Shedding light on DME pricing vs Online

[ruthven78]

Ok I've seen countless posts where people are thinking, in their individual opinions, that DME pricing is outrageous or people are being gouged. These people usually use places like cpap.com as their comparison to what pricing is fair. This is like comparing apples to apricots and I hope you will see the differences outlined below. I do work for a DME as a respiratory therapist, so I will try my best to remove as much bias as possible. A disclaimer: DME pricing will vary by region. A machine sold in Seattle can be different than one sold in Philadelphia, and even in the same region pricing will fluctuate between DME's. Also you will want to familiarize yourself with the terms "billed amount" and "allowable amount" as those can also come into play.

First let us look at the online retailers. Most people who use online retailers only look at the advertised price and dont look further or take many other factors into consideration.

I looked over a few and have to say, wow those are LOW prices! ($899 for a new Respironics system one CPAP w/humidifier). So I added it to the cart and began the dig deeper. This particular seller offered free shipping on orders over $99 nice! Another retailer was located in my state and had to add sales tax Check out required the customary "new user" registration, told them I would fax in my prescription, and wait....where is the area to put my insurance information? I only see a spot to put my credit/debit card. Scroll down and see a simple check box to indicate I agree to the USER AGREEMENT and the RETURN POLICIES. I admit, as a normal online buyer I often skip over these areas...but let us take a look at these. So far they are the customary legal speak of i agree to the terms and conditions set forth blah blah blah. Oh found an interesting item in the heading "ABN Notice for Medicare Beneficiaries"....hmmm, better pay careful attention to this one:

"<Seller> sells CPAP equipment to customers for cash. We do not work with private or government based insurers or social benefit programs. We do not accept assignment. <Seller> is not a Medicare provider nor do we have a Medicare number. Medicare will not reimburse you for purchases you make on <Seller's website>".

Ouch! Every online retailer had a similar type of notice. None of them would work with insurance companies. Some went on father to warn the purchaser that some insurances require things such as proof of compliance and a follow up appointment with the prescribing physician, or the insurance will not cover the equipment. But this doesnt explain why an online retailer's price is so different than a DME's.

Let's move on and look at the RETURN POLICY, there are some interesting nuggets here like "Shipping costs are not refundable" and "Please note that any product that has been opened can not be returned" and "As this is medical equipment of a very personal nature, all machines to include CPAP, APAP, BiPAP and Humidifiers, cannot be returned once the parcel has been opened, whether the unit shows hours of usage or not."

Oh hey! This company has a loaner program for if your machine has to be sent in for repair but look at this "Loaner machines will be set to your prescription on file and will not include comfort features such as C-Flex, Thermosmart or EPR. "....but I kinda like my c-flex of 3

So far the only things I can learn of why an online seller's price is different than a DME is that, well it wasnt found, so I must assume by virtue that the differences are in what I could not find. I could not find mention of licensed respiratory therapists or nurses. Also since they dont bill insurance there is undoubtedly no administration costs for billing insurance. Most are family owned or smaller companies which do not have multiple tiers of management...like area managers, regional managers, etc so less administrative costs there. Since they dont accept Medicare assignment they also therefore dont have to pay a company to pass Medicare accreditation. Accreditation is a requirement to obtain a medicare provider ID, without one you cannot bill Medicare.

So basically you buy it, they ship it, you're done. Very minimalistic which equates to low prices.

Now let us examine the DME.

