Tampa, Fla. An attempt by the Florida Association of Medical Equipment Dealers to halt the Health Care Financing Administration's competitive bidding demonstration project in Polk County, Fla., failed April 28 when a United States District Court judge denied the state association's request for a preliminary injunction.

But Brian Seeley, FAMED president, said he and two Florida HME services companies have decided to appeal the decision on an expedited basis.

"To vindicate our rights, we decided to move forward and appeal," Seeley said. The decision was made after receiving financial commitments from members of the industry, he said. He did not specify the contributors.

FAMED claims HCFA held private advisory meetings, apparently in violation of government procedures. Judge Susan Bucklew ruled that a preliminary injunction was not the appropriate remedy for a past alleged violation, according to FAMED attorney Steve Azia. She did not rule on the merits of the case but suggested FAMED seek other relief, including a declaratory judgment stating that HCFA violated the Federal Advisory Committee Act.

"I still think we have a strong case," Seeley said. "What's scary to me about this ruling is that it basically tells the government to go ahead and violate the rules because unless you file before the meeting, there's nothing the court cando about it."

Seeley said the lawsuit has already cost the plaintiffs $160,000, and an appeal could add between $25,000 and $60,000 to the bill. He said some manufacturers have made generous contributions to the effort and "we've had a lot of support from NAMES [National Association for Medical Equipment Services]."

William Coughlan, NAMES president and chief executive officer, said his association will continue to support FAMED in its fight against what he called "a demonstration process that was designed under a tainted process.

"Government-mandated competitive pricing for HME reduces access to quality services and ultimately results in less competition and higher prices," he said. "This is neither good for Medicare beneficiaries nor the Medicare program."

The injunction that was denied sought to enjoin HCFA from using, disseminating or relying upon the advice and recommendations of the Federal Advisory Committee.

A federal magistrate had recommended that the District Court grant the preliminary injunction.

Cara Bachenheimer, Health Industry Distributors Association vice president of membership services, said timing is crucial. "The winning bids are to go out in late July or early August," she said. "If that's delayed beyond August, HCFA won't have enough time to complete the project by the Balanced Budget Act's required timeline."

Even if FAMED wins its appeal, many fear the project's negative effects have already been set in motion.

Because HCFA received bids March 29, it already knows "how much we're willing to accept for payment of services," Seeley said. "That information is going to affect all of us-if not now, soon."

Seeley said HCFA could use the data to cut reimbursement through national fee schedules or inherent reasonableness.

"HCFA has said it doesn't intend to use the information that way," he said. "That doesn't mean it won't."