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poor reimbursement on supplies: what's the answer?
Some health insurance companies pay so poorly for CPAP replenishment supplies that DME dealers avoid such transactions. The result is that xPAP users employ masks, etc. longer than specs call for, or xPAP users end up paying out of pocket for replenishment supplies. What's an equitable solution?
Views: 93
Replies to This Discussion
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Permalink Reply by Mike on
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fascinating post, Rock. is it that the DME loses money, or is it that they just don't make enough on the replacements?
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Permalink Reply by Rock Conner RRT on
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It varies. I have seen contracts that reimburse less than some items cost the DME dealer to even purchase, much less the costs of overhead, etc. Most contracts exceed the cost of each item, but some by as small as 5%, allowing no overage for the usual costs of operating a business like paying employees, shipping, etc. Much more than the cost of each item to be sold must be accounted for.
Mike said:fascinating post, Rock. is it that the DME loses money, or is it that they just don't make enough on the replacements?
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Permalink Reply by sleepycarol on
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Okay.
But what about the cpap machines themselves? It seems that for what the majority of the DME's charge for a barebones machine that is not data capable they are making what appears to be a significant amount from the insurance companies. I know my machine (an M series apap) was paid for by the insurance company for a little over $1000.00. The same machine is nearly half on line. Yes, I know that the on line stores do not have the overhead but it that still seems like a significant profit. If I would have stayed with my first DME THAT (they provided an M series Plus) machine would have been around $300.00 on line -- and since the billing code is the same for any cpap -- from a barebones machine to a fully data capable machine who is profitting from this?
I recently picked up a mask from my local DME -- every item in the box was charged to my insurance company -- the seals, frame, headgear. This increases the cost to the insurance companies. When you purchase out of pocket on line you get to all the seals, frame, headgear, etc. for one price. I do have to admit at this point I do not know what the insurance paid as I haven't received the statement -- but the DME did send me a bill stating that I owe them $50.00 for my copay for this mask. My deductibles were already met, etc. so insurance would have paid 80% with my part being 20%. If my 20% is $50.00 how much did the insurance pay for this mask? It had to be over $200.00 if I figured it right.
The ONLY time the DME has contacted me about my therapy was -- ummmm let's see -- oh that is right never!!! They never called to see if I was having any issues or anything so I don't buy into the theory that their expenses are driven up by checking on patients. Cause it doesn't happen here -- they don't seem to care!!
I know you seem like a really great guy and I am glad you are here to help us understand your side of it. So please give us additional details other than the insurance companies are shafting the DME because from where I am sitting that isn't happening.
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I think it would be fine for DMEs to just tell us that you get XYZ covered by insurance, but if you want XYZ plus, say, service of any sort, that'll cost $x. i just want them to be upfront with me so i can make an informed decision this business about keeping stuff secret from patients has to stop.
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by the way, I think Rock might just be responding to my request that he expand on a point he made in one of his earlier posts about replacement supplies. i'm not sure he's taking a position on the DME policy one way or another...
sleepycarol said:Okay.
But what about the cpap machines themselves? It seems that for what the majority of the DME's charge for a barebones machine that is not data capable they are making what appears to be a significant amount from the insurance companies. I know my machine (an M series apap) was paid for by the insurance company for a little over $1000.00. The same machine is nearly half on line. Yes, I know that the on line stores do not have the overhead but it that still seems like a significant profit. If I would have stayed with my first DME THAT (they provided an M series Plus) machine would have been around $300.00 on line -- and since the billing code is the same for any cpap -- from a barebones machine to a fully data capable machine who is profitting from this?
I recently picked up a mask from my local DME -- every item in the box was charged to my insurance company -- the seals, frame, headgear. This increases the cost to the insurance companies. When you purchase out of pocket on line you get to all the seals, frame, headgear, etc. for one price. I do have to admit at this point I do not know what the insurance paid as I haven't received the statement -- but the DME did send me a bill stating that I owe them $50.00 for my copay for this mask. My deductibles were already met, etc. so insurance would have paid 80% with my part being 20%. If my 20% is $50.00 how much did the insurance pay for this mask? It had to be over $200.00 if I figured it right.
The ONLY time the DME has contacted me about my therapy was -- ummmm let's see -- oh that is right never!!! They never called to see if I was having any issues or anything so I don't buy into the theory that their expenses are driven up by checking on patients. Cause it doesn't happen here -- they don't seem to care!!
I know you seem like a really great guy and I am glad you are here to help us understand your side of it. So please give us additional details other than the insurance companies are shafting the DME because from where I am sitting that isn't happening.
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I agree Mike!!
I purchase some of my items out of pocket and if the DME would just tell us what some of the cost is -- say by pass the insurance companies because I DO know they can be a pain to deal with -- I wouldn't mind paying.
An example is the fine filters. If they would charge an xx amount and you knew the exact cost without the insurance and you could by say 3 months worth at a time it would appear everyone would come out ahead. The DME wouldn't have to fool with the insurance company and wait for their money, the consumer would know the exact charges etc.
Same with the masks if they would charge say 1/3 more than online dealers (just a number I pulled out of my head) and you could save withOUT the insurance I wouldn't buy on line. I would go directly to the DME so I could see what I was buying. The way I am doing is paying out of pocket for all but 2 of my masks and doing it online due to the DME costs. I can't afford to pay their prices. Another idea might be to say charge what the insurance allowance is plus a percentage over and let the consumer payout of pocket and they wouldn't have to hassle sending a claim.
I don't know if I am making myself clear. My thoughts are to bypass the insurance companies all together and pass the savings to the consumer when they pay out of pocket.
