Let's clear up some misinformation

[LTTS]

I've been cruising posts here for awhile, and I have to say I am literally astounded by how much disinformation is posted by certain members here and on a particular person's blog that seems to post here frequently. I don't know where people that post these things got their education about the difference between online suppliers, DMEs and how insurance pays for PAP devices and supplies, but in many cases it is incorrect.

I'm an RCP that got her degree in 1984. I have worked in a sleep lab, then for DME businesses, and now I consult with DME companies on meeting the thousands of regulations that they are required to meet so they can stay within the law. So I have 27 yrs of experience in this field, and am considered an expert on regulatory affairs and reimbursement regulations related to DME. Here are the 3 big things consistently posted that are not supported by facts...

1. That the only difference between DME providers and online PAP suppliers is the service component of a brick and mortar DME.

There are many differences, the chief one being that online suppliers are not regulated. Many dispense PAP products against federal laws that regulate those products as prescription only. In addition, many operate in violation of state laws that require competent personnel and a state DME license to dispense RX only products. They do not have to pass any quality assurance checks. In fact many are simply a guy with a computer in his basement who ships out of his garage. They are not accredited as DMEs are required to be, and they have no obligation to assure that you recieve the proper product, or that it is clean and unadulterated, or that it is authetic instead of as counterfeit as the rolex you can buy at the farmer's market stand. They do not have to employ clinical professionals to meet state regulations, nor do they have to answer the phone 24/7/365 if you have a problem -- all of which are required of brick and mortar DMEs that bill your insurance. Nor in fact do they typically bill your insurance because if they did they would have to follow all of those laws and quality standards, and collect much more medical documentation in order to coax the insurance company to pay the bill.

Online suppliers that do follow federal laws and at least require a prescription MAY be a good solution for those without insurance. But the buyer should always be aware that they are largely if not completely unregulated. The products cost less because they don't have the overhead of following all the additional regulations that come with the ability to bill insurance providers, including Medicare. Like your high blood pressure medication, PAP devices and supplies are life sustaining products, and you can hardly blame your insurance payer for refusing to pay an unregulated business. But yes, there are many costs inherent in meeting the regulations. You can buy high blood pressure medication on the internet as well, but that doesn't mean your pharmacy, that is regulated, is ripping you off because they charge more. And there is no guarantee that what you are getting is actually what is being advertised because no one is regulated them.

2. Patients should not have to pay an upcharge for non-medically necessary features

This one gets repeated a lot, here and on a blog by a frequent poster. Let me be clear, ALL insurance companies that cover DME pay for a basic machine AND THAT IS ALL. Some honestly seem to believe that because all CPAP devices are coded as a E0601 that the patient is entitled to any machine they so desire. By all means, shop around and try to find a DME provider that is contracted with your insurance that will give you the cadillac when your insurance only pays for the ford escort, but the DME provider that refuses to do that is not ripping you off -- those that will give you a deluxe machine for the cost of a basic machine are either willing to make almost no profit to keep you happy or trying to coax your referring physician into sending them more referrals. Or they are just a poor business person that does not understand their cost of doing business.

But under no circumstances is a patient entitled to a deluxe machine. When deluxe feature sets were added to the PAP device line up 15 or so years ago insurance payers refused to authorize a separate code for devices with the added feature set because they (rightly) determined that these added features were not a medical necessity. Patients might like them, but there is no medical evidence to support better patient outcomes if you can monitor your AHI, or the machine adjusts the PAP pressure on the fly. At least no evidence that has persuaded insurance payers to increase the payment for devices with these deluxe features, that are in fact more expensive.

Insurance payers do recognize that some physicians and some patients want these deluxe features, and that is why nearly all of them allow the patient to be charged an upgrade fee. In fact Medicare has a very specific process for this called an Upgrade ABN, which is a form you sign that acknowledges that you will pay the difference between the basic machine covered by Medicare and the deluxe machine you desire. The DME is permitted to give you a free upgrade if they so desire, but again, under absolutely no obligation to do so, and is not trying to rip you off if they refuse to do so. They are trying to stay in business in a highly regulated environment with plummeting reimbursement rates.

Another common misconception is that a DME provider must give you a new machine when the payment is on a rental basis. Absolutely untrue. If the insurance company required you to receive a new machine it would have to pay for it as a purchase. However they will not continue the rental payments after 2-3 months (depending on the payer) unless compliance of use is documented. They cannot both require the DME to take back machines of non-compliant patients without further payment, and insist that a new machine be provided. There is not some back room overflowing with used machines of non-compliant patients that are simply thrown in the garbage. Most DME providers do give out new equipment, but there is nothing wrong with following accrediting body approved cleaning and refurb procedures and putting that machine back into circulation.

3. DME make a ton of profit

In reality the DME provider that supplies PAP devices, oxygen, and other respiratory products makes a profit of about 6% on average. The submitted price on the claim is simply the "MSRP" and bears no relation whatsoever to what they actually get paid. The insurance payers want MSRP on the claim so they can take credit for the excellent "discount" they negotiated on your behalf. In addition, Medicare providers are forbidden, by law, to offer a cash discount price in excess of 17% off the Medicare fee schedule.

