Federal Judge Rules Breach of Contract in DME Bidding Suit

Medical supply company CardioSom, LLC has prevailed in its lawsuit against the U.S. government, paving the way for some 300 other providers to follow suit, HME News reports

Chief Judge Patricia Campbell-Smith of the U.S. Court of Federal Claims recently ruled that the government was in breach of contract when it rescinded contracts in the original Round 1 of the Centers for Medicare & Medicaid Services’ (CMS) competitive bidding program.

The ruling came less than two weeks before the six-year statute of limitations for the lawsuit was set to expire July 14. CardioSom originally sued in the Court of Federal Claims in 2008 after Congress delayed the bidding program for 18 months, rescinding its contracts and those of about 300 other providers. 


This terminated CardioSom’s three-year contract for the supply of oxygen, respiratory equipment and sleep disorder treatment supplies in nine designated areas. 

But the recent ruling will allow other providers who had their contracts rescinded to file a lawsuit seeking damages. 

“Any other company that wants to take advantage of this has to file a lawsuit prior to the expiration of the statue of limitations,” says CardioSom attorney Jerry Stouck, of Greenberg Traurig LLP. “I would suspect that there are companies out there that don’t know they have the right to legal recourse. On the other hand, they might be perfectly content and have moved on to other things. Six years is a long time.”


In 2008, Congress modified the competitive bidding program for durable medical equipment (DME) and medical supplies established under the 2003 Medicare and Prescription Drug, Improvement and Modernization Act.

Since then, Congress, federal officials and industry professionals have called for new bills to correct flaws in the program and asked for a delay in Round 2

Read the full HME News article here

Written by Emily Study

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