Oh those darn DMEs....

I used to be around here a lot, life got busy blah blah blah. But today's experience deserves a post.

I have new insurance and old CPAP accessories. So I find out who my approved DMEs are and make an appointment. The one that sounds the best pushed for an in-home visit, I wanted (and got) an in-office visit. They tell me they have 50 masks in stock, and I know they won't bring them all out. I want the mask that will work for me, not one chosen because it's the best of of 5 she brought with her.

I get there, they tell me all machines have the same cost. All masks of the same type have the same cost. My alarm bells started ringing. The rep showed me 2 masks. Two. "This one is newer." I don't care about newer, I care about what WORKS. They held a plastic ruler up to my nose, told me what size I should get, and ran off to the stock room. No offer to even try it on.

Then the fun began. Cost for a True Blue mask- $140. Headgear: $47. If I was getting a machine, then all machines would have been $1350. I told the rep "The online cost for that mask WITH headgear is $88." (cue tumbleweeds rolling through and eerie silence....) The rep was actually pretty cool, and said she knows the online costs are lower. But she also said "But we would really only charge you your insurance allowable- would be a little lower than those." Too late- don't trust you.

So let me get this straight.... 2 min of a rep's time, machine not even inspected or plugged in, a "maybe it would cost a little less depending on your insurance contract rate (they had verified my insurance prior to the appointment) but I don't know...." comment... that is supposed to be worth a >100% markup? I didn't even get to keep the disposable plastic ruler! LOL

I left, having bought nothing. What a scam.

It's not a Scam....The DME will always bill the total retail price to your insurance company. The insurance company has a contracted price that they will approve...usually much lower that what is billed. Your co-pay (if any) will be based upon the contracted price.

The DMEs mark up the cost to "cover" the "network discount" that the insurance companies pay.
my CPAP and humidifier was billed to my insurance for $1600, network discount of $750, or a final price of $900. My 20% payment would have been $180.

If i would find it on line, I would pay about $800, the out of network copay (40%) would be $320. I get screwed. So I have to stay with the DME. Its kind of like the MOB. They are round a numbers game, their numbers game!

Just for grins.... PR S1 prices when packaged with humidifier. If purchased separately a little difference.

PR S1 Auto CPAP with humidifier and hose...cpap.com price $619
PR S1 Auto IQ (which is a Pro with short term auto mode) with humidifier and hose cpap.com price $595
PR S1 Pro CPAP with humidifier and hose..cpap.com $519
PR S1 Plus CPAP (the brick with only hours of use data) humidifier and hose $395

I believe the carrying case is included with all the above.

Of course if someone has insurance their out of pocket costs very likely would be less if deductible has already been met and especially if online purchase is an out of network purchase. Of course the DME often will do the rent to own thing per insurance contract and so the need for having all the money up front may be easier on the pocketbook.

Sometimes we save money using our insurance and sometimes we save money doing an online purchase.
Sometimes peace of mind getting exactly what you want without DME hassle is worth a lot.

Just as long as everyone does their math and are well informed then there isn't a problem.
DMEs will almost always bill out way more than normal retail and the insurance companies will knock the price down to the allowable amount which may or may not be near an online price.

....I neglected to mention that one of the masks had pillows, and the rep said she was only going to give me one of the included sets of pillows. If I was paying for them, they should have been mine, right?

My deductible reset as of 1/1, and I'm unlikely to hit it this year. (Knock on wood!) So it would essentially be a cash purchase for me. My insurance would have knocked it down about 20%. So still a huge markup. People will have different insurance situations, but a >100% markup followed by a 20% discount, with the only service provided being "here are 2 good ones" isn't worth it. I even told them I was OK with some markup to have a local person to call and to work with local businesses. I've gotten better customer service at KMart. My old DME would plug my machine in, check the settings and pressure, let me try on some masks and help adjust straps. They were definitely pushy sales-wise, but at least they did something of value to me.

Not the worst story out there, but DMEs are a racket more often than not in my experience.

Doesn't surprise me. I thought masks were astronomically expensive. My dme was charging close to $300 dollars. Then I looked online and the same mask is $121. My brother got a bipap. There were charging him over and above what medicare was paying to the tune of around $200 dollars. A month. Now granted it was a bipap and they are more expensive then cpaps but if medicare pays 80%, one or two months should have paid the cpap off, you'd think. What a scam.

backagain wrote:I used to be around here a lot, life got busy blah blah blah. But today's experience deserves a post.

I have new insurance and old CPAP accessories. So I find out who my approved DMEs are and make an appointment. The one that sounds the best pushed for an in-home visit, I wanted (and got) an in-office visit. They tell me they have 50 masks in stock, and I know they won't bring them all out. I want the mask that will work for me, not one chosen because it's the best of of 5 she brought with her.

I get there, they tell me all machines have the same cost. All masks of the same type have the same cost. My alarm bells started ringing. The rep showed me 2 masks. Two. "This one is newer." I don't care about newer, I care about what WORKS. They held a plastic ruler up to my nose, told me what size I should get, and ran off to the stock room. No offer to even try it on.

