$500 UpCharge - are you serious?

[EO_123]

In my shopping for a DME to provide me with an S9 Autoset, I came across one that assured both me and my insurance Rep that they could provide me with the machine I wanted, as soon as I changed my insurance referral, they informed me they were "mistaken" and what they had was the S9 Escape Auto. However, they would be happy to get me an S9 Autoset if I paid a $500 up charge to cover the difference in cost. I realize this is pure BS, and no, I'm not going to pay it, but I don't take too kindly to someone even thinking they could rob me like that.

I've been all over the internet CPAP sites, I know they differ slightly from brick and mortar DME's, but it can't be THAT much. In all of my googling and internet hunting, I cannot find one place where the S9 Autoset is more than $100-120 more than the S9 Escape (S9 Escape Auto's are actually hard to find, but Escape is bottom of the line, so it's a moot point) Even when you add the humidifier, the cost of those is the same, regardless of model (there is one standard humidifier for the entire S9 line, so that's not something that creates a price point difference) The only other difference is climate tubing, and that appears to be $20 more at best.

Can anyone tell me - is the price structure for these machines that different within the DME world? I understand that there are contracts, volume discounts, and wholesale pricing, but if these companies online are selling these machines with only a $100 price span between the bottom and top model, how and why are all the DME's hollering that the S9 AutoSet is SO much more expensive than the Escape?

I'm sure DME's bill the insurance companies at a much higher rate, and I know that the Respiratory Therapist gets compensated somehow, but where is the $500 coming from? I actually asked this DME to put that proposal in writing - that they would give me an Autoset if I paid them a $500 up charge - and they did - so I have a written statement from them on this, and I'm wondering, if UpCharging is illegal, I can/should report this to my insurance company, or someone, right?

[BlackSpinner]

In some places this is indeed illegal. Smart of you to get it in writing.

[Cuda]

Insurance is willing to pay for one unit and you want something better they want more money, sounds fair. You can buy from cpap.com and since for me they are not a "provider" insurance will only pick up 60% instead of 80% (if I had coverage for this). Thing is cpap.com is so much cheaper it still saves you money.

[Pugsy]

Janknitz knows a whole lot more about this than I do so here is what she has written in her blog.
http://maskarrayed.wordpress.com/dont-p ... -upcharge/

This sort of BS is why I bought privately (or would have bought online if the private machine hadn't come up local).
I fired the first DME also. Just to not have to deal with this sort of stuff was well worth my out of pocket money.
I got exactly what I wanted, when I wanted and no hassle. My out of pocket costs were a wash if I figured deductible and co pay (for a bare bones F & P machine).. I never got to the point of a price for an APAP..

Do the math. Online costs vs out of pocket co pay's and deductibles.. Don't forget January and new deductible just around the corner.. Can't put a $ value on peace of mind, no headaches, no hassle and no high blood pressure from all the aggravation.

[GumbyCT]

I actually asked this DME to put that proposal in writing - that they would give me an Autoset if I paid them a $500 up charge - and they did - so I have a written statement from them on this, and I'm wondering, if UpCharging is illegal, I can/should report this to my insurance company, or someone, right?

Certainly, I would report it to your insurance first, they very often have a contract. Then contact the state insurance Commissioner, your state Consumer Protection agency, and BBB, if they are listed. You can also contact the Atty. General for your state to see what they say.

Under no circumstances would I buy from them. YOU will certainly regret it later.

[EO_123]

Thank you for the info. This really has me burned up (and I'm without CPAP at the moment, so it's not in their best interest to make me grumpy)

So is it correct to assume that although DME's pay wholesale prices, that the pricing structure remains the same? All of the DME's talk to me like I'm asking for the sun, moon and stars when I mention the Autoset, they tell me how it is the most expensive model, and only for 'severe' patients etc... From all of my research, I'm hard pressed to find more than a $100 span between the (retail) cost of these models. Why on earth do the DME's cry so loudly over such a small difference. Surely that $100 is not their entire profit margin.... *cough*

[chunkyfrog]

DME's fear machines that will self-titrate, thus eliminating many profitable, but unnecessary, sleep tests.