Also, I've seen at least one frequent poster post that private insurance payers set their fee schedules based on the Medicare rates. That's true, but they pay a percentage of the Medicare rate, as in 70%, 60%, even as low as 43% of the Medicare rates. Seldom is it equal to the Medicare rate. How do you think they rake in the billons of profit they rake in? Some posters imply that DME providers are getting Medicare rates across the board. Untrue -- 80% or more of their revenue for PAP is non-Medicare insurance, with fee schedules not even close to what Medicare pays.

In the 27 years I have been in this business I have seen reimbursment rates decrease by 50% or more, while DME providers costs and the regulations they are subjected to increase and increase. DME providers are going out of business, and this is creating access to care issues in many areas of the country. The new Medicare competitive bidding program that is in effect in 10 areas now, and slated to be in effect in 90 more areas in 2013 will reduce reimbursement another 25%. Fifty percent of the independent DMEs will go out of business within a year of that occuring. And that means that the corporate DMEs that have enough money to skate past the regulations (or are willing to pay the fines for violating them as a cost of doing business) will be all that is left to patients.

No one will be there to care if your mask is not fitting correctly, or if your pressure setting needs adjusted. No one will care if you need something past business hours. No one will use RCPs to instruct you on the proper, safe and compliant use of the device.

Last but not least, patients should be aware that Medicare does not pay the monthly fee schedule amount for the entire 13 months. In the 4th through the 13th month they pay 75% of the 80% of the allowable. So as a rule of thumb, take the monthly amount x 80% and then multiply that by 10 and that is the total amount Medicare will pay for a rental item over the course of 13 months.

[BlackSpinner]

Wow on that mis information spam!

Most of the so called mis information is due to members experience with so called professionals.

You know where I grew up the term "professional" was used for streetwalkers. With respect to most DME's that would be a slur on your average streetwalker, they at least provide service.

[Guest]

You're preaching to the choir about the evil of hymns.

[Guest]

You're preaching to the choir about the evil of hymns.

This was aimed at the original poster, of course, not responses.

[ltts]

Wow on that mis information spam!

Most of the so called mis information is due to members experience with so called professionals.

You know where I grew up the term "professional" was used for streetwalkers. With respect to most DME's that would be a slur on your average streetwalker, they at least provide service.

Can you point to anything I posted that is factually incorrect? Because I took great pains to clear up some of the factually incorrect information that seems to be frequently posted here. I'm just wondering if you can point to anything I posted that you think is wrong, because I can certainly back up everything I posted.

[BlackSpinner]

Wow on that mis information spam!

Most of the so called mis information is due to members experience with so called professionals.

You know where I grew up the term "professional" was used for streetwalkers. With respect to most DME's that would be a slur on your average streetwalker, they at least provide service.

Can you point to anything I posted that is factually incorrect? Because I took great pains to clear up some of the factually incorrect information that seems to be frequently posted here. I'm just wondering if you can point to anything I posted that you think is wrong, because I can certainly back up everything I posted.

How about most points? Those may be the rules but very few follow them.
Welcome to the real world of patients.

[Guest]

Wow on that mis information spam!

Most of the so called mis information is due to members experience with so called professionals.

You know where I grew up the term "professional" was used for streetwalkers. With respect to most DME's that would be a slur on your average streetwalker, they at least provide service.

Can you point to anything I posted that is factually incorrect? Because I took great pains to clear up some of the factually incorrect information that seems to be frequently posted here. I'm just wondering if you can point to anything I posted that you think is wrong, because I can certainly back up everything I posted.

How about most points? Those may be the rules but very few follow them.
Welcome to the real world of patients.

If you don't think a DME provider is following the rules you have a mandated process and every right to lodge a complaint with their accrediting body. Just ask them who they are accredited by and ask them to provide the phone number to that accrediting body and call them and lodge a complaint. Every single complaint is followed up on by all approved accrediting bodies.

The point of my post is that some folks here seem to think that DMEs have to do things like provide deluxe machines or give you new items on rental that they are under no obligation to do. And certainly not rules you would expect an online provider to abide by. What rules, specifically, do you feel were not followed by the DMEs you have had experience with? My company has helped over 1200 DME providers meet regulatory guidelines, so I certainly know what the rules are. Which do you feel were not followed by your DME?

[Elle]

It's a conspiracy. We all got together and said "Let's make up stories about DMEs"

[jedimark]

Responding to a troll, but what the hell.. (@the original poster, I don't want to replicate their bullocks)

I have something I'd like to express to you and people like you.

Firstly, monitoring more than just data compliance has been found to be the KEY to getting a handle on CPAP treatment..

There are THOUSANDS of CPAP users who are willing to testify on this.. Not just on this site. Plenty of others.. If you learned how to use Google, you'd have more of a clue.

This fact alone totally defecates over useless studies which are performed with MUCH lower sample audience.. We don't just want data capable machines, we simply DEMAND them.

