HCFA gets green light for Polk County project
By MATTHEW HAY
HHBR Washington Correspondent
TAMPA The Health Care Financing Administration (HCFA; Baltimore) will move ahead with its competitive bidding project in Polk County, FL.
HCFA got the green light last week when U.S. District Judge Susan Bucklew rejected the recommendation of U.S. Federal Magistrate Mary Scriven to impose a temporary injunction based on evidence that the agency had violated federal rulemaking requirements.
The decision is a major blow to durable medical equipment (DME) suppliers who believed that Bucklew would accept Scriven’s March 10 recommendation in favor of a temporary injunction. The DME industry was hoping for a temporary injunction, or even a more long-term injunction, to derail the project, which it has long opposed. But HCFA claimed it was not surprised by the outcome of the decision and said the legal maneuver did not slow its plans for implementing the demonstration. "It is not a major turnaround for us," said HCFA spokesman Craig Polaski. "We said all along that we plan to proceed with the demonstration and that is what we have been planning to do and doing."
The Florida Association of Medical Equipment Dealers (FAMED; Orlando, FL) and two Florida DME companies filed suit in Florida federal court in early February contending that HCFA had established and utilized an advisory committee, called the National Technical Expert Panel (NTEP). This was in violation of the Federal Advisory Committee Act (FACA), which requires that HCFA give all interested parties "proper notification" regarding advisory committee meetings.
On March 10, Scriven endorsed nearly every argument advanced by FAMED. But HCFA filed an objection March 18, arguing that she had erred in concluding that FAMED possessed the "standing" required to request that relief. Bucklew agreed. "Because this is a question of the court’s power to grant the requested relief, it must be addressed prior to a consideration of the merits," ruled Bucklew.
Bucklew determined that NTEP does not represent "an ongoing FACA violation" and noted that all sides agree the NTEP ceased operating after its third and final meeting in September 1997. "What injunctive relief can the court fashion to redress a violation that has ceased and that does not threaten to reoccur in the imminent future?" stated Bucklew. "It goes without saying that the plaintiffs lack standing to request a more dramatic injunction that would enjoin the defendants from proceeding with the competitive demonstration project which is already under way," she added.
Polk County consists of roughly 92,000 Medicare beneficiaries in a total population of roughly 450,000. In 1997, Medicare paid $9.6 million on behalf of about 4,500 Polk County beneficiaries for the types of equipment and supplies included in the demonstration. Nationwide, Medicare paid about $6 billion for equipment and supplies. About half was for items included in the demonstration, such as oxygen, hospital beds, and enteral nutrition. The more immediate concern of many in the DME industry was that HCFA will now try to use the bids that were due March 29 as a baseline for reimbursement reductions.
HCFA recently reminded DME suppliers that beneficiaries may maintain an ongoing relationship with any oxygen supplier even if they are not selected under the demonstration. "Such suppliers will be paid at the price set by the bidding process," according to HCFA. "Beneficiaries with existing rental agreements for enteral pumps and hospital beds may continue to deal with their current suppliers, whether or not they are demonstration suppliers. In these cases, suppliers will be paid the prevailing rate rather than the bid price."
The prevailing rate is being accepted under this provision of the demonstration because startup of new rental agreements would be costly to the Medicare program.
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