Medicare Fraud

[Arizona-Willie]

My DME seems to have been bought out by another company.
When I called in a week ago they had changed their name.

So I ordered a cushions for my Quattro and some filters for my S8.

What do I get?

Of course I get a Mask frame

and the cushions

and a hose

and filters.

And a copy of the bill for $489.25 which they send to Medicare and my secondary insurance.

Not only do they send stuff I didn't ask for, the prices are wildly inflated.
And the break down one thing into three and charge separately for each.

I just checked and you can buy the Quattro mask and cushion and headgear for $144.00 on cpap.com and they charged $414.89.

The strange thing is, people in Medicare and the various insurance companies HAVE to know they are being ripped like this.
It cuts into their profits terribly and inflates the rates people have to pay.

We need some powerful Senator to stop this --- but they are all on the take from the insurance and medical industry so they won't do anything either.

Anyone have ideas how to get these crooks?

[Madalot]

Well, I don't know about anyone else, but when I get a bill from any medical provider, including my DME, they list both their charge (usually fairly high and frequently inflated), then the allowable charge. I think as long as the coding is done correctly, they can try to bill Medicare for $1000 for this stuff, but they won't receive it because it is over the allowable charge.

Now of course, if they're changing the coding, that could be a serious problem.

[jules]

What you saw has been done for years. Nothing new. It is part of why I dumped my DME.

[Madalot]

And it's a reason why people that legitimately need help and services have to jump through so many hoops to get what they need.

[ecocyber]

I am sure there are some bad apples out there; but you need to understand something about how Medicare billing works. I know because I used to own a DME. (1) The DME must use the codes that are set up by Medicare for billing or they will not get paid one cent. (2) The DME has no input in the process that Medicare uses for establishing codes. This is done internally with the information sent to them by the manufacturers. (3) It has been a frustration of mine for a long time that usually "assemblies" are not always coded. Usually a mask is made up of all it's constituent parts. It certainly is wrong of a DME to supply things you haven't asked for, but for first time set ups, usually the only way to bill and get paid is to use the individual part codes established by Medicare. Again, your DME has nothing to say about the establishment of the codes they must use. (4) As someone already pointed out, Medicare only pays 80% of the allowable for an item. The other 20% can be billed to your secondary if you set that up with them properly. But remember, the most a DME will get paid for an item, any item, is the allowed price. They could bill Medicare for $1,000 for a mask frame, and only receive payments from Medicare based on the allowable. Now, as for the allowable. Per Medicare guidelines, the allowable is usually set at a price that will theoretically allow the DME to make a small profit. After all, they need to pay there bills, right? But, that amount is determined by Medicare and the manufacturer. My experience on this point is that Congress usually cuts the allowables below that recommended by Medicare as part of their frequent and never ending cost savings legislation (as they spend irresponsibly on new pet programs and entitlements). So, the DME usually ends up receiving less than that originally proposed by Medicare. Unless something has changed that I am not aware of, the DME provider has absolutely no input in determining the allowable. Or if anything, we used to be able to submit comments on proposed reimbursement tables; but I never saw a case where a DME was successful in changing the allowables that were eventually published.

I am not trying to defend the practices of every DME out there. As I said there are some bad apples that need to be weeded out if they are doing fraudulent things. But, as you can see the DME is probably not the one you should be directing your anger toward. Service another matter. You certainly have every right to complain if you aren't receiving the service you expect. But, if you have a problem with the amount of the allowable for any given item, you should take that up directly with Medicare. And don't forget, Medicare has established channels for reporting suspected abuse or fraud. If you feel your DME is doing something fraudulent, then by all means report it. But, first make sure you understand who sets the prices you see. It isn't the DME. So, I think you might want to give them the benefit of the doubt before directing all frustration with the system at them. Just my two cents. Go ahead and flame away at me if this isn't what you want to hear; but these are the facts. You won't see me responding to any flames anyway......I don't have the time nor the patience.

