Let's clear up some misinformation

Grand-PAP wrote:Hi LTTS,

First, I understand and respect your point of view, but as many have posted above, there are many instances of what "appear" to be unethical DME practices. Here's my example . . .

My understanding (and I could be totally wrong) my Medicare CPAP machine was rented on a 13 month contract. The contract was with a national company that I won't mention the name (however they probably chose the name because it was similar to apnea.)

Again, I could be wrong, but my understanding is that it is NOT a total rental. My understanding is that the CPAP machine is RENTED but the Humidifier is SOLD. So, if that's the case, the DME should CHARGE Medicare a SMALL amount for the Humidifier and LEASE a LARGE amount for the CPAP.

I am looking at the SALES SERVICE AND RENTAL AGREEMENT dated 11-23-2011:

RENT -- S9 ELITE W/0 HH --> $331.52

SALE -- CPAP HUMIDIFIER HEATED H5I --> $745.00

SRVC -- CPAP TUBING --> $125.44

SRVC -- CPAP FILTER DISP --> $ 11.67

(I assume SRVC means Service, but I'm not sure what that means.)

I suppose using you analysis, the DME made a clerical error. I'm sure they didn't switch the values so they could collect the SOLD value up front and LEASE the smaller amount.

No -- couldn't be. I'm just one of those cynical posters.

If you look at your Explanation of Benefits from Medicare after the bill was paid, you will find that the DME was actually paid about 1/2 (or less) of what they billed.

LLTS, would you say this is a quick summary of what you're saying?

1. For insurance code {whatever}, the insurance company is only paying the DME a single dollar amount, end of story.

2. The price determined for insurance code {whatever} is determined by the insurance to be the price for something that will do the basic job successfully (or in our terms, a compliance-recording-only CPAP).

3. If you're trying to get a machine that isn't covered by insurance code {whatever} due to it being pricier, the extra money has to come from somewhere, and that somewhere will either be your pocket, or the DME's pocket.

4. The DME is a store; they stock whatever they decide to stock, and if they don't have something, you go to another store. Hopefully one that's in-network carries the supply you need.

5. Therefore, as valuable as full-data (AHI, tidal, etc.) or auto-titration may be to a patient's treatment, due to #2 and #3, the usual case is the DME will not supply a machine with these features (except in the case of #4).

Would you review this for accuracy, and clarify?

But you aren't going to get great product selection and service when the insurance contract pays low reimbursement rates. It's like going to MacDonald's and expecting a waiter and a 4 star menu. Not going to happen. And the insurance company does not give a rat's patooty about the service and product selection.

To use your analogy of restaurants: My doctor has prescribed "one restaurant meal" in order to treat my medical condition. My insurance company has contracted to pay the DME-restaurant $12 to provide me with "one restaurant meal". And the same billing code covers both a semi-decent Old Country Buffet Meal and a Big Mac Extra Value Meal. Now, I know enough to know that $12 is enough to pay for the semi-decent Old Country Buffet Meal (about $11 locally here in Buffalo) and that $12 is far more than the standard price of a Big Mac Extra Value Meal (about $7 locally here in Buffalo).

So I walk into the DME-restaurant and politely ask if I can please get the Old Country Buffet meal since I've effectively got $12 to pay for the meal and this meal is covered by my insurance company's billing code for the meal my doctor prescribed for me. But the DME-restaurant insists that all my $12 will pay for is an overpriced Big Mac Extra Value Meal. And they insist that there's no real difference between that $11 Buffet and the $7 Big Mac meal anyway---that I won't be able to tell any difference between the two meals. And then they tell me my insurance company simply won't pay for the Buffet meal---that I have no choice but to accept the overpriced Big Mac Meal instead of insisting on getting the Old Country Buffet Meal that my $12 will actually pay for and that will be better for my health in the long run. Or perhaps they tell me that the $11 Old Country Buffet meal is a deluxe item (because it contains some real veggies) and that unless my doctor specifically prescribes it, I'm not even allowed to request it, let alone eat it. (Gotta watch those real veggies---they really drive up the price of the meal!) Or perhaps they tell me that they can "upgrade" me to the Old Country Buffet meal by charging me (but not my insurance company) a $4 dollar "upcharge fee"---so that the DME-restaurant collects $12 + $4 = $16 dollars for a meal that should only cost me $11.