A DME is mostly a brick & mortar store that will bill your insurance for a portion or all of the total cost, it varies by insurance policy. For the most part I will be using Medicare as my "insurance standard" because reimbursement is usually fairly similar to Medicare. A DME usually employs licensed healthcare professionals on their staff, and usually in the form of a nurse or more often, a respiratory therapist. Respiratory therapists have the same level of schooling as nurses, but specialize in the respiratory system, breathing disorders, and diseases affecting the respiratory system. But they are also knowledgeable about other areas of the body as it pertains to the respiratory system. However, a respiratory therapist is usually paid slightly less than a registered nurse, AND no insurance companies will reimburse a respiratory therapist for their time spent with the patient unless it is in a physician's office. Nurses are able to bill for their time, which is why you see visiting nurse organizations. So what does this have to do with DME pricing? Well because an RT doesnt work for free, a DME has to be able to pay this person somehow, and that is accomplished though a markup on the price of the equipment. What is the value of a respiratory therapist? An RT knows about sleep apnea intricately because it lies within the upper airway which is a part of the respiratory system. RTs also have great understanding of the physics involved with the treatment of sleep apnea. While in school for a degree for respiratory therapy, sleep apnea and its treatment is covered in depth. The treatment of CPAP (and bipap/bilevel) is also similar in ways to other treatments such as mechanical ventilation. In my area an RT wage starts at about $18/hr when in homecare (working for a DME) as compared to about $21/hr when working in a hospital. An RT will be able to interpret the data from sleep study, and also be able to relate information to a physician if necessary, such as if your therapy starts to not work as well, etc. They are also great for identifying problems, and the experienced ones will know the challenges facing a CPAP user and can help them acclimated to wearing a CPAP machine quicker than if they were doing it on their own. An since RTs are human, they are all not created equal. I wish I could say every RT is a super clinician but there are some "rotten apples" out there, just like any profession. Another thing to consider is that a lot of DMEs pay their RTs out of that single equipment sale. Like our company, if I see a patient once or 300 times, our company still only made the same amount so it behooves me to do it right the first time. Not that I dont like making myself available to patients or seeing them when needed, but each time I visit a patient is a labor charge toward the profit of that machine, so if I do it right the first time then I will have to re-visit that patient less.

you might be thinking "Wow that is a good wage!" or "WTH are they paid that much?" well like any other healthcare job, there is pricey schooling involved (my student loan was $21k on graduation), there are pricey board exams to pay for, and there is the requirement of continuing education (in my state it is 15 credits/yr but a lot of it is free), and then we have to pay for a license to be able to be an respiratory therapist in most states. Each state has different requirements and different prices on their fees, only a couple states have no licensing requirements. In my state (Washington) our licensure fee just went up which I believe is $160 every two years...plus we also want to be able to afford things everyone else does like being able to buy a home, have kids, raise a family, and all the other things that go with living. In comparison, electricians in our area make about $35/hr when they reach journeyman level status. We are also, for the most part, not unionized unlike nurses who have a state level union here. Usually the only time an RT is unionized is usually if the workplace has a union. (not saying anything bad about unions, just that those who are in unions are usually likely to have higher average wages).

What other costs are there? Well the DME has to pay for their store....so does a retailer, but we have to maintain an actual retail space. Some DMEs are able to operate out of their trunks but it is, at least in this area, very frowned upon and a DME like that would fail in this area. There is also the fact that a DME has to market their company to referral sources which usually entails having to hirer a sales rep. The rep goes and visits the referral sources (physician offices, sleep labs, hospitals, etc) and markets the company and their services. Often places are so busy seeing and treating patients that the only way to get in and talk to them is during lunch time. A lunch for our company can cost from $30-$200. We have to compete with 12 other DMEs in our area which makes our market area is especially cutthroat. So lets see, in a DME you usually have a manager, administrative staff, and an RT (or any number of them depending). Our company is small and only has 4 people but the 4th person's wage is made up entirely from sales for home oxygen and he just delivers oxygen tanks but we also have a corporate office that has to rely on every location (we have 5 total) to make enough money to pay for their salaries. And not just salary or other costs. A business is in business to make money, not break even. So a company will mark up their products so that they are making a profit. Which is why every business is in business in the first place....or else they would be a non-profit organization.

Another thing DMEs have to pay for is accreditation. Costs can be high, my company's is like $6000 every two years! We are "surprise audited" regularly, and yes, it is a surprise, they could show up in August one year, and July the next, and even visit multiple times a year. If you fail an audit, you must fix the parts causing failure, and then repay the cost to get accredited, even if you had just paid it the year before. And if you fail, you cannot submit any claims until you pass a re-audit. And this is rightfully so, because it boils down to proper patient care....some of the standards might be overkill, but in the end the patient is the one who ultimately benefits.

