DALLAS--In a move described by a VGM Group executive as expected but discouraging, the government has filed a motion to dismiss a lawsuit that challenges the constitutionality of competitive bidding. But the Waterloo, Iowa-based buying group says a second suit is on the way.

The first lawsuit, filed in June on behalf of three Dallas-area beneficiaries and three small HME companies, argues that competitive bidding violates due process and equal protection under the U.S. Constitution. The 19-page document points out that beneficiaries in competitive bidding areas will receive "a different, lower level of product and/or service quality," and that small HME businesses will be unable to compete under the program. (See HomeCare Monday, June 18.)

The government's motion, filed Sept. 12, alleges three jurisdictional grounds for dismissal: standing, ripeness and statutory preclusion of review, according to Amarillo, Texas-based Brown & Fortunato. The law firm filed the suit with support from VGM's Last Chance for Patient Choice, a non-profit formed to fight competitive bidding.

"The standing argument focuses on the idea that the plaintiffs' injuries are merely speculative," attorney Jeff Baird, chairman of Brown & Fortunato's health care group, explained in a statement. "The ripeness argument is similar to the standing argument in that it argues that the plaintiffs' case is not ripe because bids are yet to be awarded (or denied), so there is nothing for the court to adjudicate. Third, the government argues that the provision of [the Medicare Modernization Act] that bars 'administrative and judicial review' precludes the lawsuit."

Jim Walsh, president and general counsel for VGM, said the motion to dismiss the suit was not a surprise. "It was expected, but it is always discouraging to see your own government admit that it doesn't have to be fair," he said.

Walsh said the government was trying to short-circuit the process. "The motion basically is asking the court to peremptorily dismiss the suit because the government has the right to discriminate if it wants to in dealing out Medicare benefits," Walsh said. "Our suit asks that the court find it is illegal to deny full benefits via full reimbursement to some beneficiaries in some arbitrarily selected locations."

In his statement, Baird said that a response to the motion would be filed. "If the court denies the motion, then the plaintiffs will likely request a preliminary injunction hearing, in which the plaintiffs will ask the court to enjoin competitive bidding until a final judgment is rendered at a subsequent trial."

Walsh said Last Chance for Patient Choice, financed primarily by VGM member contributions, would continue to resist the government's motion. "Depending on the ruling, either party could appeal the matter to a higher court," he said. "Time will tell, but our position has always been that this is just one tool that we are [using] to convince someone that this competitive acquisition system is an unfair abomination that will decimate fair competition, quality of care and access to care in the HME area."

It isn't the last of the lawsuits, either. Walsh said Last Chance is assisting with the filing of another lawsuit in Cleveland, Ohio, that also challenges the constitutionality of competitive bidding. That suit, which will be handled by a Cleveland law firm, could be filed as early as this week, he said.