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[Equipment] Insurance Benefits
#1
I hear a lot of people claiming that there is a fixed amount that insurance companies will pay for a CPAP machine, and that DME providers can maximize their profit by providing the patient with the lowest cost machine available.

I have always doubted that this is universally true. Here's what one insurance company, UnitedHealthcare, has to say about it.

If more than one piece of DME can meet your functional needs, you will receive Benefits only for the most Cost-Effective piece of equipment. Benefits are provided for a single unit of DME (example: one insulin pump) and for repairs of that unit. If you rent or purchase a piece of Durable Medical Equipment that exceeds this guideline, you may be responsible for any cost difference between the piece you rent or purchase and the piece UnitedHealthcare has determined is the most Cost-Effective.

So it may be that if you want a more expensive CPAP machine you will have to pay an additional fee. This additional fee is not set by your insurance company, but by the DME provider. Shop around for the best deal. Don't let your doctor or any other health provider tell you what equipment you must get. Call your insurance company and get a list of approved DME providers. Tell your doctors that if they won't prescribe the machine you want you'll go to another doctor who will.

There are good health care providers and good DME providers out there, but you will probably have to go looking for them. Don't just assume that you have to settle for whatever level of service they provide.
Sleepster
Apnea Board Moderator
www.ApneaBoard.com


INFORMATION ON APNEA BOARD FORUMS OR ON APNEABOARD.COM SHOULD NOT BE CONSIDERED AS MEDICAL ADVICE. ALWAYS SEEK THE ADVICE OF A PHYSICIAN BEFORE SEEKING TREATMENT FOR MEDICAL CONDITIONS, INCLUDING SLEEP APNEA. INFORMATION POSTED ON THE APNEA BOARD WEB SITE AND FORUMS ARE PERSONAL OPINION ONLY AND NOT NECESSARILY A STATEMENT OF FACT.
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#2
(02-01-2013, 10:28 PM)Sleepster Wrote: I hear a lot of people claiming that there is a fixed amount that insurance companies will pay for a CPAP machine, and that DME providers can maximize their profit by providing the patient with the lowest cost machine available.

I have always doubted that this is universally true. Here's what one insurance company, UnitedHealthcare, has to say about it.

Oh she figured the cheapest simplest machine would do just fine. I guess she doesn't get many challenges. I regret not knowing my options sooner so I have to back track and get on her case regularly.
At regular intervals I wake up and I have a message on my CPAP reminding me to harass Tracy about the AutoSet again.
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#3
(02-01-2013, 10:28 PM)Sleepster Wrote: I hear a lot of people claiming that there is a fixed amount that insurance companies will pay for a CPAP machine, and that DME providers can maximize their profit by providing the patient with the lowest cost machine available.

Sleepster,

Here's the HCPCS (insurance code) for a ResMed S9 Series - Escape, Escape Auto, Elite & Autoset: E0601 is the same code for all 4 flow generators, there's about a $250 price difference between the cheapest version (Escape) and the AutoSet.

They (insurance) pay the same amount for any S9 listed above, their (DME) profit margin is determined by which one they stick the unsuspecting patient with.

The replacement H5i humidifier water tubs all have the same payment code: A7046 which covers the Standard Water Tub or the $30 higher Cleanable Water Tub, which one do you think a DME wants to give a patient? A $20 tub or a $50 tub when they get paid the same regardless.

The S9 Series air filters also have only 1 insurance code: A7038 covers either a standard filter or the twice as expensive hypo-allergenic filter.

The incentive, unfortunately, is for a DME to try to give the unsuspecting patient the product that cost's them less money so they can maximize their profit margin at the patient's expense.

