclusion is not
so broad as to prohibit companies from seeking judicial relief from
blatant mistakes made by the CBIC.”

–Waterloo, Iowa-based VGM has also sought legal counsel in
Washington, D.C., from Akin & Gump.

“We are working on several fronts to combat competitive
bidding round one and to delay implementation of round two, mainly
focused on legislative remedies in the short term while still
looking at the legal action as the long-term effort,” said
John Gallagher, VGM vice president of government relations.

Akin & Gump is reviewing the questions of constitutional
grounds for litigation based on due process and regulatory burden
“to name just a few,” Gallagher said.

But he said VGM would also support other industry efforts.

“We fully support the efforts of many entities in the
industry to launch their own legal remedies. The more suits that
are launched in different courts, the better chance we have to have
a federal judge sit up and take notice,” Gallagher said.
“The question remains what resources are available and what
time limitation are we under–we are told that courts look to a
60-day window–for litigation.”

–President and CEO Wayne Stanfield of NAIMES said the
association is working in conjunction with VGM and its Last Chance
for Patient Choice in talks with Akin & Gump.

A Thursday message detailed the group’s intentions to raise
money for legal costs should a court battle become necessary. For
its “DME Legal Defense Fund,” NAIMES seeks $1,000
pledges from suppliers in all 80 MSAs included in competitive
bidding that will be used “for legal expenses related to
litigation in this case.”

“NAIMES is aware of a number of legal initiatives being pursued
and intends to use the funds gathered to support the paths it sees
that have the best chance of success. Taking such steps will
require that a substantial amount of money be raised,” the message
said. Money contributed will be offered for return to donors, pro
rata, if not used, the organization said.

The association also continues to focus on a grassroots solution
to the competitive bidding problems, Stanfield said. “We have the
power to delay this ill-conceived process through Congress, but it
will require more suppliers to be involved and politically
active.”

No matter what paths the various industry organizations choose,
NAIMES Chairman Wayne Sale, president of Health First in Richmond,
Va., said the overall fight is for “the greater
good.”

“There’s a battle to be fought and a battle to be
won,” he said.