FAMED Wins Preliminary Round In Competitive Bidding Battle

Tampa, Fla. A United States magistrate judge sided with the Florida Association of Medical Equipment Dealers March 10 and recommended that a federal district court issue a preliminary injunction to halt implementation of the Medicare home medical equipment competitive bidding project in Polk County, Fla.

The judge recommended that the district court grant a motion for a preliminary injunction that would prohibit the Health Care Financing Administration from using an advisory committee-the National Technical Expert Panel-during the development of the project until HCFA complies with federal guidelines for seeking industry input.

NTEP was developed by HCFA in violation of the Federal Advisory Committee Act, the judge said. The federal court could prevent HCFA from conducting the project, "which is the result of an allegedly tainted process," according to the magistrate judge's ruling.

Competitive Bidding Schedule Set Lakeland, Fla. The Polk County, Fla., competitive bidding demonstration project moved closer to reality when Health Care Financing Administration officials announced an implementation schedule that kicked into gear March 29.

But HCFA officials, meeting with about 100 home medical equipment providers at a Medicare competitive bidding conference on February 23, also revealed for the first time an escape clause in the unlikely event the agency decides to scrap the project.

According to the schedule, the deadline for providers to submit bids was March 29; bids will be evaluated until July 12; and winning providers will be announced August 1. A directory of those providers will be distributed September 1; the project is scheduled to begin operating October 1.

The conference was held to describe the bidding process to providers, explain operational policies and allow providers the chance to question administrators, officials said. Among the concerns expressed by providers was the potential for below-market, or low-ball, bids, and assurance of product quality. HCFA officials indicated for the first time that winning bids "would be one factor" in establishing prices for inherent reasonableness.

Despite providers' reservations about the project, HCFA remains committed to implementation, said those in attendance. But HCFA officials, they said, did mention a contingency option.

"If they see a problem, they can intervene and withdraw and go back to the current system," said Mark Hobratschk, associate director for regulatory affairs for the Health Industry Distributors Association, Alexandria, Va. "That's the first we've heard of that." -Ken Gurnick