Lambert said he had written a letter to that state agency complaining about the billing issue and was told to take his case to the Joint Legislative Audit Committee. "We have to go through the interior appeals process before we can go to a state or federal court," he said. "Meanwhile, [Medi-Cal] has offset $165,000 from us. We've asked for a payment plan, but we haven't heard a thing."

Lambert said he wants to form a coalition of providers to work to settle the issue. He's contacted some providers by phone and others by letter.

"For the past two years, the state of California has been auditing dealers and found that most dealers were ... billing listed, coded items with a price on file electronically rather than manually pricing at a percentage over cost and filing a paper claim," Lambert wrote in his letter. He added that by billing in this manner, providers "have probably exceeded the upper billing limits set by state law."

He cautioned that "rather than taking any action to resolve the problem that exists at every level of the Medi-Cal system ... and re-educating everyone within the system, they have chosen to go after dealers, one at a time, who are simply following the billing instructions of the California Department of Health Services."

Already, Lambert said, nine other HME companies have pledged to pay into a legal defense fund should one become necessary.

While the issue currently affects only power wheelchair providers, stakeholders are fearful that it could spread to encompass all of HME.

"Theoretically, it could apply to anything," Achermann said.

Lambert believes it will. "The ones that haven't been hit yet, it's just a matter of time," he said.

Lambert, who has been in business since 1989, doesn't really relish having another battle on his hands. In 2003, he sued HHS for requiring additional documentation beyond a CMN for K0011 claims. A U.S. District Court judge sided with Lambert in a June 2005 decision. HHS appealed that decision; the appeal is still under review in the 9th District Court of Appeals.

It will take some months, perhaps years, before that case is finally resolved, Lambert said.

Ironically, he has worked to pare his reliance on Medicare revenue and now deals more with Medi-Cal. But Lambert has no intention of giving up on HME.

"I chose when to get into this business and I'll choose when to get out," he said.

For details of Lambert's fight with the government over power chair CMNs, see HomeCare Monday, July 12, 2004.