[Madalot]

I am sure there are some bad apples out there; but you need to understand something about how Medicare billing works. I know because I used to own a DME. (1) The DME must use the codes that are set up by Medicare for billing or they will not get paid one cent. (2) The DME has no input in the process that Medicare uses for establishing codes. This is done internally with the information sent to them by the manufacturers. (3) It has been a frustration of mine for a long time that usually "assemblies" are not always coded. Usually a mask is made up of all it's constituent parts. It certainly is wrong of a DME to supply things you haven't asked for, but for first time set ups, usually the only way to bill and get paid is to use the individual part codes established by Medicare. Again, your DME has nothing to say about the establishment of the codes they must use. (4) As someone already pointed out, Medicare only pays 80% of the allowable for an item. The other 20% can be billed to your secondary if you set that up with them properly. But remember, the most a DME will get paid for an item, any item, is the allowed price. They could bill Medicare for $1,000 for a mask frame, and only receive payments from Medicare based on the allowable. Now, as for the allowable. Per Medicare guidelines, the allowable is usually set at a price that will theoretically allow the DME to make a small profit. After all, they need to pay there bills, right? But, that amount is determined by Medicare and the manufacturer. My experience on this point is that Congress usually cuts the allowables below that recommended by Medicare as part of their frequent and never ending cost savings legislation (as they spend irresponsibly on new pet programs and entitlements). So, the DME usually ends up receiving less than that originally proposed by Medicare. Unless something has changed that I am not aware of, the DME provider has absolutely no input in determining the allowable. Or if anything, we used to be able to submit comments on proposed reimbursement tables; but I never saw a case where a DME was successful in changing the allowables that were eventually published.

I am not trying to defend the practices of every DME out there. As I said there are some bad apples that need to be weeded out if they are doing fraudulent things. But, as you can see the DME is probably not the one you should be directing your anger toward. Service another matter. You certainly have every right to complain if you aren't receiving the service you expect. But, if you have a problem with the amount of the allowable for any given item, you should take that up directly with Medicare. And don't forget, Medicare has established channels for reporting suspected abuse or fraud. If you feel your DME is doing something fraudulent, then by all means report it. But, first make sure you understand who sets the prices you see. It isn't the DME. So, I think you might want to give them the benefit of the doubt before directing all frustration with the system at them. Just my two cents. Go ahead and flame away at me if this isn't what you want to hear; but these are the facts. You won't see me responding to any flames anyway......I don't have the time nor the patience.

No flaming from here I can assure you! Thank you for spelling out what I quickly tried to express in an earlier post. As a Medicare patient, I am sometimes absolutely incensed at how low the reimbursement is for my medical care professionals. I think the medical profession frequently tries to charge WAY TOO MUCH, but insurance reimbursements are WAY TOO LOW. To bad the two haven't learned the art of reasonable compromise.

[Hawk256]

The following is a cut and paste from an online source. I do not know if this information is still current but it does give you a rough idea as to what Medicare pays for each item and the billing code used.

Medicare rents the CPAP/BiPAP unit for 13 months and then the equipment becomes patient owned.
CPAP ............ E0601months 1-3 $101.10 months 4-13 $75.82
BiPAP........... E0470 months 1-3 $232.22 months 4-10 $174.16
Medicare purchases at setup a Heated Humidifier E0562 $272.60
Medicare purchases at setup, a mask system, headgear, tubing, and permanent/disposable filters.
Medicare will allow one mask interface every 3 months.....................A7034 $106.46
Medicare will allow two mask cushions every month.........................A7032 $ 36.68
Medicare will allow two mask pillows/prs every month......................A7033 $ 25.71
Medicare will allow one headgear every 6 months............................A7035 $ 35.97
Medicare will allow one chin strap every 6 Months...........................A7036 $ 14.00
Medicare will allow one tubing every 3 months...............................A7037 $ 36.99
Medicare will allow one permanent filter every 6 months....................A7039 $12.66
Medicare will allow two disposable filters every month......................A7038 $ 4.15
Medicare will allow one humidifier chamber every 6 months...............A7046 $ 17.66
Medicare will allow one full face mask every 3 months......................A7030 $170.72
Medicare will allow one full face cushion every month.......................A7031 $ 63.14

