Some DME's are pretty good...

[WearyOne]

My COBRA (Aetna) runs out the end of September (this month) and I have two more months left on my CPAP "rental." Aetna "rents" for 10 months and then it's considered paid for. I expected a problem, but the DME is just going to bill me for the last two months at the Aetna allowable rate, which is $43.00 a month. So I'll only owe $86. I expected something much higher. The DME is also ordering everything they can for me, mask, etc., this week. (I'm self-employed and the COBRA is from my husband's old job. Working on getting individual insurance now, but it hasn't gone through yet.)

Apparently, at $43.00 a month, the DME is only getting $430 for my machine, which is lower than what I could buy it for. Now, what they actually billed Aetna for may be a different story, though.

Pam

[Wulfman...]

Pam,

My "guess" is that your co-pay of $43 ($430) pretty much paid for the machine and what they bill your insurance will be "gravy" to the DME.

Den

[WearyOne]

Hey, Den,

Actually, I haven't paid a cent for my machine since I started using it 8 months ago--no copays or anything.

The way Aetna does it is they pay "rental" for 10 months and then it's considered paid for. The DME is billing Aetna $155 a month for a totally ridiculous $1,550 after the 10 months. But Aetna is only PAYING them $43 a month, as that is their "allowable limit." (I looked this up on my insurance claims online.) Since they've only been getting $43 a month, that's what they're going to charge me for these last two months.

I've noticed before how much a physician or medical company charges the insurance company and how much less they actually get paid! And that's even if I don't have to pay anything. Weird.

[RosemaryB]

Don't forget to get the maximum number of filters you can, too. They are pricey little devils!

I'm glad your DME is working with you to help you get the maximum coverage before your insurance runs out.

[Vasily]

Weary,

Congrats to you, the DME you are working with seems to be a fair one, our insurance contracts dictate that in a situation like yours we would do the same thing if more than 50% of the rental contract had been completed.

Here it goes, and it's probably been explained 1000 times before, but I'll say it again. DME companies who DO NOT have contracts with your insurance company CAN (and many times do) pass along anything above the allowable to you. Taking your case for example, you would have been responsible for the remaining $1,120 of the $1,550 that was billed IF Aetna didn't have a contract with your DME.

However DME companies who DO have contracts with your insurance are often forbidden in that contract to pass along anything that they bill above the allowable to you the patient. I point to my initial paragraph to further clarify that point.

Now, you may ask, "Well WHY do they bill so much if they know there is a contract to only pay xxx amount?" They bill that much to maximize the allowable amount.

Example: Our contract with XY insurance company states that the allowable rate for a E0601 (CPAP Machine) is 10% of the billed rate up to a maximum of $40. So the DME is going to bill $400 so that they get the maximum reimbursement for the billed amount. There are also "caps" on initial purchases (ie. the insurances for the CPAP up front without renting), just like on the monthly rentals.

My DME contracts with about 20 insurance companies from what I understand, I have seen purchase contract numbers from about 12 of those 20. The highest initial purchase allowable I have seen is "our cost + 25%". Our cost is always a set amount for each CPAP we purchase from Respironics, this cost is supplied to the insurance companies, so they know upfront what their going to pay before they even get the bill.

So that's the long and short of it.

_________________

CPAPopedia Keywords Contained In This Post (Click For Definition): respironics, CPAP, DME

[Slinky]

Thanks for that explanation, Vasily!!! My primary is Medicare but nonetheless understanding how "private" insurances work is of interest to me and of value (and most likely interest) to those w/"private" insurance as well. (By private I mean other than Medicare and VA, so both group and individual insurances).