The U.S. government was dealt another setback Tuesday in a long-running breach of contract dispute over congressional legislation forcibly terminating hundreds of Medicare medical equipment contracts when a Federal Claims judge held that the suing companies are not bound by administrative remedies.
Federal Claims Judge Patricia Campbell-Smith relied in large part on past court findings refusing to toss claims that trace back to the July 2008 passage of the Medicare Improvements for Patients and Providers Act. That measure terminated Center for Medicare & Medicaid Services contracts awarded a month before to roughly 300 durable medical equipment suppliers, but Judge Campbell-Smith ruled Tuesday that it doesn't preclude the consolidated lawsuit from 14 of those companies.
Jerry Stouck, an attorney for some of the plaintiffs with Greenberg Traurig LLP, said Wednesday that the MIPPA was passed amid an outcry from local equipment suppliers fearful that the CMS plan to consolidate the Medicare contractors within geographic regions would put those companies that didn't win a contract out of business. Stouck told Law360 he wasn't surprised by the decision.
“It's the latest in a series” to reject the government's arguments, Stouck said, adding that Congress cannot call off the contracts without paying damages.