Ren
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#4
I believe that's just good business. If a patient is educated and has reviewed all the machines and determined what they need, I think they should get that machine. The people on the forum are a special breed. WE are serious about our treatment and health. We use the machine 100% of sleep time, we replace supplies regulary (an old mask cushion does not seal like a fresh one and an old dirty filter is a disgrace) and we want the best. Next time you see the respiratory tech at your equipment provider ask them how many people fail at CPAP and the machine gets relegated to the closet or sold on craigs list or if we're lucky turned in to the DME. We're the ones who ultimately pay the price for the lost CPAPS with increased insurance costs. I have two friends on CPAP, one has hers in the closet and the other one, a respected business woman doesn't care what her AHI runs. She feels good and that's enough for her.
I AM NOT saying that someone who has done research should not get the machine they have determined best meets their needs. Maybe the DME's should ask "do you participte in an online XPAP forum?" to determine a patients chance of success. If you don't have a clue about CPAP and are not convinced you need it and it collects dust on the nightstand and there is no distilled water in the house all you need is a brick.

Remember, for the majority of people CPAP is probably just another hassle and hoop to jump through for the doc. They are not convinced they need it and can't look past today in regards to maintaining their health.

I don't want to offend anyone, just an opinion.
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#5
(02-02-2013, 01:29 AM)TheWerkz Wrote: Here's the HCPCS (insurance code) for a ResMed S9 Series - Escape, Escape Auto, Elite & Autoset: E0601 is the same code for all 4 flow generators, there's about a $250 price difference between the cheapest version (Escape) and the AutoSet.

They (insurance) pay the same amount for any S9 listed above, their (DME) profit margin is determined by which one they stick the unsuspecting patient with.

Huhh?! If the insurance company deems the cheapest one to be "the most Cost-Effective piece of equipment" then that's the one the patient can have with no money due to the DME provider by the patient.

If the patient wants a more expensive unit that costs an additional $250 and the insurance company charges the patient $250 then the profit is the same. On the other hand, if they charge the patient an additional $300 then they get a greater profit.

What part of this am I not understanding?
Sleepster
Apnea Board Moderator
www.ApneaBoard.com


INFORMATION ON APNEA BOARD FORUMS OR ON APNEABOARD.COM SHOULD NOT BE CONSIDERED AS MEDICAL ADVICE. ALWAYS SEEK THE ADVICE OF A PHYSICIAN BEFORE SEEKING TREATMENT FOR MEDICAL CONDITIONS, INCLUDING SLEEP APNEA. INFORMATION POSTED ON THE APNEA BOARD WEB SITE AND FORUMS ARE PERSONAL OPINION ONLY AND NOT NECESSARILY A STATEMENT OF FACT.
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#6
(02-02-2013, 09:38 AM)zimlich Wrote: I don't want to offend anyone, just an opinion.

The light bulb turns on - click! Makes perfect sense to me.
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#7
on-line, the price difference is less than $100 between S9 Escape and S9 Autoset
there is no separate billing code for each machine and any cpap/apap paid by the same billing code E0601
both insurance and DME only interested that machine used 4 hours 70% of the time and couldn't care less whether therapy is successful or not

the doctor is the ONLY ONE who specify type of machine on the prescription
good doctor want to prescribe data capable machine to all patients so he/she can use the data to monitor their therapy

its always good news when newbies find out about machines choices beforehand and ask the doctor to write "DISPENSE AS WRITTEN" on the prescription to avoid being flogged with a brick







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#8
(02-02-2013, 02:03 PM)Sleepster Wrote: Huhh?! If the insurance company deems the cheapest one to be "the most Cost-Effective piece of equipment" then that's the one the patient can have with no money due to the DME provider by the patient.

If the patient wants a more expensive unit that costs an additional $250 and the insurance company charges the patient $250 then the profit is the same. On the other hand, if they charge the patient an additional $300 then they get a greater profit.

What part of this am I not understanding?

I'm hopefully not giving too much of a simplistic explanation for this, and I apologize for being so wordy and somewhat repetitive... but from what I've heard from actual DMEs, insurance companies in the U.S. must operate under CMS guidelines for reimbursement, since CMS has official regulatory oversight over the health insurance industry. The E0601 billing code is used for all classes of CPAP, whether a constant-pressure dumb brick CPAP or a fully data-capable auto-CPAP. (please note that bi-level devices are a separate category using the E0470 code) And, the reimbursement to the DME is roughly $1500-- no matter what CPAP machine is given to the patient. (I believe the $1500 payment also includes the cost of a humidifier, initial filters, mask and mask parts [under separate codes]).

