A San Diego judge ordered a preliminary injunction on Tuesday, April 8, against the Medicare competitive bidding demonstration project. This ruling is in response to a motion filed by three area laboratories--Sharp Healthcare, Scripps Clinic, and Internist Laboratory—that are seeking to stop the Centers for Medicare & Medicaid Services (CMS) from implementing the project.

Under Judge Thomas J. Whelan’s decision, CMS is enjoined from announcing the winners of the competitive bidding demonstration project for lab services, which was scheduled to occur on Friday, April 11. In addition, CMS is not allowed to disclose any information included in the bid applications submitted in connection with the project.

This latest decision comes days after Judge Whalen, of the U.S. District Court for the Southern District of California, ruled that the labs had jurisdiction in the case. He also ruled that the labs had standing to bring the suit because the demo’s required bidder design obligated them to submit bids (as CMS required last Feb. 15) and they are “now threatened with the prospect of losing the ability to participate in Medicare. Thus, far from being an ‘abstract disagreement,’ plaintiffs have felt the effects of the agency’s decision in a concrete way.” In addition, he rebutted CMS arguments that the labs should seek administrative remedies before suing, noting that if they lost, they could not bill Medicare and thus would have no such remedies available.

The lab bidding demo, which Congress required in the Medicare Modernization Act of 2003, is designed to see if competitive bidding can be used to pay for independent lab services at rates below the current Part B lab fee schedule.