Now please explain to me just why I should be so stupid as to pay $12 for a Big Mac Extra Value Meal that I can readily get elsewhere for $7? Particularly when I can call around and find another DME-restaurant that will let me buy the Old Country Buffet meal for the $12 price my insurance company has contracted for?

Getting back to CPAPs: Between the patient's copay and the insurance company's share of the bill, my insurance company reimburses an in-network DME $900 for any E0601 cpap machine. And $900 is enough to buy a brand new Resmed S9 AutoSet RETAIL from on-line shops AND from honest DMEs selling to folks buying CPAPs totally out-of-pocket. And yet you keep claiming that I have no right to insist that I get my full $900 worth of CPAP equipment---that I should understand that legally the DME is only obligated to provide me with a machine that has a RETAIL price of $550-$600 even though they will charge me and my insurance company the full $900 my insurance company has agreed to pay. And that I should NOT feel "ripped off" by the DME when this happens.

It looks like I need to be VERY critical in selecting a Medicare supplement.
Apparently, deluxe insurance plans seem to be a crap shoot.
"Do you feel lucky, Pops?."

So unless you start looking to the real source of the problem - insurance payers - get used to getting what your insurance company is willing to pay for.

As others have pointed out, we've got plenty of blame and complaints about our insurance companies too. I absolutely hate the fact that my insurance company makes me pay a 50% copay for CPAP supplies on a overextended replacement schedule.

But guess what? Most of us have absolutely NO control over what insurance company we use. Our employer picks it. And once you've got a diagnosis of OSA, you need that employer provided insurance even more. Want to hazard a guess as to what having an OSA diagnosis does if you're in the nasty situation of having to buy private health insurance all by yourself? And if you're even lucky enough to find a company that will insure you, what's the chance that they'll exclude all CPAP supplies as "pre-existing condition" expenses and refuse to cover them at all? Of course, then you as a patient must navigate the whole DME thing by yourself. It has its advantages: If you're not trying to save your own money by using insurance, you're free to use any CPAP supplier you want. And you vote with your feet and go to a DME that will sell you the equipment you need for reasonable prices OR you buy on-line.

So as patients with OSA we are no position to argue with our insurance companies: We can't shop around and replace them. But for most of us, we find that if we do our homework, we can shop around for DMEs. And if it's possible to shop for the DME, then it's possible to find an honest one that will take that $900.

And as for Medicare and it's "lousy" reimbursments: According to Remed's on information in this PDF on the Resmed web pages, the Medicare assigned rental amounts vary from $80.80 to $101.00 per month. And this pdf on the Mayo Clinic web pages (pages 25-26) explains exactly how the billing and medicare reimbursement works in Minnesota. According to the Mayo Clinic, in Minnesota, the Medicare allowable amount for CPAP rental for months 1-3 is $87.63. For months 4--13, the Medicare allowable amount for CPAP rental is $65.72. The Medicare allowable amount figures include both the patient's 20% copay and the part that Medicare itself pays. So in Minnesota the full amount a DME receives from a Medicare patient for a CPAP is:

(3 * $87.63) + (10 * $65.72) = $262.89 + $657.20 = $920.09

And $920.09 is indeed enough to pay for a Resmed S9 AutoSet at our host.

So I don't think providing a Medicare patient with a full efficacy data, but straight CPAP machine like the Resmed S9 Elite or a PR System One Pro is going to break the back of the DME.

Robysue, perfect analogy, priceless! And you've made me so hungry I'm going to McDonald's right now, they just closed our local Old Country Buffet recently!

Feeling quite an outsider to the forum in general, this thread with 260 posts in three days caught my attention. Intrigued about the forum, I read through the entire thread.

My insurance company (a large one) starting in 2012 no longer covers any CPAP equipment and I have heard that another large one has dropped CPAP equipment from all new contracts. (Maybe someone can confirm that second part.)