It makes no difference if the machine is rented or purchased. If purchased outright, the DME is reimbursed $1500 immediately. If it's under the "rent-to-own" plan, that $1500 is stretched out over a few months via a monthly fee, but the insurance company will reimburse no more than the $1500 towards that rental. If the patient who is under a rental plan remains compliant, eventually the patient becomes of the actual owner of the machine and monthly rent-to-own fees stop when it reaches the $1500 level.

Quote:If more than one piece of DME can meet your functional needs, you will receive Benefits only for the most Cost-Effective piece of equipment. Benefits are provided for a single unit of DME (example: one insulin pump) and for repairs of that unit. If you rent or purchase a piece of Durable Medical Equipment that exceeds this guideline, you may be responsible for any cost difference between the piece you rent or purchase and the piece UnitedHealthcare has determined is the most Cost-Effective.

I think this quote from the insurance company is accurate, but it is a general boilerplate statement created to give a standard reply to all patients who have these cost questions. But you have to read between the lines and understand the terms they are using, especially the use of the word "guideline"....

We have had several folks here who have the same insurance company and have both been diagnosed with OSA, but one of them was given a non-data capable "brick", while the other (who insisted upon a higher-end machine) received a data-capable Auto-CPAP. The only difference between the two is that the 2nd patient was more insistent and did not accept what the DME told them as being completely true.

Although the insurance company statement may seem to suggest that they are the ones who makes the decision between a REMstar Plus, REMstar Pro or REMstar Auto based upon cost-effectiveness, that is just not true. They are making that statement to ensure that the patient will not be given an expensive $3900 REMstar BiPAP Auto SV Advanced, when all they need is basic CPAP that will come in well under the $1500 cost limit. If the patient insists upon the higher cost $3900 machine, this statement is saying that the cost-effectiveness guidelines (set by CMS) will limit the amount paid by insurance, and in that case, the patient would have to pay the difference (3900 - 1500 = $2400)

Within the $1500 guidelines, the insurance companies don't really care which one is given to the patient - primarily they are in the business of making money and controlling costs to maximize their profits; they just aren't involved with the practice of medicine, other than to make money by selling insurance policies and paying out as little as legally possible for any claims against those policies, without tarnishing public perceptions of providing good customer service combined with low premiums.

The insurance company pays the same $1500 no matter which of those 3 machines (listed above) are dispensed to the patient. That $1500 is set by CMS. Within that $1500 cost ceiling, the choice of which CPAP is best for the patient is not determined by the insurance company. Ultimately, it is the patient who has the power to insist upon a data-capable CPAP or APAP. And they can insist, as long as the DME's retail price for that unit is less than $1500 (which is usually is). And, in nearly all cases, patients do not have to pay additional costs, since even the cost of the best data-capable APAP is well within that $1500 limit.

The "guideline" they use in their above quote is the $1500 guideline. In other words, they are saying "if you rent or purchase a CPAP that exceeds that CMS guideline cost ($1500), then yes, you as the patient will be responsible for any costs over that $1500 limit". Therefore their above statement is basically meaningless to users of standard CPAP, because all of the common CPAPs come in well under the $1500 cost limit.

So, it is in the best financial interest of the DME to give you a low-end, low-cost CPAP machine, because they can pocket more of that $1500 reimbursement money that comes from the insurance company.

I'm simplifying, but here's a basic example:

If the DME gives you a $450 REMstar Plus brick, a $100 mask and a $225 humidifier (adding up to $775 cost), they make roughly $725 gross profit. ($1500 - $775)

If the DME gives you a data-capable $640 REMstar Auto, a $100 mask and a $225 humidifier (adding up to $965 cost), they make roughly $535 gross profit ($1500 - $965).

