Washington The Office of Management and Budget in late January granted emergency clearance for the Health Care Financing Administration's forms for the home medical equipment competitive bidding demonstration project in Polk County, Fla., but the Florida Association of Medical Equipment Dealers and several Florida companies filed a federal lawsuit against HCFA challenging the project's implementation.

HCFA mailed out the forms in February and said the project's likely starting date is October 1, 1999.

Two weeks earlier, the OMB directed HCFA to "fully resolve all conflicts" between the demonstration rules and the skilled nursing facilities' consolidated billing requirement that is scheduled to begin April 1, 2000. However, industry representatives said the problems remain.

"Our biggest concern is that the SNFs have not been involved in the process at all, but in a year or so, they will be bound by everything that has occurred over the past three years," said Asela Cuervo, assistant vice president of regulatory affairs for the National Association for Medical Equipment Services.

SNF residents will be part of the demonstration project, but few of the 12 SNFs in Polk County are even aware of it, said Mark Hobratschk, associate director of government relations for the Health Industry Distributors Association.

"None of them have supplier numbers, and it's doubtful they could get one in time to bid, even if they wanted to," he said.

Hobratschk predicts major billing difficulties when the consolidated billing initiative is enacted and SNFs must process separate rates for Polk County residents.

The revised bid package contains some concessions. Only bidders that fall into a competitive range will be required to submit financial data, and payer-mix questions have been eliminated, Cuervo said. Also, the bid period has been extended from 30 to 45 days, Hobratschk said.

"I think the OMB believes this is a compromise," Cuervo said.

Meanwhile, FAMED filed suit claiming HCFA failed to follow guidelines for seeking industry input. The suit contends HCFA established and utilized an advisory committee-the National Technical Expert Panel-in violation of the Federal Advisory Committee Act, which requires advisory committees to be subject to uniform procedural standards.

"They make us jump through hoops every day," said Brian Seeley, president of FAMED. "Our goal is to demonstrate that they not only must abide by the same set of rules, but that they haven't."

HCFA officials said at press time that they had not received the lawsuit, but indicated they would press on with implementation of the project.

The suit, however, seeks a halt to the project until HCFA complies with the guidelines.

"Our task is to have the procedures followed properly by HCFA," Seeley said. "Ideally, they will have to go back to ground zero and implement it all over again. If that happens, so be it. And accept our input. Make us more a part of the process.

"Florida providers have developed long-term relationships with Polk County Medicare beneficiaries," he added. "The demonstration project may end these relationships without those directly affected having had an opportunity to be heard."

Under the proposed bidding demonstration project, a Medicare beneficiary's freedom to choose a qualified provider would be limited to a small number of winning bidders selected by HCFA.

The lawsuit was filed by FAMED, the organization's name at the time the competitive bidding process began. It recently changed its name to Florida Association of Medical Equipment Services.