I see this as a good move for the business in general with the caveats that the FDA should drop the prescription requirement and Medicare should also stop covering CPAP equipment.

These moves will open up the market to true competition, the machine suppliers will seek new efficient distribution channels, and will support patient education in a big way. Prices will fall and customers will find it easier to get the machine they want whether it be super-duper deluxe luxury or basic box.

Charities will find it easier and cheaper to get equipment to the clients they select.

Things will shift in such a way that more people get diagnosed, more people get educated, and more people achieve successful longterm CPAP therapy.

There are many ridiculous quotes (from all sides) that could be cited but let me cite only one:

wrote: Another problem with her complaint is that all the free marketers keep saying the Gov't should buy more stuff with open market bidding.

"Free marketers" all would say, "Why the hell is the government buying CPAP machines? That is sure to result in great mischief."

Then there is one wonderful breathe of fresh (maybe even pressurized) air in the thread:

Slartybartfast wrote:Looked at another way, isn't it wonderful what happens to the free market when government mandated regulators step in and make decisions for you?

For the free market to work there has to be freedom for both the producers and consumers to strike their own deal. But when someone with a gun and the power to take everything you have steps between you and your supplier, or you and your customer, and dictates the terms of the deal, then you have the situation that lead to this wonderful interchange.

For myself, I shortcircuted the system and bought the machine I wanted out of pocket.

A pox on them all, I say!

Thank you Slartybartfast!

Thank you, Slarty!
I love the idea: CPAP at your local pharmacy/big box/discount store.
Bring in your prescription; or download the video to view at home.
(the set-up and use manual, when it's no longer a holy manuscript--to sacred to be seen by the common folk.)

wrote: I love the idea: CPAP at your local pharmacy/big box/discount store.
Bring in your prescription; or download the video to view at home.

And no lying about which is data and which is not.

The distributors will not lie because it will quickly hurt their profits.

This is about optimizing profits. The pursuit of optimal profits is what brings the user great products at great prices when there is a market where the user voluntarily deals with the supplier and vice versa.

Today we don't have a market where the user deals with the suppliers. We have governments, insurance companies, and medical professionals all screwing up things between the user (customer) and the supplier.

Robysue, two very, very, good posts.

Grand-PAP wrote:I suppose using you analysis, the DME made a clerical error. I'm sure they didn't switch the values so they could collect the SOLD value up front and LEASE the smaller amount.

No -- couldn't be. I'm just one of those cynical posters.

For some unknown reason based in history what you saw is correct. The humidifiers are indeed sold at the outset while the flow generators are rent-to-own. I'm guessing that years ago the humidifier was an auxiliary device, developed well after the CPAP itself, quite simple in operation and much less pricey than the flow generator. Today's humidifiers are undoubtedly a lot more sophisticated than the ones 20 years ago, and companies like Resmed have chosen to make one humidifier model work with several flow generators.

The problem is that once codes and payment practices are established by Medicare and the insurance companies they tend to get set in concrete and are not readily changed or updated. In that respect, LTTS does have a valid complaint, that codes aren't changed when maybe they should be.

idamtnboy wrote:Robysue, two very, very, good posts.

Only if you think taking a Rube Goldberg system and patching it in every corner with duct tape and bandaids will make things better.

That seems to be what RobySue and many others in this thread think needs to be done.

Sorry guys, duct tape and bandaids will only make it worse.

The system needs to be blown up not taped up.

The Choker wrote:The system needs to be blown up not taped up.

But the Repubs are violently opposed to the slightest idea of a Gov't managed health care system, even though very few Europeans would want to trade their system for ours! The Repubs even resist handing over duct tape. They love it the way it is, screw the consumer and gild the rich.

idamtnboy wrote:

The Choker wrote:The system needs to be blown up not taped up.

But the Repubs are violently opposed to the slightest idea of a Gov't managed health care system, even though very few Europeans would want to trade their system for ours! The Repubs even resist handing over duct tape. They love it the way it is, screw the consumer and gild the rich.

