My DME Horror story

[Wyowanderer]

Last Wednesday my doctor asked me to get a new mask and hose (it's been working fine, but it's old) so I drove to my DME-I'll withhold the name for now- and asked for the new parts. He asked if it was going on my insurance, and I told him yes.
He grabs a hose from the back room and a mask from the shelf, and starts to write it up. My first clue that this DME is a creep was when he grabbed a couple extra nasal pillows and filters and added them to the pile, and told me that he'd bill them to the insurance as well. I told him no thanks, I just wanted the mask and hose, to which he told me that he'd "throw them in". I was a bit surprised, but agreed. I walked around the store for a short while, and he called me over when he was finished with the ticket. He turned it around for me to sign, and he'd put on it a mask at $250, a hose for $55, and "headgear" for $75. I questioned the charge for "headgear", as it's part of the (ResMed Mirage Swift II) mask, and he told me "that's just how we bill". I told him I'd never been charged for a mask AND headgear before, and again he insisted that this was perfectly normal. I told him I'd pass, and on my way out the door he said that he'd "take off the charge if it would save the sale"
I told him that he shouldn't have done it in the first place and walked out. God being my helper, I'll never return.

I called my insurance company to report this, but the rep told me that there wasn't anything they could do.

I bought a new mask and hose from my favorite online supplier, for less than half the cost, and couldn't be happier.

[Wulfman...]

Good for you!!!

I live in the Big Horn Basin area of Wyoming and have been on this therapy for eight years.......and HAVE NEVER and WOULD NEVER use one of these DMEs for my CPAP supplies or equipment. I've used CPAP(dot)COM from the get-go.

Welcome to the forum.

Den

.

[SleepWellCPAP]

Hello Wyowanderer!

Sorry to hear you had a bad experience with your DME.

What you are describing regarding the amounts, though they seem rediculously high, is done so that the insurance allowable for the items you are getting is below the supplier charge. Keep in mind, your supplier could have put a million dollars down for the items, and all he would have been paid is the "allowed" amount. One thing that is surprising is that typically when a mask is billed, that code includes headgear. The only thing listing headgear separately would have done for your supplier is account for the inventory. That code would have denied if submitted with the mask.

Hope that helps make some sense out of those numbers. Please post again if questions remain.

Jim

[chunkyfrog]

IMHO, there is not reason why actual prices need to be kept secret.
All medical charges should be 100% transparent.
It should be the LAW!

[wardmiller]

What you are describing regarding the amounts, though they seem rediculously high, is done so that the insurance allowable for the items you are getting is below the supplier charge. Keep in mind, your supplier could have put a million dollars down for the items, and all he would have been paid is the "allowed" amount.
Jim

You make it sound as if writing false transactions is okay. It is not. One of the reasons merchants use this scam is so their gross sales are artificially inflated. Mail-in rebates is another example that falsely adds to their gross sales. Then when the merchant tries to sell his company, he can use this falsely inflated gross sales figure to make his business appear financially more attractive than it actually is.

My advice: have nothing to do with a merchant who falsifies a transaction.

[chunkyfrog]

+1
Deceit is dirty business; it should ALWAYS lead to bankruptcy.

[Drowsy Dancer]

<snip>and on my way out the door he said that he'd "take off the charge if it would save the sale"<snip>

This is the part that really got me going about this story. Good for you for walking out.

[LSAT]

I've dealt with 3 different DMEs in the 5 years I have been on CPAP therapy. All 3 of them would bill the manufacturers suggested retail price on the order. They only received an amount originally agreed upon or the medicare allowable amount which may be as low as 50% of retail. No different than an auto dealer that has a sticker price of $30,000 and accepts $28,000. They write off the difference as a cash allowance or inflate the value of your trade in. No one pays sticker price.
(YES...I put DMEs in the same category as auto salesman...but, that's just the way it works). Hospitals and doctors charges work the same way.

[Janknitz]

This is not uncommon, and it's part of our terrible system. When insurance is paying IT DOESN'T MATTER WHAT PRICE IS ON THE INVOICE because your insurance will NOT be paying that price. If the insurer pays a percentage of the cost, it's a percentage of the cost allowed by the insurer, NEVER a percentage of the DME's retail price.

Example: New mask retails for $180, your insurance pays 80% of it's allowable cost which is $100, so your insurer pays $80 and you pay the remaining $20. Nobody pays $180 (except for some poor sucker who walks in without insurance and never questions the price).

