Medicare CPAP reimbursement cut 47% for DMEs

What burns me up is having to recertify complience when a replacement machine is needed. I have documentation of 100% complience over 1 year at 8+/- hour per night at AHI of 1.2. I also have 99.9% over 10 years. Why waste time and money checking on me when I am having no issues and rather expend the energy on those who need more assistance? Medical care reduced to the lowest common denominator I guess. Now I will resume lurking.

msla wrote:What burns me up is having to recertify complience when a replacement machine is needed. I have documentation of 100% complience over 1 year at 8+/- hour per night at AHI of 1.2. I also have 99.9% over 10 years. Why waste time and money checking on me when I am having no issues and rather expend the energy on those who need more assistance? Medical care reduced to the lowest common denominator I guess. Now I will resume lurking.

A lot of money is wasted by attempting to prevent the wasting of money.

It's like giving people a $2,000 test to make sure that giving them a $400 machine wouldn't be a waste of money.

It all depends on who is getting paid; and whose campaign they contributed to.

by RogerSC on Sat Feb 02, 2013 12:45 pm

Well, could be they're making up for it in volume. Just got 5 nasal pillows and 10 filters, plus a climateline hose and a mask from my DME on Medicare with supplement. So what they're losing on each one they're making up for in volume *smile*?

Roger, i think I have it now. Can't check though...battery is dead in my calculator. I'll give this a try.We can use your supplis as an example.

For the sport of it, lets say all the supplies you listed above cost to the company >............................. in total $210.00
Medicare allowable charge is ............................................................ $200.00
Medicare pays the company 80% of the allowable ....................................$160.00
Supplemental or secondary payment covers the other 20%..........................$ 40.00 Total Reimbursement $200.00
Based on the Total allowed - $200.00 and the reimbursement was $200.00 ------------
-----------------------
Patient Balance = $0.00 Company profit/loss: ($ 10.00)

Bad part: Company lost $10.00 on this one order.
Even worse: Company won a Medicare contract. Their volume increased 10 fold. So with this increase in volume, so they have the pleasure of supplying more volume AND a greater loss of $100.00- Wow wish I had this contract. Lets hope they didn't have to buy a new KIA to deliver the supplies. This about right Roger ????

You make an excellent point. its just more work for the DME without reimbursement for their time. Plus your time - Doc's time and so on.

For the sport of it, lets say all the supplies you listed above cost to the company >............................. in total $210.00

Most likely the company BILLED $210, but in actuality, the item may have cost them far less, even including overhead, personnel, etc. There is a serious disconnect between the BILLED amount and the ACTUAL COST, because in addition to the perhaps $70 wholesale cost, they are allowed to throw in overhead and a bunch of other costs and consider profit margin. So the $210 item didn't really cost them $210, that's just the amount they wish they made on the item.

Companies are accountable to their shareholders, none so much as the bigger DME companies who are going to have the infrastructure to support volume discounts necessary to win competitive biddings. So you have to consider that they are not going to bid to lose money.

As as Kaiser member who has to pay 20% of Kaiser's cost for my CPAP and supplies, I can see what a sweet deal Kaiser negotiated with Crapria. MUCH less than what Medicare is paying for the same stuff--my 20% co-pays are lower than they would be on Medicare by far. I paid $130 total in my 20% copayment for a machine, humidifier, hose, mask and filters. Not per month, TOTAL. And this was for a PR S1 APAP. On Medicare I would have paid at least 10X as much in co-payments alone over the course of the 13 month capped rental. That means that Medicare would have paid 10 times as much for the exact same machine.

Kaiser gives Crapria a huge volume of business, and Crapria is able to cut their costs to the bone by centralizing billing and ordering, drop shipping to avoid any and all patient contact (since Kaiser is technically the DME and Crapria only the supplier, they can do that). Crapria would not be doing this if it wasn't profitable. I'm sure they'd like more profit, but they don't seem ready to pull out of Kaiser and say goodbye to a guaranteed volume of business.

vic wrote:

For the sport of it, lets say all the supplies you listed above cost to the company >............................. in total $210.00

Bad part: Company lost $10.00 on this one order.

Well while we are doing this for sport, let's say the cost to the DME was $110.00

DME's gross margin was $90 on this order. Nice.

Trying to understand Medicare Plus Kaiser I for CPAP payment. My father-in-law needs one. My mother-in-law is getting the run around over who is primary to pay for this. Kaiser says Medicare and Medicare says Kaiser and CPAP company doesn't have a clue. All she is getting out of this is she has to pay 20% once someone decides who pays the 80%. Janknitz - your post is interesting about buying it vs renting it. We thought renting would be cheaper as she was told she would have to pay a hefty bill (the 20%). Can anyone please enlighten me on how this works as I need to call Medicare, Kaiser and CPAP place? Also, should we go with CPAP company that Kaiser recommends or shop around? The part ht suks is tht my father-in-law REALLY needs this but can't afford to pay the high price. Thank you all in advance!!

I would suggest you place a conference call while at the DME's, and refuse to leave until they have hashed it out.