So now let us break it down.

Online retailer for a CPAP + humidifier was $899 w/free shipping - patient out of pocket $899 paid by credit or debit card upfront.

A DME for the same exact unit = $1750 w/free delivery - patient out of pocket varies but typically insurance covers 80% after deductible, so patient responsible for the deductible, and 20% of the balance after the deductible is applied (typical for in-network and Medicare), so if using 80% coverage with no deductible, out of pocket would be $179.80 and most all DME's (if their good) will offer a payment plan. We typically offer 4 months, can go as far as 12 months without management approval, or for those under insured we can go out as far as two years or even more in the rare cases. And in some cases for the uninsured, low-income we will comp free machines.

So now that you have seen the math, which is more affordable for you? If you have insurance, you can clearly see that going through a DME is the more affordable choice, depending on the deductible. I have had a couple patients with a $1000 deductible, but typically I see $300-500 deductibles. And sometimes even if you dont have insruance, if it is a reputable DME they will work with anyone to get them a CPAP that matches their financial limits.

And btw, Most DMEs also offer mask exchange programs. If the mask doesnt work well, we will try a different mask on a patient, then the manufacturer will send us a new mask of the original model at no charge. Therefore the patient still only pays for one mask, but ends up with mask that is the best and most comfortable fit for them. And is fitted by an RT who checks for leaks, pressure points, etc!

[Emilia]

You have presented your 'unbiased' view very well; however, you have overlooked a number of things. First, not everyone has insurance so it is great that online vendors exist to provide reasonably priced equipment for purchase. (BTW: I know of one online provider who has a full time RT available to talk to at all times.) Secondly, some insurances do, indeed, take billings from online vendors and will reimburse the patient for whatever amount their policy allows toward that online purchase. Thirdly, as in my case, some insurance will deny the doctor's explicit Rx for a particular machine because it is too expensive or some other foolish 'medical review' excuse for denial. I was denied any type of machine that was data capable, offered auto or epr capabilities. In essence, they wanted to give me some basic cpap machine that would tell me nothing about the progress of my therapy. So..... I chose to buy my own machine out of pocket so I could have control over my own health (I will add that my sleep doc is 110% supportive of this!). And that is the rub..... DME's, for the most part, do not want patients to have control. They would much rather keep them in the dark and give them the cheapest equipment on which they can make the most profit. It really isn't about the health of the patients....it is about the bottom line. That is what is wrong with the system...it is a business, and businesses are in the market to make money. If your DME is the rare exception to that, then kudos to your dedication and support to your patients. Perhaps cpap compliance wouldn't be such a dismal failure (50% compliance) if patients were empowered, educated, and were given fully data capable machines with software in order to monitor their own progress. That is what makes this forum so powerful.... patients who are successful due to knowledge, education, and having the tools necessary.

[elena88]

My first experiences with a dme were horrible.. They were hooked up with the hospital I went to for my sleep study.
Im going to write a letter to the hospital about the things they did, they should not be in business.

I was so disgusted, I though they were al this way, but I started looking around, and found one I can work with..

I have an eight grand deductable.


I can go in my new dme and try on any masks I want with their RT, and whatever one I pick, they go to the internet, find the cheapest price, match it,
and Im out of there with a new mask, fitted by professionals, at internet prices. They will download data before you try on masks to see how
youre doing..

(this business was started by a guy who was treated very badly by his first dme when he discovered he had osa.)

If you are covered by insurance, they will bill your insurance, but if you are paying cash, you get the deal above..

[Hawthorne]

Couldn't have said it better, Emilia. You have presented the "other side" well! Unfortunatley, most of us are on the other side!

I want to know what is going on with my therapy today, not 3 months down the road or not at all because I can only get a basic machine, and, therefore like you, I want a machine and software to do that. Most of us don't get that with a DME. I wouldn't mind paying extra if I could get that with a DME either.

I guess this forum has become my RT and I buy online at an affordable price with the features that will help me get optimal therapy! I come here for help in optimizing the therapy since I am one whose Provider doesn't help after I have paid big bucks for a basic machine from which even the RT can't get detailed data.