[EO_123]

On one hand that makes sense, but as far as I can tell, my DME had nothing to do with my study. My study was done via our military hospital, and I know there are some subtle differences with the way TriCare works, but I don't see the correlation. How do DME's benefit from sleep studies? Is there an even deeper connection?

[Janknitz]

There's NO correlation whatsoever between the actual wholesale cost of CPAP supplies and equipment and the fantasy amount the DME wants to charge. Don't even try to wrap your head around it--there's no logic and all it will do is give you a headache. They are just trying to play you for a sucker, and you are smart enough not to play.

In most cases upcharges are not permitted under insurance contracts and also prohibited by law in most states. See my blogpost in my signature: "Don't Pay that Upcharge!".

The best way to handle this is to firmly and politely (and preferably in writing) remind the DME that they have a contract with TriCare that requires them to accept the contracted amount for any E0601 machine they provide. So perhaps they made a "mistake" about the upcharge (the practice is known as "balance billing" and is MOST CERTAINLY not permitted in the contract the DME has with TriCare), but if they feel that it is not an error you'll be happy to file a greivance with Tricare and appropriate state agencies.

Here's how a member of the sleep apnea support forum (Laurie was also a member here) handled this with a DME--Brilliant!:

Their song changed after I sent a nice, but extremely firm email quoting from Tricare's provider section that APAP is coded as CPAP. I firmly reminded my DME that "balance billing" (charging a beneficiary over the allowed amount) is in violation of their contract with Tricare and if they continued to discuss a $300.00 "upgrade fee" that I would have no other choice but to file a grievance against their company with Tricare and any other relevant state agency. I ended the email nicely by saying that I really hoped we could come to a reasonable solution because I would like to give Sleep Med my business and to recommend them to others (not going to happen).

[GumbyCT]

IF those before you had reported this practice it likely would not be happening to you.

IF you choose to allow them to retract their offer and then buy anything from them not only will it be like dancing with the devil - YOU will be part of the problem, not part of the solution. Your call.

ps. another symptom of sleep deprivation is making bad choices.

[EO_123]

Janknitz - I've read your article several times (that was my first reference point as soon as they said 'upcharge', as well as your entire blog. It has been EXTREMELY helpful and I hope you continue to do more posts. I really appreciate the education I am getting from CPAPTalk. I just do see how an Autoset can cost them THAT much more that they would squawk like I'm taking their lunch money, no matter how the pricing works, it doesn't stand to reason that the machines are that different in cost, if anything, they would get a better deal than a retail customer.

Gumby - I absolutely intend to bring this before Tricare, and please know that I am not even considering working with that DME, but I'm like a cat with a mouse, and I really don't want to let it get away.

When I'm not sleeping, I'm actually a professional advocate for a large non profit, so this kind of thing pushes all my buttons. It's my job to make sure that people get what they need and aren't taken advantage of by greedy selfish mongers, no matter what size or shape they are. I really didn't expect to encounter anything like this when I begrudgingly agreed to talk to my doctor about a sleep study. I care deeply about the countless other sleep deprived people who may have been robbed by this DME. I'm particularly fixated on them because they told a TriCare Rep they had the machine - they also told me 4 additional times that they had the machine, confirming that it was NOT an Escape. They only told me it was Escape once I moved my referral. This sounds a whole lot like bait and switch, even if it wasn't intentional, it is very bad business, and while they might want to cloak it as a 'mistake', it feels more and more like a lie, and that's not okay with me. This is why I had them put the proposal in writing. I'm very tempted to ask them to explain if the cost between the machines is roughly $100, what is the other $400 for? But I think I'll let Tricare figure that out and ask them that question.

