Urgent Action Still Required to Stop Demo Project Once and for All!

BREAKING NEWS:

Southern California District Judge Thomas Whelan yesterday granted a preliminary injunction requested by four San Diego laboratories to halt the Centers for Medicare & Medicaid Services (CMS) from proceeding with a proposed demonstration project to test the viability of competitive bidding for laboratory services performed under Medicare. The Judge’s order prohibits CMS from announcing bid winners; implementing or carrying out the demo in San Diego; and disclosing any information included in the bid applications.

The injunction is to stay in place until further order of the court. According to an attorney that helped prepare an Amicus Brief with the Court, the judge found that the labs had shown irreparable harm and that there would be substantial economic injury to the labs and harm to patients, noting that hospital labs would have to set up costly procedures to determine which tests were included and which were not.

Moreover, the court noted that the balance of hardships tips "sharply" in favor of the plaintiffs. The Judge pointed to the fact that the Secretary of Health and Human Services (HHS) could not identify any hardships that "even remotely rival those identified by plaintiffs." Noting that the preliminary injunction will simply delay the implementation of the project for a period of months, the court determined that since it has taken CMS five years to implement the demo, a few more months would not matter. The delay would be in effect until a full trial on the merits, which conceivably could take more than a few months.

Finally, the court finds that the labs are likely to succeed on the merits. First, the Judge agrees that this should have gone through rulemaking, finding the types of notice procedures used over the development of the demo were not sufficient. In addition, the Judge found that the Secretary acted arbitrarily and capriciously.

ACTION ALERT:

Although the court’s ruling is a huge victory for ASCP and others in the laboratory community who have long maintained that competitive bidding posed irreparable harm to patients and to the laboratories, it does not represent the finality of our efforts. The ruling, as indicated above, is a delay. The laboratory community must continue to work towards a repeal of the demonstration project. Therefore, ASCP continues to urge the laboratory community to take a few minutes to help halt this potential danger to laboratory medicine and the patients we serve.

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