[Equipment] Insurance Benefits

[JJJ]

[quote='iSnooze' pid='28610' dateline='1359888297']
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.

Ethics would be nice. But probably not going to happen.

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.

It seems to me that the root of the problem is that insurance pays the same price for a brick as for an APAP. If insurance paid cost plus a percentage for profit, DMEs would have an incentive to give us the higher priced machines over the cheaper ones. If the code was broken up into different codes for different machines, the problem would resolve itself pretty quickly.

Now, how to effect such a change is difficult, but not impossible. An advantage is that in the U.S. a lot (most?) private insurance companies just follow the codes and practices set by Medicare. And Medicare is a government program, so we need to complain to our congresscritters. It would take a lot of complaining, but that is the only way we can bring enough pressure to bear on the problem.

[SuperSleeper]

It seems to me that the root of the problem is that insurance pays the same price for a brick as for an APAP. If insurance paid cost plus a percentage for profit, DMEs would have an incentive to give us the higher priced machines over the cheaper ones.

BINGO! Ding, ding, ding... we have a winner. Excellent point, JJJ. With our current system, DMEs are incentivized to give us the worst possible machine for the least cost. Something needs to be changed in order to give the patient the best possible machine for the least cost.



I don't like a massive amount of government involvement into the medical field, but the fact remains that they are already massively involved in it. So, if they insist upon being heavily involved in the DME marketplace, it would be in our best interest if CMS would simply not allow reimbursement for any machine except a fully data-capable Auto-CPAP for patients who require CPAP. That way, it can be used in any mode - CPAP or APAP, and can provide valuable data for patients and doctors alike, giving doctors, RTs and patients greater flexibility of treatment options, and in many cases, eliminating the need for additional overnight sleep lab titrations when something changes with the patient. That type of action should eventually reduce health care costs across the board.

[Sleepster]

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).

But in my case I was told I'd have to pay the extra $200 if I wanted the more expensive machine.

Now, I will check into this some more with my insurance company, but assuming the DME is not in violation of state law they're doing what they're allowed to do.

They may even be allowed to charge more than $200 increasing their profit even more by selling the more expensive data-capable machine!

Now I have no doubt that for some people the situation is different. They can get the more expensive machine at the same price, which cuts into the DME's profits. But it's not universally true.

[SuperSleeper]

But in my case I was told I'd have to pay the extra $200 if I wanted the more expensive machine.

1. Who is telling you this Sleepster? The insurance company or the DME?

2. Also, more importantly, I had forgotten that you use a bi-level (BiPAP) machine. Are you attempting to get a new bi-level or Auto-BiPAP machine?

3. If you're asking for a bi-level, which make and model are you trying to get? If it's a high-end bi-level or Auto-BiPAP, that's a completely different animal that has the E0470 code. In the examples above, I was talking about the standard CPAP machines (basic constant pressure bricks, data-capable constant-pressure machines and Auto-CPAPs - all of which have the same billing code of E0601).... the $1500 cost limit applies to these standard machines, but it is not applicable to bi-levels.

If you were trying to get basic CPAP, the DME is lying if they say they can only dispense a low-end brick without you paying extra. If it's a bi-level, I don't know what the CMS limits are for those - and indeed if you're asking for a high-cost machine that sells for greater than the guideline limit established by CMS for bi-levels, then yes, they will then ask you to make up the difference.

So, for standard CPAP users in the U.S., it should be universally true that with insurance or Medicare, patients can get a data-capable Auto-CPAP without paying extra.

But, for bi-level machine users, this does not hold true in all cases, since it's a completely different billing code.

Here's the billing codes for various types of devices:

E0601 Continuous airway pressure (CPAP/APAP) device

E0470 Respiratory assist device, bi-level pressure (BiPAP) capability, WITHOUT backup rate feature, used with noninvasive interface, e.g., nasal or facial mask (intermittent assist device with continuous positive airway pressure device)

E0471 Respiratory assist device, bi-level pressure (BiPAP) capability, WITH backup rate feature, used with noninvasive interface, e.g., nasal or facial mask (intermittent assist device with continuous positive airway pressure device)

E0472 Respiratory assist device, bi-level pressure (BiPAP) capability, WITH backup rate feature, used with invasive interface, e.g., tracheostomy tube (intermittent assist device with continuous positive airway pressure device)

In the above examples I gave, I was only referring to the E0601 devices (CPAPs and APAPs, but not BiPAPs).