[DreamLady]

I have to say I agree with Hawthorne. While I can't say I was treated 'badly' by my DME, they only did the bare minimum. They didn't even spend an hour instructing me on the use of the machine, and she made it clear that she was booked up all day with appointments after mine. I felt rushed. They didn't have a petite mask, which is what was prescribed, so I felt 'forced' to accept the standard. I asked, in advance, for a fully data capable machine. I didn't care if I had to pay the difference. She said yes, this machine is fully data capable and enabled for you. Come to find out she was wrong. It's an Escape II Auto, and there is nothing but 'summary data' available on that machine. I can't even get a leak reading, which from what little I know so far, can be a valuable tool. Know how I know that last's night's 7.5 AHI was due to a leak? Only because hubby asked what was that hissing sound that woke me up in the middle of night? If he hadn't noticed and commented on it, I would have wondered about it all day! At least now I've told him if he hears that, to wake me up so I can adjust my mask.

I plan to call tomorrow and tell them that first of all, they have to order me a petite mask. The forehead piece is at my hairline, the bridge is too close to my eyes, and the bottom rests on my upper lip. It's just too big. In fact, they had nothing in the store that would fit me. Here I always thought I had a big nose; turns out my nares are extremely petite, which is part of my problem. If they can't satisfy my request for a mask that fits, I will call the sleep center and demand they send the script to a different DME.

[Emma47]

Here's what I got from my DME:
1. Delivery of a Cpap machine without data capability except for compliance. They did not tell me about other options, although they did exchange it for a data capable model after I insisted. They treated me like an idiot for asking.
2. They handed me a mask. Again, nothing was said about the possibility of returning it or trying other masks if it didn't work.
3. After the compliance period ended, I have never heard from them again. No follow up to see if everything is OK. I expect I'll hear from them when my insurance will pay for a new mask.

I would not be complaining about the price if I thought the DME was providing good service and their expertise was helping me but it isn't. This forum has been much more helpful.

[elena88]

I was given a mask and machine five minutes after my doc finished explaining my sleep study..

The guy just gave me one nose pillow mask, handed me a machine, pushed a few buttons on the machine,
said this is how it works, okay, masks fits... sign this.. maybe ten minutes he spent or less.. he was in a big damn hurry.

They refused to give me prices of masks and machines..
They said every time I called, that the billing depart was "in charge of that" and it was their business
policy that nobody could speak to the billing depart within forty eight hours of your call. WTF?

This worked out great for them if you were calling to return a mask or machine a few days before the thirty days
were up, because they would not call you back till the deadline was over, and you were stuck with it by then!

When I did call, they would never call back, unless it was to buy something.
They overbilled my insurance constantly outrageous amounts I HAD to pay.
They billed my insurance for my first apap machine, which I paid cash to the dmv, then I switched
it out, and they billed my insurance again for the second machine.. which was a straight switch..
so I got another bill for two grand.. unbelievable..

They said they never received masks I sent back, even though I sent proof, so they could keep billing..
it was about billing, billing, and more billing..

Its just discusting, truly discusting..

My new dme, I didnt think it was possible to have found such nice, honorable, honest, effecient, and knowlegable people..
There are good ones out there, I found one, so can you!

[Janknitz]

Ruthven, I think you have made some excellent points, and a good DME is worth its weight in gold, if it does everything it is supposed to legally and contractually do for the CPAP user. It sounds like the company you are affiliated with endeavors to do so, and users who deal with your company are fortunate indeed.

But too often we see DME's here that are all about profit (which is fine) at the expense of the CPAP user (which is not):