Then the fun began. Cost for a True Blue mask- $140. Headgear: $47. If I was getting a machine, then all machines would have been $1350. I told the rep "The online cost for that mask WITH headgear is $88." (cue tumbleweeds rolling through and eerie silence....) The rep was actually pretty cool, and said she knows the online costs are lower. But she also said "But we would really only charge you your insurance allowable- would be a little lower than those." Too late- don't trust you.

So let me get this straight.... 2 min of a rep's time, machine not even inspected or plugged in, a "maybe it would cost a little less depending on your insurance contract rate (they had verified my insurance prior to the appointment) but I don't know...." comment... that is supposed to be worth a >100% markup? I didn't even get to keep the disposable plastic ruler! LOL

I left, having bought nothing. What a scam.

backagain wrote:I neglected to mention that one of the masks had pillows, and the rep said she was only going to give me one of the included sets of pillows. If I was paying for them, they should have been mine, right?

Yep, all three should have been yours. I just yesterday went to DME to get a new Swift FX for Her.
The entire package is sealed. All 3 sizes of pillows are included and they should not break the seal unless you wish it and they most certainly should never produce a mask and equipment in which the seal has been broken and you weren't party to the opening of the package.

My DME has never tried to remove anything from the sealed package. I always get all 3 sizes of pillows.

My brother got a bipap. There were charging him over and above what medicare was paying to the tune of around $200 dollars. A month. Now granted it was a bipap and they are more expensive then cpaps but if medicare pays 80%, one or two months should have paid the cpap off, you'd think. What a scam.

Sorry but this is NOT how Medicare Works. Medicare pays ONLY by 13 month capped rental for CPAP/BIPAP machines. They set an allowable monthly rental cost for a BiPAP, and your brother had to pay 20% of that cost while Medicare paid the rest. And yes, $200 sounds right for the monthly 20% of a BIPAP.

Medicare will pay much more than the online retail cost of the BiPAP machine, but in exchange for more money, the DME is supposed to provide you with service.

Janknitz wrote: Medicare will pay much more than the online retail cost of the BiPAP machine, but in exchange for more money, the DME is supposed to provide you with service.

You know, I've been cruising posts here for awhile, and I have to say I am literally astounded by how much disinformation you post between here and your blog. I don't know where you got your education about the difference between online suppliers, DMEs and how insurance pays for PAP devices and supplies, but wherever you got it, you got it wrong. And it's just a shame -- it truly is. I'm an RCP that got her degree in 1984. I have worked in a sleep lab, then for DME businesses, and now I consult with DME companies on meeting the thousands of regulations that they are required to meet so they can stay within the law. So I have 27 yrs of experience in this field, and am considered an expert on regulatory affairs and reimbursement regulations related to DME. Here are the 3 big things you seem to consistently post that are not supported by facts...

1. That the only difference between DME providers and online PAP suppliers is the service component of a brick and mortar DME.

There are many differences, the chief one being that online suppliers are not regulated. Many dispense PAP products against federal laws that regulate those products as prescription only. In addition, many operate in violation of state laws that require competent personnel and a state DME license to dispense RX only products. They do not have to pass any quality assurance checks. In fact many are simply a guy with a computer in his basement who ships out of his garage. They are not accredited as DMEs are required to be, and they have no obligation to assure that you recieve the proper product, or that it is clean and unadulterated, or that it is authetic instead of as counterfeit as the rolex you can buy at the farmer's market stand. They do not have to employ clinical professionals to meet state regulations, nor do they have to answer the phone 24/7/365 if you have a problem -- all of which are required of brick and mortar DMEs that bill your insurance. Nor in fact do they typically bill your insurance because if they did they would have to follow all of those laws and quality standards, and collect much more medical documentation in order to coax the insurance company to pay the bill.

Online suppliers that do follow federal laws and at least require a prescription MAY be a good solution for those without insurance. BUt the buyer should always be aware that they are unregulated. The products cost less because they don't have the overhead of following all the additional regulations that come with the ability to bill insurance providers, including Medicare. Like your high blood pressure medication, PAP devices and supplies are life sustaining products, and you can hardly blame your insurance payer for refusing to pay an unregulated business. But yes, there are many costs inherent in meeting the regulations. You can buy high blood pressure medication on the internet as well, but that doesn't mean your pharmacy, that is regulated, is ripping you off because they charge more.

2. Patients should not have to pay an upcharge for non-medically necessary features

You repeat this one a lot, here and on your blog. Let me be clear, ALL insurance companies that cover DME pay for a basic machine AND THAT IS ALL. You honestly seem to believe that because all CPAP devices are coded as a E0601 that the patient is entitled to any machine they so desire. By all means, shop around and try to find a DME provider that is contracted with your insurance that will give you the cadillac when your insurance only pays for the ford escort, but the DME provider that refuses to do that is not ripping you off -- s/he is either willing to make almost no profit to keep you happy or trying to coax your referring physician into sending them more referrals. Or they are just a poor business person that does not understand their cost of doing business.