[Sleepster]

But in my case I was told I'd have to pay the extra $200 if I wanted the more expensive machine.

1. Who is telling you this Sleepster? The insurance company or the DME?

2. Also, more importantly, I had forgotten that you use a bi-level (BiPAP) machine. Are you attempting to get a new bi-level or Auto-BiPAP machine?

This was what the DME told me when I got my first CPAP. The amount wasn't exactly $200. I was just following your example.

The point is this. If the insurance company only allows a specific amount for a specific type of machine the patient has to pay for anything over and above that.

I will check with my insurance company and make sure that what the DME did is allowed by their policies and procedures.

Here's the information from my DME invoice:

For my original Remstar Pro with mask, hose and filters the coinsurance amount was $290. The upgrade fee was $100.

My original point was, and still is, that the DME does not necessarily make a greater profit in all cases by sticking the patient with a brick. In this case I could've had a brick for $100 less, but maybe the DME makes a profit on the upgrade fee, too, so it's not necessarily in their best interests to provide the patient with a brick.

I remember the conversation I had on the phone with the DME. I had taken the day off from work to see the doctor because I was desperate to get a machine. He issued a stat order to the DME who called me that same afternoon. He had a Remstar Pro in his vehicle and told me that if I wanted a less expensive machine (the brick) I'd have to wait until the next day. I was glad to pay the extra $100 to get the better machine.

Two weeks later I had to upgrade to the BiPap because I had aerophagia. The coinsurance amount was $260.

Maybe he was telling me lies, but this is the paperwork that was filed with the insurance company, so I don't see how that's possible. This is a large DME that services the greater Houston area and my insurance is the uniform group insurance for the state of Texas. Neither of these are little fly-by-night outfits! Like I said, I'll check with the insurance company and see if I can find out some more about it.

[SuperSleeper]

Sleepster, just so you understand, I'm not doubting what you're saying, I'm simply saying that what you are being told may not be "the whole truth and nothing but the truth"...

This was what the DME told me when I got my first CPAP.

It does not surprise me at all that the DME told you this. They lie (or misinform) all the time. Just because a kind and helpful DME representative tells you something does not mean it is the truth. Many local DME companies have established policies and procedures that are designed to extract as much money from patients as possible using all means available to them. This does not mean that their front-line sales staff is always dishonest - rather, they are giving you a line of baloney that was given to them by their employer. They may actually believe the lies they were fed by their manager.... this is why you need to be talking to a DME manager, not to a low-level staff member.

The point is this. If the insurance company only allows a specific amount for a specific type of machine the patient has to pay for anything over and above that.

No they don't. All U.S. insurance companies must follow CMS guidelines and use the same billing code for CPAP/APAP. Those guidelines have standard CPAP reimbursement to the DME set at $1500 (this applies to REMstar Plus, REMstar Pro or REMstar Autos equally). So, your DME received $1500 from the insurance company, guaranteed, for whichever of the 3 machines was dispensed to you.

DME policies and/or insurance company policies have nothing to do with that payment amount. They cannot overrule CMS guidelines and oversight. Neither do they make the decision on what type of CPAP machine you receive - that is really up to you, ultimately, as insurance will pay $1500 towards the cost of a either a REMstar Plus, Pro or Auto (or S9 Escape, Elite or AutoSet in the ResMed world). Insurance pays out the exact same amount for each of those 6 machines.

Here's what I think is happening: The DME is free to "con" you into paying additional amounts beyond the $1500 they receive from insurance and/or Medicare. They do this quite often, actually. There is no law to prevent that, as far as I know. But again, you don't have to be victim of the "con". If you ask your insurance company for a complete and final accounting (in writing) of all payments made to your DME on your behalf, (and they actually agree to give it to you), you will see that they have already paid the DME $1500 for your REMstar Pro, which is much higher than the retail cost of the machine.