[Hawk256]

No flaming from here I can assure you! Thank you for spelling out what I quickly tried to express in an earlier post. As a Medicare patient, I am sometimes absolutely incensed at how low the reimbursement is for my medical care professionals. I think the medical profession frequently tries to charge WAY TOO MUCH, but insurance reimbursements are WAY TOO LOW. To bad the two haven't learned the art of reasonable compromise.

Any medical professional that does not want to accept the low payments of Medicare or any other insurance do not have to accept Medicare or any particular insurance. The fact that they accept Medicare or particular company's insurance payment tells me that they are happy with that amount. That means that while they are willing to accept X amount they in fact will charge the uninsured up to 10 times(or more) that amount. Who are the real losers? In the end it's always the patient. I'm sorry but I don't feel bad for someone who gets paid what they agree upon and pass their so called "losses" to their uninsured patients.

[pmcall57]

Speaking from the perspective of physicians (not DMEs, I don't know anything about their business) ...

Medicare reimbursement rarely even covers a doctor's overhead. They're not "happy" with Medicare rates, many of them simply feel an obligation, duty, or desire to serve as many patients as they can, so they accept Medicare and swallow the losses.

People seem to forget that most physicians genuinely want to help people, but like all of us are constrained by a health care system that is often dysfunctional. I'm so tired of seeing people demonizing the "greedy" doctors, who make huge personal sacrifices to study and practice medicine. (Did you study non-stop for a decade in order to learn your profession? Are you on call 24/7? Do you make life-and-death decisions everyday, while constantly worrying about being sued? Well, I could go on ...)

And some doctors choose not to accept Medicare, as a business decision. I can't blame them, the reimbursement schedules are ridiculous and actually damaging to patient care. I wish the folks who are touting Medicare as a model for health insurance would get this reality check.

Sorry for the rant, but this really gets me going.

[Arizona-Willie]

I'm not going to flame you.
Relax.

But the mask, headgear and cushion all came in ONE package, oh and there's a travel bag in it too and they somehow missed charging for that.

But, the DME charged separately for each item in the bag ( which carries one number ).
The whole thing came assembled in one unit.

I've had this problem with the DME before, and before they sold out ( or whatever happened ) they had finally started sending me ONLY what I asked for.
But, after the name change and probable buy out, things are back to the same old routine of sending everything they possibly can.
I now have about 4 frames ( which last forever unless you beat on them with a hammer ) and 4 cushions ( which also last a long long long time ). Having multiple cushions is good though. It allows me to change them out if I see one is slobbered up and I can wash several at one time. I have even bought cushions from the auction place out of pocket just to have more. I have disposed of a couple as they got worn.

Somebody in Medicare and the insurance companies MUST be getting paid off. Whoever approves replacing all these items every 3 months that last for years if properly cared for. And who approves charging such outrageous prices.

This bill doesn't show the Medicare approved amount but I will see that in the next quarterly statement they send. I could see it online possibly in a month or two. Guess I could look at some of the past Medicare forms. I scan them all in and fax them to my secondary so I have copies from day one.

Think I'll do that. Will be interesting to see how much the new company has raised the amount they charge ( I know they don't get what they charge but what they get is still probably way more than we can buy the stuff from cpap.com for ). Geesh you'd think English was my 3rd language with that sentence structure.

OK, just took a little break and looked up some old Medicare billings.

When the old DME sent a whole mask they charged $245.23 same as this time -- BUT THEY NEVER CHARGED ADDITIONAL FOR EACH COMPONENT.
This DME charged $245.23 for a mask then charged $104.66 for the cushion then charged $65.00 for the headgear!!