I am working with another DME who does seem to have the AutoSet, I won't believe it till I see it, but they do seem to respect my knowledge and want to make me happy. They are aware I left my first DME because they played games with me. Also, hubby is going to have a sleep study, so if they make me happy, I'm bringing them more business. I'm not going to mess with the bad DME until I have my machine, but by the time I'm done, they will wish they had just given it to me

[rested gal]

EO_123, I'm impressed with your thinking and your writing.
I'm even more impressed with your dedication to what's fair and right.

Loved your cat/mouse analogy. And loved this...

by the time I'm done, they will wish they had just given it to me

You may need to change your nickname to E0_601.

Jan, and Brenda (Pugsy)...you are such absolute treasures on this forum!

[Janknitz]

EO-go get em!!! You know if they are doing this to a well-educated and careful consumer like you they are really having their way with the uneducated and sleep-deprived masses. I love that you got it in writing so this DME can't play the "that's not what we said game". It will never happen, but I fantasize about 60 Minutes knocking on their door.

Truly they are cutting off their noses to spite their faces! A satisfied customer translates into a lifetime of repeat business for supplies. The profit margin may be smaller, but it's steady. They will quickly make up the difference (I estimate it's more like $50) between models and make much more over time.

[EO_123]

RestedGal, you really have made my day. I didn't even catch the correlation - I really should be E0_601 LOVED that. (I acquired the EO title on another forum - it's short for 'evil overlord' No wonder that number sticks with me so well.

I'm a firm believer that if you give someone enough rope, they will hang themselves, and that's just what this DME has done. I will have them. As much as this has me pulling my hair out, I take a kind of sadistic personal pleasure in going after jokers like this. The fact that they were willing to put their crimes in writing had me laughing for an hour. I was very upfront and clear about my situation, that I had already left one DME, that I was an educated patient and that my needs were specific and not really negotiable. That said, I'm also the kind of individual that if I am a happy satisfied customer, everyone is going to know about it, I'll be your best PR, but if you think you can play games with me, I'm going to make sure it costs you. Of course I don't say it like this, but that is the bottom line. Everyone gets the opportunity to do the right thing first. Professionally I've learned that a case is strongest if I have done all of the right things and followed all of the procedures, almost every time this glaringly highlights the transgressions on the other side. So thank you ever so much for educating me and allowing me to continue to pick your brains, Janknitz, Pugsy, Archangle and all of the other wonderful people here.

I'm on my way to pick up my new CPAP. Everyone pray it's actually an Autoset!

[archangle]

I'm on my way to pick up my new CPAP. Everyone pray it's actually an Autoset!

Be sure to open the box and look next to the power button on the CPAP to see that it says "AutoSet," not "Escape Auto." One member got screwed because the DME insisted his CPAP was an Elite, even though it said "Escape" on the box and on the CPAP machine.

If it's midnight and a DME tells you it's dark outside, go and check for yourself.

One person even suggested that you take your fingernail and see that the "AutoSet" isn't just a sticker that's been placed over the real label. I'm not quite that paranoid.

As to why the other DME kept trying to screw you, it's part of the culture. They make a lot of money by nickle and diming people to death. They are used to preying on the the sick and tired. They often get by with their fraud by simply wearing their patients down. They make a lot of extra money by finding any way to cook the books and bill the insurance company for two procedures instead of one.

I think a lot of them would rather risk losing an educated customer because the sheep are so profitable. They can keep screwing the sheep for years for supplies, maintenance, services, etc.

They're also very good at wearing down the educated customer. Look at how they tried to play you. Tell you that they can get what you want. Then when it came to actual delivery, say "my supervisor overruled me, but we have this great machine with a confusingly similar name. It's an auto, too. Oh, you don't want that, well we can give you a great deal on the machine you want at a slight upcharge." You'd be amazed at how many people fall for that crap. They're tired and just want their medical equipment without having to go through the whole exhausting process of dealing with the doctor, insurance company and another dishonest DME.