Shedding light on DME pricing vs Online

[Hose_Head]

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.

Good post. An honest attempt to present the DME point of view. However, it doesn't address the question of why anyone would/should pay the DME's outrageous price for replacement supplies such as a mask, filters or hose. Once you find a mask that works for you, you DON"T NEED AN RPT to sell you a replacement. If such a thing existed, you could buy it from a vending machine operating with minimal overhead cost. This is where the online vendors really help out.

Now if only we could get DME's to actually provide the services that were described by ruthven78!

[tonycog]

... 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.

Amen. I was using his quotes to make a sarcastic point about what my former RT was like. The RT I was referring to could pass the test required to get the two magic letters "R" and "T", just like the original poster. It is, according to him, those two letters that justify the higher prices charged by many/most B&M DME providers. According the the OP, it is those tests and certifications that make the difference. My former RT passed those tests and had those certifications.

Tony

[kempo]

Here is my take on it. cpap machines should be sold over the counter at Wally World or Sears or any of the other department stores. It should come with a DVD, CD with simple instructions. The machines should be autos that will figure out your pressure needs and show your detailed charts daily. These machines would be rated by public opinion not some government agency. If you had questions about your results you could take the SD card out, slap it in your laptop and email the results to a designated website to find out how you are doing by someone who is a trained specialist.

I think we could see something like this in the future. Anyone who can read and operate a computer could do this. The price would drop so much that anyone could buy a cpap without the hassle from an insurance company.

Of course the government would have to give up some of its power of regulation over the people and the medical equipment manufactures would fight it tooth and nail via campaign contributions.

Oh well, I was just dreaming.

[cpapernewbie]

Bravo Kempo!
This is my own wish too. Those DME and RT make the treatment become too expensive for us with little value added...

[brazospearl]

While we wait for Kempo's scenario to come to pass, we're stuck with the online v. brick & mortar problem. I would've LOVED to have purchased my machine from a brick & mortar place. The one in my town has no RT; I was "helped" by the young lady who wired me up for the sleep study. Some examples of how knowledgeable she is: "We'll give you your machine to take home in the morning." Give it to me? Seriously? Sweet! Well, no, actually, my part of the cost was $175 that day & another $175 the next month. In addition to what my insurance was paying. For a bottom-of-the-line machine with no humidifier, exhale relief, or data. A machine so out of date that cpap.com doesn't even stock it. When I requested a mask that would allow me to wear my glasses she said, "Nobody makes one like that." Not we don't have any in stock right now, but nobody makes one...so, I took my $$ elsewhere. I'd rather pay for it all out-of-pocket than deal with morons. So, if the local DME wants my business they'll need to up their game quite a bit.

Oh, I especially liked ruthven's comment that the RT would communicate with the doctor if my therapy wasn't going well. Why would I need anybody to do that for me? Oh, that's right, if I'd accepted their overpriced clunker machine I wouldn't have data to monitor. Of course, they wouldn't either, but, hey, they could call the doc & say things weren't going well. Brilliant! Then they wonder why we don't want to use their services.

[jmcd]

... 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.

And these anatomical problems block you airway causing you to stop breathing. . .hence it is a respiratory problem.

---------------

I respect the opinions of the people on this board but suggesting RTs are worthless is a bit extreme.

[jonquiljo]

DME's are "middlemen" between insurance companies and the end user. It is unfortunate that our medical system is totally unregulated (in terms of cost) as to allow this to happen, but the whole "DR --DME-- Insurance Co -- Patient" relationship is why costs are so high. And no, this new health-care bill does absolutely nothing to control this problem, which is rampant in all parts of medicine.

A sleep Dr (etc.) Rx's a machine and the fun starts from there. If the patient is savvy to CPAP, then they can do it on their own on the Internet. But most aren't savvy, so they go to their local DME. Now most people don't have insurance or enough insurance to make coverage using a DME is worth it. For example, I pay $5000 a month for a garbage health insurance policy for my wife and myself. Between what they will not pay, co-pays, and deductibles - I would forget about getting a CPAP machine covered - at least enough to make it worthwhile going to a DME. I would have to pay for an "upside down sleep test" and jumped through a million hoops to be granted coverage. I'd have gone back to the Dr two or three times "to be sure", etc. Each time this happens it costs money to me in my pocket with high deductibles and large co-pays. If I had "passed" all of these hoops, I would then have had a $500 co-pay on a machine that I could buy for only $650 at cpap.com. And I wouldn't have had to have all those tests and re-tests to get that coverage in the first place.

We have this mark up --- mark down system that makes us all poor. The provider (in this case DME) marks up the costs of something. The insurance company then "negotiates down" the cost of this device (or service) and pays what it feels is reasonable. So in many cases - especially in medical testing - fee's are marked up 5-10 fold, only to have the insurance company mark them down again - and pay the provider next to nothing.