1. CPAP user instruction often consists of “this is the on and off button”, this is how you change the filter, and wear your mask every night,” instead of real and useful information that will help the user get optimal treatment. We have seen many larger DME’s drop ship the equipment and supplies to the user, to avoid any contact or time instructing the user about the equipment at all.
2. We have seen DME’s foist older machines on users—two and three generations old, with no EPR, and no data other than compliance. Newly diagnosed users are too shell-shocked and uninformed to know the difference, often until it’s “too late” to change the machine according to the DME.
3. We have seen DME’s that charge outrageous “set up fees” for this wonderful service that aren’t reimbursed by insurance and probably not allowed under Medicare and other insurance policies and state regulations.
4. We have seen DME’s that are either so uninformed about particular insurers reimbursement policies or flat out lie about them (“your insurance only covers this basic, non-data capable machine”).
5. We have seen DME’s that demand large co-pays up front for insurers that cover up to 100% and, if they manage to collect the co-pay make it difficult or impossible for the user to get a refund.
6. We have seen DME’s that bill each component of the initial set up separately to maximize profits, even when parts are bundled together by the manufacturer.
7. We have seen DME’s that charge their full retail price, often 30% or more over what any insurer will pay (and far higher than an online supplier), to uninsured individuals.
8. We have seen DME’s that either know nothing about proper fitting of a mask or simply don’t care. We have seen DME’s who tell a new nasal pillow mask user that the entire nasal pillow fits in the nose! Especially with new users, DME’s sometimes simply hand them a mask without ANY fitting. They lie to the user about return policies or stall the user so that the 30-day window is lost if the user has a problem.
9. They lie about equipment and supplies (“there is no such thing as a data capable machine that allows the user to access data”, “this is the mask that works for everyone and it’s the only one we carry”, “you can’t (or don’t need) to try on masks, you don’t need to try it on at full pressure or in your sleeping position, I can tell if it’s a good mask for you”).
10. They sell or allow their staff to sell for a profit sample masks from manufacturers received free or at low cost in order to allow new users to try on masks to find “the” right one, while refusing to allow new users to try on masks.

You know that saying “with friend like this, you don’t need any enemies.”? With DME’s like this, who needs them?

[jmcd]

I've had great service from my DME and health insurance carrier. I researched equipment, contacted my insurance carrier, and the DME all before going to my follow up appointment where my doc went through the sleep study results. I knew what equipment my DME carried and decided what I wanted before my appointment. I asked my doc to specify the machine I wanted on the script which he did. The DME was on the phone with me the day after my sleep study info and script were faxed to them. I had an appointment three days later.

The RT spent about 40 minutes with me going over the use of the machine, helping me adjust my mask, discussing upkeep and maintenance of the equipment, and the quarterly replacement process for the mask and hoses. He encouraged me to return and try different masks if the one I had wasn't comfortable after using it a couple of days. He also went the extra mile and swapped my large nasal pillow for a second small (the size I use) pillow. I went to the DME's facility but they were also willing to come to my home with the equipment. My DME is a national company which is a benefit for me as I travel on a regular basis for my job. I received a call from the RT after my fourth night of therapy to check on my progress. He encouraged me to call if I had any questions or problems. I just can't say enough about how pleased I am with the service.

However, I understand the frustrations of those who have had less than good service from their DME, medical provider, and insurance carriers. I understand that a lot of people don't have health insurance coverage or they only have major medical or catastrophic coverage. I think it is great that there are more economical options available such as cpap.com. I like knowing that is something were to happen to my insurance coverage that there is an option for obtaining a device that meets my needs at a cheaper cost. Had my DME not provided a machine with the features I wanted, I was prepared to purchase the machine on my own. Seems to me that there are options for most cpap users. It shouldn't come as a huge surprise that an online retailer can sell equipment for less than a brick and mortar store. Look at Amazon, 1-800 Contacts, etc.

[pulseoxstore]

I also work as an RT at a DME company. I agree with most of the points that ruthven states if a DME company provides those services. I have left 3 DME companies in search of one that will provide the best customer service. I even had one company tell me that I spent too much time with my customers and if I wanted to spend that much time setting up a patient I would have to do it on my own time. Most of the DME companies out there are more than willing to provide the cheapest CPAP and interface without telling the customer that there is better out there. There are some out there that are very good though. It is possible to provide good equipment and service and still make money.
I personally feel that if a person got every bit of training that they need from their DME, they might not ever find this site. The CPAP patients that are frustrated and need more help are the ones that come here. By the way, I have a setup book that I typed up to give to all of my customers and it says that CPAPtalk is a great resource to gather information. I'm glad that I found this place because I have learned more on here than I did in respiratory school and almost 10 years of setting these things up.

