VGM`s Last Chance For Patient Choice Files Competitive Bidding Lawsuit

Hewitt, et al v Michael O. Levitt & Leslie V. Norwalk

A lawsuit was filed June 12 in Federal court against CMS seeking to stop competitive bidding for durable medical equipment. The suit was filed June 12, 2007, in the Dallas Division of the U.S. District Court for the Northern Division of Texas. (Case 3:07-cv-01038)

(To view the complaint, click here. )

Plaintiffs in the suit include three Medicare beneficiaries from the Dallas area , Gregory H. Hewitt, Jose M. Salas Jr., and C.W.Bell, and three home medical equipment providers, also from the Dallas area, Oxyonly, Inc., d.b.a. Procair Inc., M.S.B., Inc., and Cardiorespiratory Home Systems.

The VGM Group, Inc. announced it is assisting with the lawsuit filed against CMS concerning the new competitive acquisition program for durable medical equipment.

Dallas is one of 10 metropolitan areas selected by CMS for the first round of the competitive acquisition schema mandated by the Medicare Modernization Act. The MMA had, as its main and famous feature, the creation of a prescription drug benefit for Medicare beneficiaries. There is at least one bill pending now in Congress that would substantially alter the MMA provisions related to this program.

The competitive acquisition program being implemented by CMS creates two tiers of health care for America’s seniors. In most of the country, seniors who need medical equipment are free to select their equipment provider and equipment providers are required to compete aggressively to earn that business by offering quality products, services, support and assistance.

Going forward, in the 10 cities with the competitive acquisition experiment, federal bureaucrats, not seniors, will determine which equipment providers are allowed to provide seniors with the equipment they need. This eliminates choice, leads to a lower quality of care and introduces a whole new level of federal bureaucracy to the healthcare system.

The vast majority of Durable Medical Equipment (DME) providers are independently owned businesses. They supply a wide variety of products and services to the elderly and disabled, including oxygen, wheelchairs and other mobility, therapy and function-related devices.

The lawsuit seeks an order stopping the program principally under a claim that the competitive acquisition scheme is illegally discriminatory in its effect on both beneficiaries and providers. The act and rules subsequently adopted by CMS will require providers to “bid” in order to continue to provide services and equipment to Medicare beneficiaries.

This requirement breaks new ground for Medicare, which had always based reimbursement for services and equipment to beneficiaries on “prevailing prices” in the marketplace that it was free to determine and specify to the providers. The suit claims that forcing bidding under the rules adopted will, necessarily, force down the level of services provided to this select group of Medicare beneficiaries and eliminate many providers, and a disproportionate number of smaller providers, to their detriment and to the detriment of the populations that they now serve.

Jim Walsh, president and general counsel of VGM Group, Inc. said, “This forced ‘race to the bottom’ in service and quality is not what the overall Medicare law is structured on or what beneficiaries deserve. It is certainly not what anyone wants to happen to health care in this country. The winners in this new system will be the providers that can quickly reduce the level of services provided and substitute cheap low-quality products for the high-quality products the system now allows them to provide to seniors — both Medicare beneficiaries and others. The losers will be seniors and their families and the companies that continue to provide high-quality services and products. ”

The litigation is supported by VGM Group, Inc. and Last Chance for Patient Choice, a Section 527 organization formed to educate the public and others on the problems of “low-bid” medical care and help fight the bidding systems mandated by the MMA.

LCPC President Mike Mallaro adds, “We understand from our attorneys that this will be a difficult and uphill fight for us in the courts. We feel strongly that this is very bad legislation and bad public policy and we simply cannot allow it to go unchallenged in the court system. We don’t want to end up with a healthcare system where government bureaucrats are making the decisions about which medical providers can serve seniors based on low bid. Seniors don’t want the low bidder for medical equipment or hip replacement, they want a qualified and compassionate provider will to offer service at a fair price.

“People deserve to pick their own health-care providers, not forfeit that right to choose to federal bureaucrats who make theses selections based on willingness to do less and be paid less. Medicare beneficiaries deserve to be treated like everyone else who receives medical care and not as second-class citizens. It has to be stopped.”

The plaintiffs are represented in the suit by the firm of Brown and Fortunato, Amarillo, Texas.

For more information, call

Jim Walsh, 319-290-6510 or

Mike Mallaro, 1-800-642-6065

To view the complaint, click here.