Normally one would look at this and say that the mark up equals the mark down and so we all end up paying reasonably. If you have good insurance this is true - at least for your insurance company. If you don't have insurance of have crappy insurance (like I do) then it means that you end up getting the mark up without the mark down. Poor people or uninsured get the worst end of this. The rest of us who have middle of the road policies find their insurance companies restricting them terribly in what services or equipment that they can receive at all. So most of us end up paying - and no, the new health bill will do nothing about any of this except to cut payments to poorer and older people as we grow short on funds. Medicare may be free (or little cost) to most people, but it's future is grim.

The bottom line is that our system is totally inefficient and forces us all to pay more and more. Even if you get a top policy from your job - the cost of insuring you is figured into the cost of your salary. Why do you think companies prefer to hire younger people rather than older (like myself)? Well, it costs less to insure them, among other things. Either way, all these people involved in the process make it more expensive. No single entity is a rip-off (except the insurers - who are guaranteed a certain profit and certain inefficiency). But we all lose. We are the lucky ones - at least we get treatment for something that can save your life. Most people - even of substantial means - get shut out or discouraged by all the roadblocks or red tape.

[Kevin G.]

Ruthven78

Assuming the points you make are valid and if we put a dollar value to them this still does not explain the difference between $2,400 for a ResMed S9 Autoset when my insurance only pays approximately $650. It is assumed that they make a small profit on the $650.

Similar markups were used for the heated humidifier. They also charged me separately for the filter that comes with the machine. My understanding is that DME’s used to charge separately for the CD card that comes with the machine until the insurance companies said no.

Compare this to the costs for other products you buy at brick and mortar stores some of which provide good service. Let us figure the value for the time of the RT. Some engineers who get paid considerably more than RT’s are billed out at less than $150 per hour. When you factor in these and other issues the $2,400 does not make sense.

By the way most of the time my RT spent with me was to have me sign some disclosure statements and trying to sell me on the idea of ordering more supplies as soon as the insurance company would allow. This was more frequent than the manufacturer’s recommendations. By the way they billed my insurance company for the time spent by the RT so it obviously wasn’t factored in to the cost of the machine.

If I have the choice between $830 on line or $2,400 from the DME I can accept some reduction in service and some additional risk. The reality is that when I have dealt with an on-line supplier I believe that I have gotten better service.

Agree with the statement that DME’s, supported by my experience, do not want patients to have control. My doctor doesn’t have a problem with me having control over my treatment but my DME’s and RT’s definitely do. Obviously they know more than my Doctor who is board certified sleep specialist and it the head of the sleep department at a major hospital.

I will pay more for a brick and mortar supplier but I will not pay the prices that they charge.

[auntlala]

i am truly new to this site - just found it yesterday. have been a cpap user for 2 years - and truly 100% compliant. i am a healthcare professional - not an RT but a PT - so i do have a lot of respect for their professional expertise. i would be able to agree with a lot of what the original poster had to say if that was the case in the real world - unfortunately that has not been my experience.

i discovered i had OSA in may of '08 - from that start of that journey till i actually had a machine in hand was September of '08. now that part was not the DME's fault - but from 9/1 - 9/10 they revealed their true colors - i just refused to believe they truly were that bad. when i learned they had the scripts from the doc i called and asked that they try to move it along as quickly as possible because quite honestly i had not slept much since i became aware of the OSA. was totally freaked at waking up cause i was not breathing. the woman on the phone was really nice and said she would see that the forms went out to my insurance asap but warned me they (the insurance) had a 48 hours to return auth policy - which i knew was true as i deal with them daily. so i waited - gave em an extra day cause of the holiday weekend and called - was told they had the auth and the RT would be contacting me to set up appt. waited all day - no call. called the next day and the receptionist seemed surprised i hadn't been called and assured me she would have the RT call me as soon as she finished with the pt she was with. next day i called my insurance and asked for referral to a different company as they still hadn't called me. 5 minutes later i got a testy call from the DME who after much back and forth agreed to see me at 1:00pm. rhe biggest thing they kept stressing to me was that this apt would take 1 hour - i had to reassure them that my employers were so tired of having a sleep deprived wreck working for me they would gladly give me an hour or more for this.

i arrived and was done there in 15 minutes - and that included 10 minutes of waiting for my appointment. should have been the second sign. fast forward to 1 year later - needed a recheck of my sleep because of issues i was having - they send me a computer card to put in the machine to use for 2 weeks. do it - send it in and a week later get a call that the card didn't record anything so they will be mailing me out a new one - that was 9/11/09 i remember cause i was in an airport on my way to Alaska - but figured the card would be there when i got home a week later. nope. called them - no response - finally called an admin who used to work for my company and she brought it to my door - 9/28/10. got a call from them a week later asking where the card was - told em since i had to use it for 2 weeks i still had it in the machine where it belonged. sent it in 2 weeks later and then requested a copy of the report so i could bring it to my followup visit with the sleep doc - got it and almost dropped my teeth - and they are attached! they based all results on a time period from when they sent out the first card to when they received the second - 40 days. and for some reason it doesn't record weekends so it looked like i only used it for 10 out of 40 days. i lost it at the doc's office and did get referred to a new DME.

they have not been much better but this is long enough already. leave it to say - i discovered last week that i have spent a year with the wrong size mask - (i live alone so did not realize how much leakage i was getting - should have known the cats were sleeping by my head again for a reason).

now my insurance does not cover a lot of my replacement supplies - so give me a reason why i should not go it on my own and try the online method of obtaining it. i cannot do worse than the care i have not received from the local DME's - and finding the good RT that was initially described is a battle i do not have the time or patience to try and fight

[Rogue Uvula]

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.