The old DME charged $245.23 for the WHOLE THING then Medicare approved $188.64 and Medicare actually paid $150.91.
I don't know offhand what my secondary paid. I don't scan the copies of the checks they send me .. I just file them. I would have to dig through my filing cabinets to find those payments.

In general, it looked as though Medicare paid approx 61% of the mask charges but up to 70 some % of charges for other things such as a hose. The percentage paid on each item seems to vary.

So the old DME was getting $6 more than Cpap.com charges PLUS whatever my secondary paid.
The new one is really ripping Medicare good it looks like to me. They charged the $245.23 PLUS a cushion PLUS the headgear ( all of which was in the package that the old DME charged $245.23 for ).

Anndddd I just took another break and looked up the payment from my secondary. They paid the OLD DME $37.73 so they got $188.64 total for the mask which is $44.64 more then cpap.com charges and just happens to be the amount Medicare allowed. It comes to 31% more than cpap.com.

Then the extra charges for stuff already in the package are on top of that.

So the semi-honest DME was getting 31% more than you can buy the stuff on the open market for. Legitimately.

I believe I will get in touch with the Medicare fraud unit. Won't do any good, but it probably won't hurt either.

What we need is some national media to expose how much < some > of these DME's mark stuff up and double and triple charge.

Since Congress restricts Medicare to paying only a certain percentage of what the providers bill, I can see why they send bills for such outrageous amounts.
They actually get much less, but still more than the open market --- way way more.

I don't know how much they charge private insurance companies, I've never had commercial insurance.
My union provided medical insurance until Medicare kicked in then it became my secondary.
Being non-profit and self insured is much much cheaper than commercial.

Climbing off my soap box ... all that typing makes me tired ... better take a nap

[Hawk256]

Speaking from the perspective of physicians (not DMEs, I don't know anything about their business) ...

Medicare reimbursement rarely even covers a doctor's overhead. They're not "happy" with Medicare rates, many of them simply feel an obligation, duty, or desire to serve as many patients as they can, so they accept Medicare and swallow the losses.

People seem to forget that most physicians genuinely want to help people, but like all of us are constrained by a health care system that is often dysfunctional. I'm so tired of seeing people demonizing the "greedy" doctors, who make huge personal sacrifices to study and practice medicine. (Did you study non-stop for a decade in order to learn your profession? Are you on call 24/7? Do you make life-and-death decisions everyday, while constantly worrying about being sued? Well, I could go on ...)

And some doctors choose not to accept Medicare, as a business decision. I can't blame them, the reimbursement schedules are ridiculous and actually damaging to patient care. I wish the folks who are touting Medicare as a model for health insurance would get this reality check.

Sorry for the rant, but this really gets me going.

Do you care to address how you charge uninsured patients? Please explain to me how one patient pays $1,700 for a procedure and another patient pays $50,000 for same exact procedure? Why does a single Tylenol cost $16 in a hospital? I would welcome a response for an actual doctor. I personally have a great relationship with all three of my doctors and don't mean to "demonize the greedy doctor". I can only state my opinion based on my and my families past experiences with certain doctors and hospitals. Your mileage may vary.

[Arizona-Willie]

pmcalls57, I'm not really familiar with commercial insurance payments, but I believe they peg them to a certain percentage of Medicare. Could be wrong, probably am.

But Medicare's rates are set by Congressional committees so don't blame Medicare, blame the insurance lackeys in Congress.

Insurance companies are in business to collect money ... not to pay it out.
They view each claim paid as a defeat.

Medicare is the MOST EFFICIENT insurance plan ( with the possible exception of some non-profit self insured organizations ).
Private insurance pays out less than 70% of income.

They spend millions on advertising telling you how good they are and millions more on lawyers to write policies with umpteen loopholes so they have excuses not to pay.

Some insurance companies will even send a salesdroid to your home. That costs mucho dollares. All money not spent on reimbursements.