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I agree with Mike: Tell me what my insurance covers & what options I have for upgrades. One problem is that at times health insurance companies are unclear about what they will pay, & in fact sometimes DME dealers don't know exactly what they will be paid until they are actually paid. I know that's a crazy way for DME dealers to have to do business, but welcome to our world.
I also agree with Carol: The price difference between brick & mortar DME dealers & online DME dealers seems outrageous from the outside. Here are just three of the many factors that contribute to the craziness:
1) Chasing insurance patient copay reimbursement constitutes 25%of total healthcare expenditures in the US. Put another way, a DME dealer who bills an insurance company for a mask spends 33% of the cost of the mask just to get paid. That's a big cost that inline DME dealers don't have to face.
2) If a DME dealer accepts Medicare or Medicaid assignment, that is if a dealer agrees to accept Medicare or medicaid reimbursement rates, saqid dealer can charge neither more nor less for a product than the Medicare or Medicaid allowable. that makes a free market guy like me nutso! the online DME dealer, on the other hand, can charge whatever the market will bear -- as it should be.
3) Another problem facing brick & mortar DME dealers is that in order to hold cash longer, health insurance companies routinely deny a predermined percentage of claims. The cost of that practice is shifted to your friendly neighborhood DME dealer.
I advise patients to make use of health insurance when it makes it easier on their pocketbook. In the event that they find themselves needing to pay money out of pocket & unreimbursed for CPAP products, I send them to the Internet. Our business model does not require me to squeeze every possible dime out of every encounter.
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Good points Rock!!
That is why I made the suggestion of somehow by passing the insurance company and dealing with a cash and carry client. I go in and pay cash for my supplies for a reasonable cost and no hassles collecting with the insurance company. It seems (I do not own a business nor have I ever owned a business so don't know all the ins and outs) like some items would be better serviced that way.
Insurance and the way they do business needs a complete overhaul.
I know several years ago our dentist was really in a snit when I went for my appointment. Since we were friends I asked what the problem was -- he had a family that was on Medicaid that morning. He worked on several of their teeth (more than one in the family) and said he knew they needed services but he was getting so little reimbursement that it forced him to charge his paying clients more to make up the difference. He was really frustrated with the system. I live in a rural area and many of the doctors and dentists no longer will accept the Medicaid patients due to the low reimbursements that they receive.
Do you face those challenges as well?
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That cost-shifting is what I described earlier, only these days the Medicare or Medicaid patient often supplies the greater reimbursement and supplement the poorly paying private insurance patient. In King Henry VI, Shakespeare had a character say, "The first thing we do, let's kill all the lawyers" in preparation for overthrow of the government. Perhaps we could contemplate a similar approach to overthrowing our current healthcare reimbursement system.
sleepycarol said:Good points Rock!!
That is why I made the suggestion of somehow by passing the insurance company and dealing with a cash and carry client. I go in and pay cash for my supplies for a reasonable cost and no hassles collecting with the insurance company. It seems (I do not own a business nor have I ever owned a business so don't know all the ins and outs) like some items would be better serviced that way.
Insurance and the way they do business needs a complete overhaul.
I know several years ago our dentist was really in a snit when I went for my appointment. Since we were friends I asked what the problem was -- he had a family that was on Medicaid that morning. He worked on several of their teeth (more than one in the family) and said he knew they needed services but he was getting so little reimbursement that it forced him to charge his paying clients more to make up the difference. He was really frustrated with the system. I live in a rural area and many of the doctors and dentists no longer will accept the Medicaid patients due to the low reimbursements that they receive.
Do you face those challenges as well?
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Okay here is another question --
It seems that the insurance companies have so many different options that is very confusing for the layperson to know which policy they may need.
Do the different companies reimburse at different rates? Can you give examples of these differences?
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Permalink Reply by Melodie on
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Rock,
I think that the best way to handle this situation would be to send daily emails to your insurance company requesting that they cover the DME supplies, and if that gets no action - then start writing to your State Congressman/woman and go into detail about the situation with them. You always start at the insurance company level with this kind of stuff, and save your emails and their responses, dates, times with whom you have spoken - and then forward the info to your State Congressman/woman and go from there.
I am hoping that our President-elect will take more serious action on the benefit of our country as far as Health Care is concerned and put into place some much needed legislation for our country's Health Care System and Health Insurance. If not, we are going to be in big trouble, as there are many people that go without treatments for this same reason - and not just for sleep apnea, but for various health conditions!
Hope this is helpful in some way,
Melodie
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Oh, the insurance companies pay at vastly different levels. Moreover, Insurance Company A (ICA) may pay pretty well in Ohio, but below DME dealer cost in Mississippi. Another twist is that ICA may reimburse pretty well for CPAP under its POS products, but below dealer cost in its HMO products. More confusion is caused when ICA pays pretty well for a given product line like CPAP, but doesn't pay worth a darn for oxygen. ICA's competitor, Insurance Company B (ICB), may pay quite well for oxygen, but below dealer cost for CPAP. It's a byzantine maze worthy of M. C. Escher! This deliberate complexity makes it nearly impossible for consumers to know which package is best for their anticipated needs, so they just compare premiums, deductibles & copays, then hope for the best. And the health insurance companies laugh all the way to the bank.
Bur the ICAs & ICBs of the world are not evil. They exist not to serve their customers, but their shareholders. Any of us who have IRA, 401k or 403b accounts, or participate in corporate retirement plans are undoubtedly indirect investors in health insurance companies. That means we suffer from health insurance practices as patients, but benefit from those same practices as investors. This is Michael Crichton & Stephen King stuff!
sleepycarol said:Okay here is another question --
It seems that the insurance companies have so many different options that is very confusing for the layperson to know which policy they may need.
Do the different companies reimburse at different rates? Can you give examples of these differences?
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