[Goofproof]

Very good post, but it should listed under CPAP FICTION, most of what you define are truths, but only half truths, spun to your own end. Buying online, we admit we can't have all the option we could want, instead we get what we pay for, and don't get what we don't need or want. Moreover we don't get ripped off paying bloated prices, for unneeded services, that may or MAY NOT be provided, after we pay the DME's Bloated prices.

It's hard to see if your online DME provider is lieing, (You can't see their lips move). so you have to go with their honesty in dealings with their customers.

It's easyier to see if your Brick DME is lieing, you meet a person face to face usually! (You can see their lips move) Usually they are providing you with whatever they have been told be their company, most of the input you get from them will be wrong, half truths, or downright lies, all for rip-off pricing of 100% to 200% for the cheapest, no-data piece of CPAP they can find in stock, with a Cheap Nasal Mask.

By buying online from a honest online DME, you could get two XPAPs for less than one at the Brick Shop, and not near the trauma. You have to spend your own money, but that's why we worked for it. We earned the right to get the best value for our Buck! Jim

[tonycog]

A friend of mine was recently diagnosed with OSA. He asked me where I thought he should go. I could only think of two possible reasons to go with a local DME provider: 1) Having a local source for help, and 2) The ability to return masks until he found one that would work. Every other reason I could provide pointed him to an online provider. Now, three months later, after he chose a local brick & mortar DME provider, he is non-compliant. His local provider only returns calls when a sale is a possibility. He gets no assistance with his poorly-fitted mask.

A different friend was also recently diagnosed with OSA. At our local B&M DME provider, he was told that the full-face mask he wanted "was considered a 'luxury item'" by his insurance company, so he would need to pay them an addition $195 for the mask - in addition to his co-pay and in addition to the amount the DME charged his insurance company.

By the way, this DME indeed has a certified RT. She obviously sat through all of the classes the original poster described and passed all of the required testing. She obviously "knows about sleep apnea intricately because it lies within the upper airway which is a part of the respiratory system." Also, as a well-paid RTs she has a "great understanding of the physics involved with the treatment of sleep apnea". According to the original poster, her qualifications justify the large mark-ups and billings. Unfortunately, this well-qualified RT has no clue about fitting a CPAP mask. Her idea of helping a patient fit a mask involves handing him 2 or 3 and saying "take these home and try them out." She also has no ability (or interest - I'm not sure which it was) to look at any sleep data. And while I never noticed any of her interest in relating "information to a physician if necessary, such as if your therapy starts to not work as well, etc.", she did make a very fast call to the physician when she got worried that I was going to complain to him about the lack of help received from her store. That made sense since at that point she feared the doctor might not send any more patients her way.

So while I hope ruthven feels free to share his point-of-view here, I hope he feels free to listen to the valid gripes that many of us have against our local B&M DME providers. In your post you claimed you wanted to remove as much bias as possible. First, don't fool yourself. Your post was loaded with bias. That may be okay. Our posts will be loaded with our own biases as well. But please do not allow your biases to prevent you from learning from this forum. There are a lot of smart, experienced people here. Most do not have any official certifications in xPAP, but do not let that fool you. They are intelligent, willing to ask questions, and willing to share. Please be willing to do the same.

[howkim]

...While I can't say I was treated 'badly' by my DME, they only did the bare minimum. ...

Amen sister. While our details are different, the sentence I quoted here says it all.

[Hawthorne]

Well, it appears no new light whatsoever was shed on the differences so far in this thread.

We all know there are good and bad DMEs out there.

We also know that there appear to be more bad ones than good ones from our own experences.

[Slinky]

... She obviously "knows about sleep apnea intricately because it lies within the upper airway which is a part of the respiratory system." Also, as a well-paid RTs she has a "great understanding of the physics involved with the treatment of sleep apnea". ...

HORSEPUCKIES! Sleep apnea is NOT a respiratory problem!!! Sleep apnea is an anatomical problem ... short, thick neck, narrow jaw, large tongue, obesity, receding chin, etc., etc., etc.