CQ TODAY MIDDAY UPDATE
June 30, 2008 – 1:12 p.m.
Court Refuses to Suspend Medicare Durable Equipment Bidding Awards

Companies that lost out on bids to provide home medical supplies to Medicare patients also lost another round in court on Monday, when a federal judge in Washington declined to issue an injunction against the bidding program.

Beginning Tuesday, with a few exceptions, only the 325 companies that submitted winning bids earlier this year will be able to provide equipment like oxygen sets, hospital beds and walkers to Medicare patients in 10 metropolitan areas. The bidding program is expected to save taxpayers about $1 billion a year when it is fully implemented, and will also reduce co-payments seniors have to pay for their medical equipment.

But the bidding has been fiercely opposed by suppliers of the equipment — known as “durable medical equipment,” or DME, in health circles. More than 600 companies lost out, and their influential trade association, the American Association for Home Care, says that many of the suppliers — an industry dominated by small businesses — will close.

The trade association and one supplier that lost a bid sued Health and Human Services Secretary Michael O. Leavitt and the Centers for Medicare and Medicaid Services on June 9 in an effort to stop the program from taking effect.

But U.S. District Judge Ricardo M. Urbina on Monday denied the plaintiffs’ request for an injunction.

The future prospects for the association’s lawsuit are not promising; two similar lawsuits elsewhere in the country have been dismissed. But suppliers who lost bids may have much more success in Congress. Democrats added provisions to delay the program for 18 months to pending legislation that would reverse a scheduled cut in Medicare fees for physicians.

Jeff Nelligan, a spokesman for CMS, said Monday that the agency plans to implement the results of the bidding Tuesday as scheduled.

Source: CQ Today Midday Update
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