Now, as Sleepwell explains, there is a reason for the high billed charges. Medicare in particular and other insurers will periodically audit the DME's billing to make sure that the costs of the DME are in line with the reimbursed amount. The DME's have to show that their costs were a certain percentage of the reimbursed amount. By billing higher, they can show a certain degree of loss. So billed amounts turn out to be works of pure fiction. It's not that the DME is trying to cheat you or even your insurer, they are just trying to squeeze every penny the insurer is willing to pay them. Meanwhile the insurer is trying to pay the DME's as little as possible. It's a crazy and dysfunctional balancing act between the two.

And yes, it seems to be standard practice among DME's to part out masks even when they come all packaged together. It happens all the time.

When people talk about healthcare reform, there are often discussions about consumers having to do some shopping around for better prices, but as you can see, that's quite impossible. Even most DME's don't know the REAL cost of items, because they have to play all these billing games to get paid enough to stay in business.

[chunkyfrog]

I don't care--it's still wrong.

[Wyowanderer]

Hello Wyowanderer!

What you are describing regarding the amounts, though they seem rediculously high, is done so that the insurance allowable for the items you are getting is below the supplier charge. Keep in mind, your supplier could have put a million dollars down for the items, and all he would have been paid is the "allowed" amount. One thing that is surprising is that typically when a mask is billed, that code includes headgear. The only thing listing headgear separately would have done for your supplier is account for the inventory. That code would have denied if submitted with the mask.

Hope that helps make some sense out of those numbers. Please post again if questions remain.

Jim

I'm not grousing about the price: I understand what it takes to stay in business and understand billing and pricing. I'd have been happy to pay the charges listed if he hadn't been dishonest.
My complaint is that he tried to add pillows and filters that I didn't ask for, and that he added the "headgear" charge. You'll never get me to believe that he didn't know exactly what he was doing, so that the insurance would pay their share, and I'd be stuck with the remainder of the bill, including the B.S. "headgear" charge. I'm confident that it had nothing to do with inventory, otherwise he wouldn't have offered to "take off the charge if it'll save the sale".
Thanks for the reply, friend.

[jdm2857]

I believe that the headgear charge issue is due to absurd Medicare replacement rules. At 90 days, Medicare allows for a replacement mask, but only allows for headgear at 180 days. So, at 90 days one is eligible for a mask without headgear, and at 180 days a full mask.

Hence DMEs charge a mask charge for the mask sans headgear, and a separate charge for just the headgear. The headgear
has it's own HCPCS code -- A7035. From previous posts, it sounds like some insurers disallow the headgear charge.

Some DMEs supply the complete mask (with headgear) when just the mask is technically allowed.

And, of course, this is all bureaucratic nonsense. Typically, headgear wears out before the mask frame does
(cushions and pillows are on their own 30-day replacement schedule.) Logic says to just replace the entire mask
every 90 days and be done with it.

[greatunclebill]

my masks and headgear have always come together but have been billed as seperate line items. that's how the dme bills and the insurance pays.

[RandyJ]

Even most DME's don't know the REAL cost of items, because they have to play all these billing games to get paid enough to stay in business.

DMEs know, however, how much they have paid for something. For example, they buy a bottom of the line PR System One DS150 for $300 from Philips Respironics, and then bill an astronomical amount to insurance, collecting an allowed amount over several months likely in the neighborhood of $800-900.

In many businesses the wholesale to retail markup might be around 35-50%, but almost 300%???

That is the part that I find immoral.

[Janknitz]

DMEs know, however, how much they have paid for something. For example, they buy a bottom of the line PR System One DS150 for $300 from Philips Respironics, and then bill an astronomical amount to insurance, collecting an allowed amount over several months likely in the neighborhood of $800-900.

Hey, I'm the LAST person to defend a DME, but here's the reality of a very broken system. The DME doesn't get to choose what price the insurance pays. Medicare is a great example. Whether the machine costs $300 or $3000, Medicare is going to pay a set amount, which comes to about $1200 (off the top of my head) over the 13 month rental period, PLUS purchasing the humidifier and supplies. Even if the DME WANTED to charge LESS (yeah, right!), there's simply NO way to do that. Medicare (and the patient co-pay) will pay the set amount. Is it crazy? Absolutely. But it's the way it is.

IMHO, it's one of the major failures of the system. When we can go online and buy the same exact thing for 1/3 to 1/2 of the insurance reimbursed price, but Medicare and other insurers will not recognize those savings, that's plain stupid.

Again, in the DME's defense the boat load of documentation they have to do to get paid, and they extra services they are contractually obligated to provide to patients (and sometimes--though rarely--they actually do provide these services) are part of the reason they get paid more than your online supplier.

It makes little sense, but it is what it is, and this DME doesn't sound any different from any other that has to play the game to stay in the business. If you are lucky enough to be able to pay out of pocket, then go for it because you don't have to put up with all this BS. But it's not fair to blame the DME entirely for the world we have to live in.