So, the DMEs lie to patients and tell them that the REMstar Plus brick is all they "qualify for". Why? So the DME can make more profit.

Once you understand the terminology and how this system works, you can become more assertive and insist with great confidence that you will only accept a data-capable CPAP or APAP. If the DME does not agree, leave and go to another DME who will be reasonable. But most likely, if a front-line staff member tries to pull the wool over your eyes, ask to speak to the manager. If the DME manager senses that you may walk out the door, they will eventually give in and give you what you want, because making some profit is still better than making no profit.

We've heard from several members here who have done exactly that with good results.

Does my explanation make any sense, Sleepster?

Coffee

SuperSleeper
Apnea Board Administrator
www.ApneaBoard.com


INFORMATION ON APNEA BOARD FORUMS OR ON APNEABOARD.COM SHOULD NOT BE CONSIDERED AS MEDICAL ADVICE. ALWAYS SEEK THE ADVICE OF A PHYSICIAN BEFORE SEEKING TREATMENT FOR MEDICAL CONDITIONS, INCLUDING SLEEP APNEA. INFORMATION POSTED ON THE APNEA BOARD WEB SITE AND FORUMS ARE PERSONAL OPINION ONLY AND NOT NECESSARILY A STATEMENT OF FACT.



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#9
(02-03-2013, 12:45 AM)SuperSleeper Wrote: I'm simplifying, but here's a basic example:

If the DME gives you a $450 REMstar Plus brick, a $100 mask and a $225 humidifier (adding up to $775 cost), they make roughly $725 gross profit. ($1500 - $775)

If the DME gives you a data-capable $640 REMstar Auto, a $100 mask and a $225 humidifier (adding up to $965 cost), they make roughly $535 gross profit ($1500 - $965).


I'd like to point out that the goal of any business is to make money. It makes sense that the DME would want to make the biggest profit possible.

That profit doesn't just line the pockets of the owners. The profits also pay for the operating expenses and for the employees' salaries. I have seen 3 different technicians at my DME. All 3 were kind, courteous, helpful and didn't rush through my appointment. I'm guessing that my DME is making enough of a profit that the people working there aren't pressured to get through every appointment. This is unlike my former doctor who rushed his patients so that he could see more of them each day and pay for the new office he built.

If a large chunk of people end up with their CPAPs as closet decorations, then I don't blame the DMEs for giving people the lowest price machine possible. It is our responsibility to make sure we're getting the equipment we need or want.
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#10
(02-03-2013, 05:44 AM)iSnooze Wrote: I'd like to point out that the goal of any business is to make money. It makes sense that the DME would want to make the biggest profit possible.

Absolutely and very good point, iSnooze.

The DME has every right to try and maximize their profits - that's what made our country great. Profit and free enterprise is good. I hope folks understand that my rants against DMEs who lie to customers does not mean that I support restricting the freedom of a business to charge whatever the want for a product.

The flip side of free enterprise is, we patients (as customers of the DME) need not accept the falsehoods that sometimes proceed from the mouth of our DME. And, we need to have a caveat emptor attitude to make sure that we minimize our costs, just as DMEs are trying to maximize their profits.

It's a two-way street, in other words. That's kind of why Apnea Board exists - to empower sleep apnea patients to "even up the score" a bit by giving folks information and knowledge about how the system works. Coffee

SuperSleeper
Apnea Board Administrator
www.ApneaBoard.com


INFORMATION ON APNEA BOARD FORUMS OR ON APNEABOARD.COM SHOULD NOT BE CONSIDERED AS MEDICAL ADVICE. ALWAYS SEEK THE ADVICE OF A PHYSICIAN BEFORE SEEKING TREATMENT FOR MEDICAL CONDITIONS, INCLUDING SLEEP APNEA. INFORMATION POSTED ON THE APNEA BOARD WEB SITE AND FORUMS ARE PERSONAL OPINION ONLY AND NOT NECESSARILY A STATEMENT OF FACT.



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