Bidding: AAH abandons lawsuit, lawmakers apply pressure

WASHINGTON - AAHomecare has dropped its bid to stop competitive bidding in the courts.

The association, along with Havre de Grace, Md.-based Home Mediservice, filed a lawsuit in June that argued CMS violated its own rules by awarding Round 2 contracts to providers that didn't meet licensure requirements.

“Based on the signals that we've received from the court and the advice of legal counsel, it didn't appear that we would see any different outcome,” said Tom Ryan, president and CEO. “It would be very costly to litigate and it didn't seem prudent to spend any more association money on it.”

In August, the Department of Health and Human Services filed a motion to dismiss the lawsuit that argued the court doesn't have jurisdiction to rule on the bid program. If AAHomecare had wanted to press forward, it would have had to file a response in September.

The decision not to move forward with the lawsuit frees the association to focus its attention on H.R. 1717, a bill to replace competitive bidding with a market-pricing program (MPP), as well as an investigation by the Office of Inspector General (OIG). The latter seeks to determine whether or not CMS awarded contracts to providers that did not meet licensure requirements in Maryland, Michigan, Ohio and Tennessee. AAHomecare has been in regular contact with the OIG to provide information on licensure issues, said Ryan.

Lawmakers are also weighing in on the investigation. In a Sept. 24 letter to the OIG, Rep. Bill Johnson, R-Ohio, expressed concerns that 80 contract suppliers are not licensed in the state. In a similar letter dated Sept. 17, seven members of the Tennessee delegation cited CMS's “apparent mismanagement” of the program, and its slow response to industry concerns.

Two other reports are due by the end of the year: An OIG review of CMS's calculations of the single payment amounts; and a Government Accountability Office review of the impact of Round 1 on quality and access to equipment and services.

“It's all ammunition on Capitol Hill to increase the pressure on Congress to move forward with MPP,” said Cara Bachenheimer, senior vice president of government relations for Invacare. “Folks on the Hill know those reports are relatively imminent.”