Every dollar spent on advertising or lawyers or executive bonuses is a dollar that doesn't get spent in reimbusements to the medical professionals.

Medicare has virtually none of that.

Is Medicare perfect?

No.

But it's far far better than whatever is in 2nd place.

Private insurance is nowhere near as good. And, I've been reading where doctors are starting to establish cash only practices.
They don't accept ANY insurance. Not Medicare and not private insurance.

[mattman]

Do you care to address how you charge uninsured patients? Please explain to me how one patient pays $1,700 for a procedure and another patient pays $50,000 for same exact procedure? Why does a single Tylenol cost $16 in a hospital? I would welcome a response for an actual doctor. I personally have a great relationship with all three of my doctors and don't mean to "demonize the greedy doctor". I can only state my opinion based on my and my families past experiences with certain doctors and hospitals. Your mileage may vary.

Two things:

1) I will absolutely disagree with your statement about being "happy" with reimbursement and agree with pmcall's opinion. Having been a DME provider for many, many years I can tell you that reimbursement is a constant battle. Generally speaking you have 2 options: accept Medicare or go out of business. Doctors, hospitals and other referral sources pretty much will only refer patients to a provider that accepts Medicare. So you can choose not to accept Medicare, but you pretty much won't ever get a referral from anyone. Not much of a choice really, is it? Further, most providers WANT to help people. They want to try to work within the system to find ways to get people what they need.

I would liken it to voting in an election. Just because you vote for someone doesn't always mean you agree 100% with that person - you just feel it's the best way to get a job done.

2) In answer to your direct question about uninsured patients: it's easy. Most contracts, Medicare included, REQUIRE a DME provider to bill an uninsured patient the submitted amount as set by Medicare. A provider has no say over how much an uninsured patient gets charged. (In the interest of being thorough - I'm sure there are some insurance contracts out there that don't require this but I'm not aware of them).

Medicare payments are setup like this: There is a submitted amount and an allowed amount. Usually, the allowed amount is set at some percentage of the submitted amount (Often 40% - 60% of the submitted - more often than not closer to 40). So, a submitted amount might be $100. So the allowable on that $100 submitted amount would be $40.00.

So the provider is required to charge the uninsured the full $100.00 or risk being in violation of whatever contracts he has and/or possibly even Medicare fraud.

It sucks. Welcome to the world of insurance carriers. It's why I've constantly said that we are in dire need of insurance reform. Oddly the biggest reason being fairness to UNinsured!

mattman

[mattman]

By the way, as evidence of how screwed up the systems are and how much power the Insurance company has in dictating a providers practices, I point you to the owner of this forum.

While I can't possibly know for sure (And frankly it's none of my business) I'm quite highly confident this is the exact reason he has seperate companies setup for each aspect of the business - 1 for cash and uninsured customers, another one for Medicare only and a third company just for private insurance.

That way he can get around the restrictions and cherry pick the types of orders.

Unfortunately, brick and mortar business can't really do that since they are tied to a physical location.

[Hawk256]

Medicare payments are setup like this: There is a submitted amount and an allowed amount. Usually, the allowed amount is set at some percentage of the submitted amount (Often 40% - 60% of the submitted - more often than not closer to 40). So, a submitted amount might be $100. So the allowable on that $100 submitted amount would be $40.00.

So the provider is required to charge the uninsured the full $100.00 or risk being in violation of whatever contracts he has and/or possibly even Medicare fraud.

It sucks. Welcome to the world of insurance carriers. It's why I've constantly said that we are in dire need of insurance reform. Oddly the biggest reason being fairness to UNinsured!

mattman

So the reason doctors and hospitals charge the uninsured such high rates is so that they can get Medicare and other insurances to pay them an amount that they are "not happy with" and is "barely enough to keep the doors open"? Am I to believe that doctors and hospitals enter into agreements and contracts with Medicare and private insurance companies under duress or just to keep the doors open? I'm sorry but I'm just not buying it.