If the cost is $1750,
80% = $1400
20% = $350 (not $179.80)

IMHO, one of the worst aspects of most DME is they default to CPAP units without data capability (even when it doesn't make sense). If you use a CPAP yourself, I would presume you are an exception to that rule.

[el_zorro]

Another trick that the DMEs play is the so-called rent-to-own scheme. At first it may look like they are just helping to spread the cost of the deductable, but then when the calendar year rolls over, you have to pay another full years deductable on the rent to own payments. Therefore your deductable is doubled to around 40%. I tried paying cash at my DME and they refused to allow me to pay cash stating that the insurance company required rent-to-own. The truth was that the only risk was that once you pay the deductable you cannot get a refund for the deductable if for some reason the CPAP does not work out for you, the insurance company cannot force you to rent-to-own and not pay cash up front. If you dont believe this, just send a check in for the full payment and the DMEs billing service will post the payment even if they try to talk you out of it initially. It usually takes more calling to explain to them that you have made the full payment of the deductable up front, but after wrangling with their billing department and threats to contact the Attorney General for billing fraud usually straightens them out.
For those on the board who work for a DME I am not trying to get personal here. I realize that many people that work at DMEs are really trying to help patients and you also probably have to put up with a lot of patients that require tons of time learning to use and adjust to their CPAP therapy. It seems that the fair way would be to bill these patients a surcharge and not make the other patients pay for these costs.

It would be nice if someone that works for DME would provide us an estimation all of the soft costs related to a CPAP and the estimated profits. Then we can look at the numbers without getting too emotional about the topic. My experience is that most DMEs do not even understand all of the convenience settings such as EPR or CFLEX and most users learn how to set these things by themselves anyway. The cost of changing an EPR setting should be very low.
If the profit margin is over 80% or so, then these are questionable pricing practices, especially considering that the OEMs are trying to stifle the market forces of their products.

[jmcd]

Another trick that the DMEs play is the so-called rent-to-own scheme. At first it may look like they are just helping to spread the cost of the deductable, but then when the calendar year rolls over, you have to pay another full years deductable on the rent to own payments. Therefore your deductable is doubled to around 40%. .

The deductible and the rent-to-own scheme are part of your insurance package. The DME has nothing to do with your annual deductible or the required rent-to-own period. My insurer requires a 10 month rent-to-own scheme. Why should they purchase the equipment upfront before knowing if it corrects the problem, is the appropriate equipment (CPAP vs APAP vs BiPaP), and if the insured is using the equipment? It doesn't matter if I own the machine or am still in the rental period, come 2011 I will have to meet my deductible before my insurance carrier pays toward any of my claims (CPAP related or otherwise).

[Rogue Uvula]

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.

Let me throw out how this would work out for your scenario with my insurance. My insurance 80/20 in network and 60/40 out of network.

So, at $1750 in network, I pay $350.
At $899 out of network, I pay $356. I do have to fill out the paperwork, but it wasn't very difficult at all.

So the price is essentially the same. So, if I knew a DME who would give me what I wanted, I would go with a DME. However, I viewed it as: I could argue with the DME about needing an AutoPAP, not knowing how much resistance I would confront or how long the DME might drag things out (they already said they didn't stock AutoPAP equipment). Or, I could place an order (and pay another $28 to get it delivered in two days - before the weekend) and start therapy right away! Ding! Ding! Ding! We have a winner!

I appreciate where your post is coming from, but I feel you are lucky to work in an area where your job seems to be to actually care for the patient!
However, I don't think you fully appreciate the more common DME approach to a patient's therapy. The DME I went to essentially gave me a ResMed Escape II and a Mirage Micro and said "here, take this home". If they had even given me a second mask to try, or said I could bring this one back and try another, I would have at least felt like they were doing something for me! When I said "no thank you", she said they had never had anyone walk away without their gear (which I never would have done without this forum)!

Last, depending on your insurance, we would get stuck with the CPAP for 3 years, 5 years, or until it breaks! If there are problems, that can be a long time before you can take charge of your own health.

[jonquiljo]

Well the big disconnect is that most think that health care is free. It is not. Insurance companies play games with Dr's, test providers, and even DMEs. It's a game - and since most people have insurance paid by their employer (not me!) they think that everything is an expense. The problem is that everything IS an expense. It costs a big chunk of someone's earnings to keep them in good health.

Just be aware that most of these providers are trying to rip each other off - and you get ripped off in the process. Welcome to the 21st century!