Bid lawsuits: 'A slim chance is a slim chance'

WASHINGTON - Two legal efforts to stop competitive bidding are still in play but face significant obstacles, say industry stakeholders.

AAHomecare last week learned that the Department of Health and Human Services (HHS) has filed a motion to dismiss the association's lawsuit, which argues that CMS violated the rules governing the bid program by awarding contracts to providers without proper state and local licenses.

“Our executive committee is looking at this, and we have to decide what our resources allow us to do and what our next step is,” said Tyler Wilson, outgoing president and CEO of AAHomecare. “We feel strongly about the correctness of our position, but justice doesn't always prevail in the courts.”

If it choses to move forward, AAHomecare, which filed the lawsuit in June with Havre de Grace, Md.-based Home Mediservice, must file a response in September.

Another stakeholder, Shoreview, Minn.-based Key Medical Supply, has decided to move forward with its lawsuit, which argues that the bid program will cripple its business and jeopardize patient access. It filed an appeal in June and the Midwest Association for Medical Equipment Services (MAMES) filed an amicus brief in August.

“One of the things the judge said as part of his ruling was, 'How come there aren't hundreds of companies involved?” said Rose Schafhauser, executive director of MAMES. “This was the perfect opportunity to show the court that we have four bid areas in our territory and this is impacting our entire membership.”

Both lawsuits have faced this big obstacle: To date, the courts have agreed with the government that they don't have jurisdiction to rule on the bid program.

“I'm not sure there's a reason to think the judicial bar will be any weaker going forward,” said Dan Leyton, a partner at Kravitz Talamo & Leyton, which has been involved in past lawsuits. “But maybe there's room for some creative lawyering.”

So what's pushing stakeholders forward? In the Key Medical Supply case, at least, the judge granted the government's request for dismissal, but he also strongly criticized* HHS and the bid program.

“We need to show we're doing everything in our power to stop this,” Schafhauser said. “Even if there's a slim chance, there's a slim chance.”