New CPAP - Being ripped off on my machine?

LSAT wrote: Granny...This is what they told him.....
"I called them on the phone and they claim the difference in price is because the price submitted to the insurance company includes their cost for ongoing service and care."

The Latinist wrote:Providers -- be they doctors, hospitals or DMEs -- always submit wildly-inflated charges to insurers. The fact is that they bear little or no relationship to their actual costs or what they expect the insurer to pay. The truth is that all providers have negotiated rates with insurers -- rates which they must agree to in order to accept and bill that insurer. These rates are called "usual and customary" and are the MAXIMUM amount that they can receive under the contract. They can bill the insurer whatever they want, but they will receive and have agreed to accept only what the insurance company allows. *

It is unlikely that there is a "charge upfront for ongoing care". They probably just told him they have to charge more than an internet supplier because they have a B&M operation including staff to assist in person with customers. Most B&M suppliers will tell you that. And it is true that their operating costs are higher.

You are having trouble, and with EFFICACY data (AHI and leak data) we can help you, but if you don't have that data you're SOL. More than likely, the DME has already taken advantage of your ignorance and given you the bottom of the line machine.

Providers -- be they doctors, hospitals or DMEs -- always submit wildly-inflated charges to insurers. The fact is that they bear little or no relationship to their actual costs or what they expect the insurer to pay. The truth is that all providers have negotiated rates with insurers -- rates which they must agree to in order to accept and bill that insurer. These rates are called "usual and customary" and are the MAXIMUM amount that they can receive under the contract. They can bill the insurer whatever they want, but they will receive and have agreed to accept only what the insurance company allows. *

For my most recent sleep doctor appointment, my insurance company was billed $198.00. They did this even though they knew that the amount BC&BS would allow was $127.79. My contract with my insurance company says that I must pay a $30 copay. So my insurance company paid $97.79 and I was billed $30. My sleep doctor is prohibited by state law and his contract with BC&BS from trying to collect the extra $70.21.

The same is true of medical equipment. In your case, it sounds like the negotiated rate between your insurance company and DME is $2,000. That seems incredibly inflated and I have a hard time believing that figure -- my insurance company's negotiated rate was around $850 -- but, assuming for the moment that it is correct, your DME can collect only $2,000, no matter what charges they put on paper. Since you have a 20% coinsurance (and assuming you have no deductible), you will be responsible for 20% of $2,000, or $400. Your insurance company will pay $1,600. Your DME will get $2,000 total, no matter what they say the machine costs. If they try to make you pay the $700 difference, you should contact your insurance company and perhaps your state's insurance commissioner or attorney general (depending on how your state handles double-billing complaints).

So what you need to know before going in to your DME is:

1. What your Insurance company considers Usual & Customary charges for CPAP machine, humidifier, mask and filters.

2. What your coinsurance rate is (you already know this: 20%).

3. What if any deductible (the amount you have to pay before your insurance will pay *anything*) you have.

Armed with that information, you will be able to calculate exactly how much your DME can charge you for what it is selling you.

* So why do DME's put ridiculously-inflated fantasy prices on their invoices when they know they will never be able to collect that much? That's a difficult question. It appears to be part of a bargaining strategy, much like MSRPs on cars. In both cases, no educated car buyer or insurance provider will ever pay the asking price. But providers seem to think that if they charge reasonable rates the insurance company will still try to get them to reduce them, so they put inflated figures down so that they can claim to have already made huge concessions. I can't imagine that such a ploy actually has any real effect -- the insurance companies know just as well as the DMEs how much it actually costs to provide the service.

To avoid getting ripped off, refuse to pay the DME UNLESS and UNTIL you have received an "Explanation of Benefits" from the insurer outlining exactly what the insurance company will pay and what your share of that is.

CPAP/Bi-PAP machine - Amount Claimed 2,093.00
-> See Note D47 Below
CPAP/Bi-PAP machine - Amount Claimed 678.00
-> See Note D47 Below

Note X001: Payment will be limited to the reasonable and customary amount of $2000 for cpap unit, supplies approved @80% coinsurance, minus any plan deductible which may exist.
Note D47: The estimate for this expense is approved.  Please remember that the actual amount payable is subject to any plan coverage limits and deductible that are applicable. 

chunkyfrog wrote:Some of the prices seem outrageous, but I put them in perspective.
My hearing aid cost more than a full cpap setup; as does a really good mattress.
A cushion costs more than a bra, but the bra is not saving my life.

My DME (which I consider to be better than most by far) charges me and my insurance company $72.00 for a replacement seal for my Quattro Air. It costs $54.00 total on a straight purchase from our kind hosts.

So a lot of these insurance things are still going over my head, but I think part of the problem is I live in Canada so the insurance works different from the states. I have what is called extended health insurance (through Sun Life) that covers me for extended expenses above what normal free healthcare covers. There is no network, but the flip side to that is most Doctors and medical companies don't direct bill the insurance company. I pay the fees up front, and then submit a claim to Sun Life who reimburses me after the fact.

Therefore unfortunately, the DME can charge me whatever the can get me to pay, and i'm left holding the bag on anything the insurance doesn't repay.

They have given me good service during my trial, without charging me a cent (beyond the deposit on the machine), and even let me take home and try out tons of masks. So I would feel really rude just walking out on them, but by the same token I still can't correlate what they are trying to charge me versus what I see online. Added costs of care, and a B&M office are one thing, but its a large leap to go from the $1,015 I can find the same equipment online, to the $2,771 they are asking.

ShelaghDB wrote: Yet you are Canadian and I am pretty surprised to read this

ShelaghDB wrote:You don't say WHERE you are in Canada?

Depending on what your sleep apnea is, the type, what machine you need, etc, I am in Toronto and i just purchased on Kijijij the S9 AUTOSET machine which is the most desired, brand new, comes with everything, a carry all bag, a climate hose, AND he even throws in a brand new Wisp FX Nasal mask I think it was called, still new in its package and i only paid $650

I had to do that for my insurance or doctor would not provide anything more than an S9 Escape which is a brick and a POS you don't want.

IF YOU LIVE IN TORONTO by any chance i can give you the guys number and show you his ad...........many a time its cheaper to buy online than it is through the insurance, DME, etc

Agathorn wrote:

ShelaghDB wrote:You don't say WHERE you are in Canada?

Depending on what your sleep apnea is, the type, what machine you need, etc, I am in Toronto and i just purchased on Kijijij the S9 AUTOSET machine which is the most desired, brand new, comes with everything, a carry all bag, a climate hose, AND he even throws in a brand new Wisp FX Nasal mask I think it was called, still new in its package and i only paid $650

I had to do that for my insurance or doctor would not provide anything more than an S9 Escape which is a brick and a POS you don't want.

IF YOU LIVE IN TORONTO by any chance i can give you the guys number and show you his ad...........many a time its cheaper to buy online than it is through the insurance, DME, etc

I'm in Vancouver.

Agathorn wrote:I'm in Vancouver.

Agathorn wrote:Or it might be that I just haven't shopped around. I just went to the one my doctor referred me to. There are tons of them I could have gone to instead, heck one street away theres like 3 other DMEs within a block.