They are just one of the wings of "The Big Party" that you fervently support and have always voted for and always will vote for.

There is not a dime's worth (2012 dollars) of difference between your beloved Democratic Party and the Republican Party.

It is just a simple matter of whom they target to get reelected.

Do you think either one of those parties will do anything bold to deal with the three big spending items that are driving the borrowing and threatening to destroy this country: Military spending (and military adventurism), Medicare, and Social Security?

Pick either party and feel smug about your pick. The results will be the same.

Now surely you don't think either one of these parties is more interested in opening up the healthcare and insurance markets than they are interested in their own reelection, their own power, and their own financial enrichment!

Grand-PAP wrote:Hi LTTS,

First, I understand and respect your point of view, but as many have posted above, there are many instances of what "appear" to be unethical DME practices. Here's my example . . .

My understanding (and I could be totally wrong) my Medicare CPAP machine was rented on a 13 month contract. The contract was with a national company that I won't mention the name (however they probably chose the name because it was similar to apnea.)

Again, I could be wrong, but my understanding is that it is NOT a total rental. My understanding is that the CPAP machine is RENTED but the Humidifier is SOLD. So, if that's the case, the DME should CHARGE Medicare a SMALL amount for the Humidifier and LEASE a LARGE amount for the CPAP.

I am looking at the SALES SERVICE AND RENTAL AGREEMENT dated 11-23-2011:

RENT -- S9 ELITE W/0 HH --> $331.52

Hi GrandPap

SALE -- CPAP HUMIDIFIER HEATED H5I --> $745.00

SRVC -- CPAP TUBING --> $125.44

SRVC -- CPAP FILTER DISP --> $ 11.67

(I assume SRVC means Service, but I'm not sure what that means.)

I suppose using you analysis, the DME made a clerical error. I'm sure they didn't switch the values so they could collect the SOLD value up front and LEASE the smaller amount.

No -- couldn't be. I'm just one of those cynical posters.

Well first of all, national companies are famous for making "mistakes" in billing. I guess we all make mistakes, but they seem to make them pretty often, usually related to billing many more months than they should for a rental. Medicare is 13 months, of course. Most of the Blues are 10 months rental to purchase, and other payers may vary in between 10 and 13 (often 12 months). Some rentals will go on longer than that if the payer has a low rental amount they will just make the DME keep billing until they hit purchase price (often without even disclosing what purchase price is - it's crazy making!).

Now, let me address the real question you have. I personally think every patient needs to understand how to read the estimation of benefits (EOB) that the insurance company sends you, so I am going to try to explain that to you. What you are seeing on the delivery ticket is the billed or submitted amounted. But that has nothing to do with what the DME actually gets paid. The payer wants them to show this fantasy submitted or billed amount to you so they can take credit for negoiating this great discount for you. But the billed or submitted amount (different terms for the exact same thing) are like MSRP or the sticker on a new car. No one pays that. Your DME has it jacked up to about 3 times what the insurance company will pay, which is dumb, but whatever. Doesn't matter because it's a fantasy number.

The insurance company ignores that billed or submitted amount, and your EOB should show that amount, and right next it the "allowed" amount. So in this instance the billed amount was $745 for the heater, but the allowed amount was probably closer to $250 or less. On the PAP device the submitted amount was $331 but the allowed amount was probably closer to $100 or something in that range. The difference between the submitted, for the heater, for instance is written off as a "contractual adjustment" -- nobody pays it. If your plan pays at 80% then the DME will get paid 80% of the allowed amount (in our example of an allowed at $100 the insurance would pay $80), and you would have a copy of $20. If your plan paid at 100% the insurance would pay all of the allowed amount ($100) and your copay would be $0.

So they probably got paid about $250 for the heater, and if they pay 10 month rental for the PAP, then 10 times my example above. So the PAP really is reimbursed at the higher amount. They are just paying for the rental in one payment instead of 10 or whatever your insurance capped rental period is. In any case, you should be able to go back and look at your EOB from the insurance company and verify what I am talking about. Of course I don't know anything about your specific situation -- I'm just describing the norm here.