But under no circumstances is a patient entitled to a deluxe machine. When deluxe feature sets were added to the PAP device line up 15 or so years ago insurance payers refused to authorize a separate code for the added feature set because they (rightly) determined that these added features were not a medical necessity. Patients might like them, but there is no medical evidence to support better patient outcomes if you can monitor your AHI, or the machine adjusts the PAP pressure on the fly. At least no evidence that has persuaded insurance payers to increase the payment for devices with these deluxe features, that are in fact more expensive.

Insurance payers do recognize that some physicians and some patients want these deluxe features, and that is why nearly all of them allow the patient to be charged an upgrade fee. In fact Medicare has a very specific process for this called an Upgrade ABN, which is a form you sign that acknowledges that you will pay the difference between the basic machine covered by Medicare and the deluxe machine you desire. And it is NOT, as you refer to it on your blog, a non-assigned claim. That is a completely different issue, and completely unrelated to upgraded equipment. The DME is permitted to give you a free upgrade if they so desire, but again, under absolutely no obligation to do so, and is not trying to rip you off if they refuse to do so. They are trying to stay in business in a highly regulated environment with plummeting reimbursement rates.

Another common misconception is that a DME provider must give you a new machine when the payment is on a rental basis. Absolutely untrue. If the insurance company required you to receive a new machine it would have to pay for it as a purchase. However they will not continue the rental payments after 2-3 months (depending on the payer) unless compliance of use is documented. They cannot both require the DME to take back machines of non-compliant patients without further payment, and insist that a new machine be provided. There is not some back room overflowing with used machines of non-compliant patients that are simply thrown in the garbage. Most DME providers do give out new equipment, but there is nothing wrong with following accrediting body approved cleaning and refurb procedures and putting that machine back into circulation.

3. DME make a ton of profit

In reality the DME provider that supplies PAP devices, oxygen, and other respiratory products makes a profit of about 6% on average. The submitted price on the claim is simply the "MSRP" and bears no relation whatsoever to what they actually get paid. The insurance payers want MSRP on the claim so they can take credit for the excellent "discount" they negotiated on your behalf. In addition, Medicare providers are forbidden, by law, to offer a cash discount price in excess of 17% off the Medicare fee schedule.

Also, I've seen you post that private insurance payers set their fee schedules based on the Medicare rates. That's true, but they pay a percentage of the Medicare rate, as in 70%, 60%, even as low as 43% of the Medicare rates. Seldom is it equal to the Medicare rate. How do you think they rake in the billons of profit they rake in? You imply that DME providers are getting Medicare rates across the board. Untrue -- 80% or more of their revenue for PAP is non-Medicare insurance, with fee schedules not even close to what Medicare pays.

In the 27 years I have been in this business I have seen reimbursment rates decrease by 50% or more, while DME providers costs and the regulations they are subjected to increase and increase. DME providers are going out of business, and this is creating access to care issues in many areas of the country. The new Medicare competitive bidding program that is in effect in 10 areas now, and slated to be in effect in 90 more areas in 2013 will reduce reimbursement another 25%. Fifty percent of the independent DMEs will go out of business within a year of that occuring. And that means that the corporate DMEs that have enough money to skate past the regulations (or are willing to pay the fines for violating them as a cost of doing business) will be all that is left to patients.

No one will be there to care if your mask is not fitting correctly, or if your pressure setting needs adjusted. No one will care if you need something past business hours. No one will use RCPs to instruct you on the proper, safe and compliant use of the device.

And by the way, I have seen you post on your blog many times that it's difficult to find or read the Medicare DME fee schedule. It's really not. Here is an always up to date source. Choose the HCPCS code and the state, and it will provide you the fee schedule for that item. Search on HMEdate dot com and you will find it easily.

Last but not least, patients should be aware that Medicare does not pay the monthly fee schedule amount for the entire 13 months. In the 4th through the 13th month they pay 75% of the 80% of the allowable. So as a rule of thumb, take the monthly amount x 80% and then multiply that by 10 and that is the total amount Medicare will pay for a rental item over the course of 13 months.

I have yet to see a DME that provides 'service' that is anything more than sales-oriented.
I am getting ready to fire my second one.
Crooks!

chunkyfrog wrote:I have yet to see a DME that provides 'service' that is anything more than sales-oriented.
I am getting ready to fire my second one.
Crooks!

There are over 100 thousand Medicare approved, regulated DMEs in the US. If you only have experience with 2 I would say that's not a large enough sample size to characterize them as crooks. The physician that prescribed your device should have experience with the service component of the DMEs in your area. Ask him/her for their recommendation or ask the sleep lab that did your test.

LTTS wrote:

chunkyfrog wrote:I have yet to see a DME that provides 'service' that is anything more than sales-oriented.
I am getting ready to fire my second one.
Crooks!

There are over 100 thousand Medicare approved, regulated DMEs in the US. If you only have experience with 2 I would say that's not a large enough sample size to characterize them as crooks. The physician that prescribed your device should have experience with the service component of the DMEs in your area. Ask him/her for their recommendation or ask the sleep lab that did your test.

Ha ha - laughing my head off - the doc will refer you to the one he has a stake in of course. Or he will do what mine did - hand me a bad photocopy of a list of names