The insurance company isn't going to intervene on your behalf if they learn that the DME tricked you into paying additional fees, because they have no interest nor legal responsibility to protect you when a DME attempts to squeeze more money from you. It's simply not their role, nor is it their responsibility. It is your responsibility as the customer and end-user of the machine. You have more power than you think.

I will check with my insurance company and make sure that what the DME did is allowed by their policies and procedures.

Again, insurance company policies cannot override CMS rules and regs. They gave your DME $1500 according to the CMS guidelines, and when the DME gave you a REMstar Pro, they made more profit than if they had given you a REMstar Auto.

Here's the information from my DME invoice:

For my original Remstar Pro with mask, hose and filters the coinsurance amount was $290. The upgrade fee was $100.

That's fine. Heck, a DME has the right to ask you to pay an additional $100,000 if they want to. It doesn't mean that you have to pay it.

My original point was, and still is, that the DME does not necessarily make a greater profit in all cases by sticking the patient with a brick.

I see what you're saying, but I still contend that when they are being paid via insurance and/or Medicare, they do make greater profits by giving out "dumb bricks" if we are talking about simple CPAP or APAP.

Maybe he was telling me lies, but this is the paperwork that was filed with the insurance company, so I don't see how that's possible. This is a large DME that services the greater Houston area and my insurance is the uniform group insurance for the state of Texas. Neither of these are little fly-by-night outfits! Like I said, I'll check with the insurance company and see if I can find out some more about it.

The insurance company and/or Medicare could not care less about "upgrade fees" that a DME has charged you. They have no duty nor interest in protecting you from unwarranted DME fees, as long as it's not them paying the fees. They only care that they have complied with CMS regs by paying out no more than the standard $1500 to the DME-- nothing more, nothing less. The insurance company is not an advocate for the patient, nor are they required to be one.

Going to the insurance company to address this issue is sort of like going to the local McDonald's restaurant manager to complain that your neighbor Joe (who works as a cashier at the McDonalds) has a dog that keeps peeing on your manicured lawn: the McDonald's manager might sympathize with you... heck, they may even talk to Joe about it, but the manager's primarily role and interest is selling hamburgers, and he doesn't really care that your neighbor's dog has ruined your lawn. If you don't like your neighbor's dog peeing on your lawn, you need to talk to your neighbor about that, not a disinterested third party. And trust me, when it comes to DMEs screwing over patients, Medicare and the insurance companies are completely disinterested third parties, although they do hire "pleasant" and "likeable" customer service reps who try to convince you otherwise.

I could be totally wrong on this, but based upon what I've heard from actual DMEs and a large number of frustrated patients, I don't think I am wrong about how the system works

Anyone else: please feel free to add your additional experiences and knowledge on these issues.

[Sleepster]

I looked up the Explanation of Benefits (EOB) generated by my insurance company. The amount paid by my insurance company to the DME was $1,963.23. This is the sum of a list of about 10 items that included, I guess, things like the humidifier, hose, and mask. The highest-priced item on the list is $1,507.94.

The insurance company also states that my responsibility is $392.60.

The amount the DME told me I had to pay them was $390.

Now, maybe they lied to me and I would have had to pay the same $390 if I had gotten a brick. But they told me I would have had to pay only $290 if I had gotten the brick, so I can't see how that would have worked!

This is the same procedure we go through with the insurance company regardless of whether the provider is a DME, a doctor, or a hospital. The insurance company sets the amounts paid by both themselves and by the patients to the providers. The providers must agree to these amounts in order to be included in the insurance company's list of approved providers.

I plan on calling my insurance company and asking them about what my DME calls "upgrade fees for items not covered by my insurance company". I'm sure that if I elect to receive a product or service from a provider that is not covered by my insurance company then the provider is allowed to charge an extra fee.

I will find out if the upgrade fee is somehow limited by the insurance company, and if the DME lied to me about their right to charge a $100 upgrade fee for a Remstar Pro. I don't see though how my insurance company could allow me the Remstar Pro for a lower price than what they listed on their EOB! That just seems crazy.

