Have to agree with JumpStart here. DMEs (Durable Medical Equipment suppliers) get reimbursed a flat fee (roughly $1500) for dispensing normal CPAP (whether it's a non-data-capable inexpensive model that cost them $500, a data-capable constant-pressure CPAP costing them $700, or an Auto-CPAP costing them $800 - they all use the same medical coding and reimbursement schedule). Nearly all Medical insurance companies must follow Medicare guidelines on CPAP reimbursement, which has the $1500 payment. If they can get you to agree to a low-end $500 model, they will have a $1000 profit. If you (or your doctor) insists upon a higher-end $1000 Auto-CPAP, they make only $500 profit.
They have a vested financial interest in giving you the cheapest CPAP they can find, which maximizes their profit, in other words.
On the so-called "rent to own" system for new Sleep Apnea patients, the only difference is that the costs are spread out over several months to ensure that you're going to be "compliant" with your CPAP therapy. If you don't remain compliant (use the CPAP machine a minimum of 4 hours every night), they will stop paying the DME fees and you will either have to return the CPAP or pay for it out of your own pocket.
There is only one reason why an insurer sees a need to make sure you're compliant with your therapy: it's called cost-control. If you aren't using the machine, they can save money by stopping the "rent-to-own" payments to the DME, thus saving them any future payments towards the cost of your CPAP.
So, for brand-new CPAP users, instead of charging Medicare or the insurance company the full $1500 at one time, it is spread out over several months. Usually, after you have remained compliant for at least 12 months, your insurance company will give the "go ahead" to your DME to charge the remaining balance of the $1500 allotted to them, at which point the CPAP becomes your own property, free and clear.
Quote:Both insurers discount, sometimes rather heavily, what is actually paid against a medical service provider's bill.
Not really. Under the current regulations, they are required to pay $1500 to the DME for your CPAP equipment. They will pay no more than they have to. DMEs can "charge" whatever they please for the CPAP machines, but Medicare or Insurance is only going to pay a max of $1500 for the whole process, no matter what.
Many times what happens is that a DME will "say" that the machine and humidifier, mask, etc. has a list price of $1800 or more. They will send a bill for that amount to the insurance company, knowing full well that the max is going to be $1500. But even though the DME claims the retail price is $1800, the truth is that they probably got the equipment for far less (usually between $500-1000).
If you request a more expensive data-capable or Auto-CPAP machine, many times less scrupulous DMEs, knowing that they will be reimbursed the full $1500 from Medicare or insurance, will go ahead and try to squeeze the additional $300 from the end-user (you), since they can now "claim" that the machine's price was more than just the "basic CPAP model" and your insurance only paid them $1500, so you owe them the extra money (profit) that they lost by not giving you the "basic CPAP machine". This does happen and we've had several members here report that exact same scenario... and apparently, it is legal for DMEs to do this. But there are plenty of DMEs that are satisfied in making the somewhat smaller profits involved in selling you a data-capable or Auto machine. (taking the $1500 from insurance, and paying for a $900 machine, giving them a $600 profit, instead of a $1000 profit if they had given you a low-end CPAP). Some DMEs are out to get as much cash as they can, and will "put the squeeze" on the patients to come up with more cash.
If you want a data-capable machine, or an Auto-CPAP, there are MANY DMEs out there who are willing to give you one and accept the $1500 payment from Medicare or insurance and be satisfied with that. If your DME insists
that you must pay them additional money (for a machine that is already being paid for via Medicare or insurance), RUN out the door and go to a DME that isn't so greedy, or buy one online from one of the online DMEs (which usually have much lower prices). But if you buy online, make sure your company has a procedure in place for reimbursing you for your online purchase.
Don't let the Insurance companies or the DMEs bamboozle you - they are for-profit businesses... with emphasis on the profit. Their primary interest as a company is to maximize income while minimizing costs. They may claim to have your best interest at heart, but the truth is that they are simply wanting to have you remain compliant with your CPAP so they can maximize their own profits. Plain and simple. The faster you realize this, the better off you're going to be and the less you'll get taken advantage of.
And, of course, it's better to realize all this BEFORE you start dealing with a particular DME. (not always possible, I know). Because once you accept a particular DMEs rent-to-own agreement, you're locked into that DME for that period of time, unless you can convince the insurance company that they are committing fraud or not providing adequate service or proper equipment.