If you are too incompetent to realize how important it is to involve the patient in this treatment, you're both a fraud, and in the wrong business.

Being sold a non data capable machine is slap in the face of people already dealing with a crappy medical condition. The fact that you call being able to monitor this a luxury shows how out of touch you are with reality..

Now please post where your from so we can boycott your crappy organization..

[Elle]

When I towed the DME line I spent 5 plus years at the wrong pressure (at least 5 points under).

Diagnosed in 2006 and basically starting to finally get treatment with newly acquired data capable machine a month ago.

[ltts]

It's a conspiracy. We all got together and said "Let's make up stories about DMEs"

I don't think you make up stories -- I think you made rules that don't exist, and make no sense. If you rent a car do you think you'd get very far if you demanded a new car that had never been driven before? Your insurance company only wants to pay for an economy car if you get in a wreck with your family auto. Is the rental care place ripping you have if they won't provide a cadillac for the price your insurance company is willing to pay?

In fact, insurance companies pay NOTHING for the service component and none that I know of require that you receive any service at all. So who is to blame when they set reimbursement rates based on the cost of the product, only? The DME or the insurance provider you or your company is paying $500 plus dollars to a month? I think you're mad at the wrong people in this equation.

[Elle]

My insurance company just paid my DME $2205. for my Resmed S9. I think the DME made a bit on that.

[BlackSpinner]

It's a conspiracy. We all got together and said "Let's make up stories about DMEs"

I don't think you make up stories -- I think you made rules that don't exist, and make no sense. If you rent a car do you think you'd get very far if you demanded a new car that had never been driven before? Your insurance company only wants to pay for an economy car if you get in a wreck with your family auto. Is the rental care place ripping you have if they won't provide a cadillac for the price your insurance company is willing to pay?

In fact, insurance companies pay NOTHING for the service component and none that I know of require that you receive any service at all. So who is to blame when they set reimbursement rates based on the cost of the product, only? The DME or the insurance provider you or your company is paying $500 plus dollars to a month? I think you're mad at the wrong people in this equation.

No body "rents" a xpap machine. You rent to own - just like you LEASE a car to use your analogy. If you LEASE a machine that doesn't do what what was promised in the lease or has a warranty issue you get things replaced - with an apology. You also get a manual with that car by the way and fuel gauges and millage gauges. If you think it is safe to drive a car without those and modern safety equipment you are and idiot. In fact comparing DME's to used car salesmen is an insult to car sales men. They at least know what they are selling.

[ltts]

Responding to a troll, but what the hell.. (@the original poster, I don't want to replicate their bullocks)

I have something I'd like to express to you and people like you.

Firstly, monitoring more than just data compliance has been found to be the KEY to getting a handle on CPAP treatment..

There are THOUSANDS of CPAP users who are willing to testify on this.. Not just on this site. Plenty of others.. If you learned how to use Google, you'd have more of a clue.

This fact alone totally defecates over useless studies which are performed with MUCH lower sample audience.. We don't just want data capable machines, we simply DEMAND them.

If you are too incompetent to realize how important it is to involve the patient in this treatment, you're both a fraud, and in the wrong business.

Being sold a non data capable machine is slap in the face of people already dealing with a crappy medical condition. The fact that you call being able to monitor this a luxury shows how out of touch you are with reality..

Now please post where your from so we can boycott your crappy organization..

All recent PAP devices are data capable. They ALL monitor usage. And you are correct that service component is important. And if your DME company is not providing the service you require you should seek another. But I am correct that no insurance company cares enough to pay for it. Nor do they care enough to pay for the deluxe features that many here seem to feel they are entitled to.

It's the insurance payers you should be trying to convince. DME providers would love to convince them of that as well. I've been in meetings between insurance payers and DME providers making exactly the case you are stating here, but guess what? They don't care.

But I wonder if you go to McD's and demand a big Mac for the price of a cheeseburger. Or go to the Ford dealer and insist they give you a loaded car with a navi system for the price of a basic escort? You wouldn't even dream of it, right? So why, pray tell, do you think a DME provider should give you a high end device when your insurance will only pay for a basic model?

That's the mystery.

[idamtnboy]

Several months ago there was a thread about administrative pricing for DME goods. Here is what I wrote back then. Take particular note of my last sentence.

The comments by others about the DMEs need to get their own house in order first is right on. How can politicians and the public not believe that DMEs are getting fat off taxpayer money when we look around at the entire medical industry and see marble palace hospitals being built, physician practices setting up expensive MRI and DNA labs, medical groups practicing in fancy brick high rise office buildings in the priciest parts of the city, and on and on? And we look at the EOBs from every medical provider and see them accepting as full payment reimbursements as low as 15% of the billed amount. Who's gouging who? Are reimbursers gouging the providers, or do providers gouge the poor souls who have to pay their own medical bill? The medical industry has a serious image problem, and DMEs are caught up in it, rightfully or not.

This thread is at viewtopic.php?f=1&t=65268&p=609726&hilit=+image#p609726.