Three Lawsuits Fail to Halt NCB; Two Still Pending

DALLAS–The industry’s hopes for a judicial delay of
national competitive bidding dimmed on Thursday when a Dallas judge
refused to grant a temporary restraining order stopping the
troubled project, which is set to start tomorrow.

“The court determined that the specific facts presented
did not warrant the granting of a TRO,” said Jeffrey S.
Baird, chairman of the health care group for Amarillo, Texas-based
Brown & Fortunato. The firm sought the hearing in a lawsuit
filed against Michael O. Leavitt, Department of Health and Human
Services secretary, and Kerry N. Weems, CMS acting administrator,
on June 11.

The suit, filed on behalf of five HME providers and two
beneficiaries, was funded by Waterloo, Iowa-based VGM Group’s
Last Chance for Patient Choice, an entity formed to fight
competitive bidding.

“Depending on what happens in the other lawsuits, B&F
may request a hearing on a request for a preliminary injunction, at
which time other evidence and live testimony would be presented,
and additional plaintiffs may be added,” said Baird.
“Such a hearing would likely be held sometime in
July.”

The lawsuit was one of five filed in an effort to delay
competitive bidding.

On June 19, a District of Columbia district court judge
dismissed a suit brought by two small North Carolina HME providers
alleging that the HHS secretary singled out mail-order diabetic
supplies for competitive bidding based on mode of delivery.

The judge ruled that because storefront and mail-order providers
incur different costs and their access to geographical markets is
not the same, consideration of the delivery method “is not an
ancillary policy”; instead, the judge ruled, “it is
encompassed in the very act of identifying and selecting items and
services.”

On June 16, Miami law firms de la O, Marko, Magolnick &
Leyton and Kravitz and Talamo filed a lawsuit seeking a preliminary
injunction against competitive bidding on behalf of the All Florida
Network, a group of HME providers that claimed wrongful
disqualification from the bidding program. Last week, a federal
judge dismissed the suit, ruling that the Medicare Modernization
Act bars judicial review.

Two other lawsuits against the national bidding program are
still awaiting hearings:

–A suit re-filed in mid-May by Cleveland-based Walter &
Haverfield amends a complaint initially filed in December with one
plaintiff. That suit, also backed by VGM’s Last Chance, now
has three additional plaintiffs and also seeks an injunction
against the bidding program. “The judge has promised a ruling
before July 1,” said attorney Michael J. Jordan.

–On June 19, the American Association for Homecare filed a
federal lawsuit through D.C. law firm Sidley Austin seeking an
injunction against competitive bidding. On Friday, Michael
Reinemer, AAHomecare vice president, communications and policy,
said the organization expected to hear about a ruling by today.