In the continuing storm of controversy nationwide over the various Medicare bidding programs being implemented, a U.S. District Judge in the District of Columbia has denied a request for an injunction of the Centers for Medicare & Medicaid Services (CMS) durable medical equipment (DMEPOS) bidding program. U.S. District Judge Richard Urbana handed down his decision on Monday.

The bidding program was scheduled to begin Tuesday. Under the program, CMS will select DME suppliers to participate in Medicare based on winning bids they submit. The 2003 Medicare law mandated the program as part of a larger effort to implement competitive bidding.

This latest action follows a long line of litigation and congressional hearings on the various bidding programs now being instituted across the U.S. In recent months, the House Ways and Means Committee heard testimony on DMEPOS bidding, including reports from industry experts stating the program was poorly conceived and flawed. (See previous stories at DM 6416, DM 6348, DM 5973, DM 6043 DM 6215, 5773, 5662 and DM 6400 on the CMS bidding program and related cuts in Medicare funding*.) A similar Medicare project for clinical diagnostic laboratory bidding, in the San Diego-Carlsbad-San Marcos area, was halted by injunction in the Southern District of California earlier this year due to the likelihood of irreparable harm to nonwinning labs in the site area.
The plaintiffs in the D.C. action are the American Association for Homecare (an advocacy and counseling organization representing U.S. healthcare businesses supplying medical items and services to Medicare beneficiaries) and Ace Drug (a member business) who, in their lawsuit filed earlier in June, named HHS Secretary Mike Leavitt and acting CMS Administrator Kerry Weems as defendants, accusing them of failing to declare specific financial standards in the bidding rules as required by federal law, as well as failing to define properly and lawfully what type of business constitutes a "small supplier" of Medicare items and services, in violation of several federal laws including the Administrative Procedure Act and the Small Business Act. The injunction would have prevented the program from being implemented while the litigation between AAHC and Ace was ongoing.

Similar to other bidding programs, the DMEPOS program required suppliers to meet accreditation and quality standards, and to submit a competitively priced bid for a service or item. After such contracts are awarded to winning bidders, a Medicare beneficiary may only obtain supplies from a provider who has a contract with HHS. Prior to implementation, HHS did not release any advance specification of financial standards for the prospective bidders.

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