[SuperSleeper]

Sleepster, I think that $290 you had to pay is likely the co-pay most folks have to pay with any health insurance plan.

The co-pay really has nothing to do with this discussion, as far as I can tell. You would have had to pay that no matter what machine was given to you.

The fact remains that under CMS guidelines, as I suspected, your insurance company seems to have paid the DME roughly $1500 for your CPAP machine (that's likely the $1,507.94 charge you're seeing on your EOB). That's the point here. They would have paid roughly that same amount to the DME regardless of whether you got a brick or a data-capable machine (or APAP for that matter). So the DME is incentivized to give you a lower cost brick to minimize their costs (and maximize profits).

The extra $100 so-called "upgrade fee", on the other hand, seems to me as one of those standard "DME tricks" designed to squeeze more money out you. It's perfectly legal and the insurance company has no problem with the DME charging you that extra fee. But you can find other DMEs that don't charge such "upgrade fees". I would ask the DME manager why you were charged that extra fee, when the $1,507.94 they were paid (via insurance and your co-pay) could easily pay for 2 complete REMstar Pro machines at normal retail prices. They will likely say "it's company policy" or "that's simply our set pricing scheme" or some such nonsense.

Yeah, they have a right to charge whatever they want for their machines, but you have a right to go to a more reasonable DME. And there are plenty of DMEs (not just online) who would be more than willing to accept that $1,507.94 as complete payment for a brand new REMstar Pro machine. Heck, I know for a fact that we have several members who had to pay no additional "upgrade fees" to get a REMstar Pro with humidifier. If you were to have called around to other local DMEs, I'd be willing to bet that they would loved to have had you as a customer and would not have minded giving you the REMstar Pro package with no tacked-on "upgrade fee" at all.

Why is it that your DME asked you to pay this? Answer: because they can and it gives them an extra $100 in their pockets when the unsuspecting average "Joe CPAP-User" agrees to pay it. We have members here who were told the exact same "upgrade fee" thing, but when the patient pushed the DME by threatening to go elsewhere, the DME "magically gave in" and agreed to "waive the fee". Surprise, surprise.

The insurance company also states that my responsibility is $392.60.

That's simply because that was your portion of the amount the DME's billing department sent to the insurance company. Roughly, it included your co-pay ($290) plus the DME's so-called "upgrade fee" ($100). Perfectly legal, makes sense. The insurance company is simply giving you the billing information that was sent to them by the DME and showing you what your portion of the cost is with that particular DME. Everyone pays their co-pay, of course, but that $100 fee is highly suspect, and honestly, if you were to have shopped around, I suspect you could have found a DME that did not charge a "upgrade fee".

But again, all this is meaningless to my main point: (that point being that the insurance company reimbursed your DME for roughly $1500 and would have done so regardless of which of the 3 REMstars were given to you - giving the DME a direct financial incentive to dispense a lower-cost brick to you if they can get you to accept a brick).

In your case, you didn't want to accept a brick. Realizing that giving you a more expensive data-capable machine would eat in into their profits, the DME went to their "Plan B", whereby they tell you "there's going to be a $100 'upgrade fee' if you want to upgrade, Mr. Sleepster".

It's late, but I'm hoping that I'm making sense here.

[Sleepster]

Sleepster, I think that $290 you had to pay is likely the co-pay most folks have to pay with any health insurance plan.

The co-pay really has nothing to do with this discussion, as far as I can tell. You would have had to pay that no matter what machine was given to you.

That $290 included the $100 upgrade fee.

Edit: If I'd have gotten the brick (the Remstar Plus) then my co-pay would be only $190. Assuming all my information is valid.

But again, all this is meaningless to my main point: (that point being that the insurance company reimbursed your DME for roughly $1500 and would have done so regardless of which of the 3 REMstars were given to you - giving the DME a direct financial incentive to dispense a lower-cost brick to you if they can get you to accept a brick).

If my co-pay is $190 with the brick then where does the incentive come from?

[TheWerkz]

I looked up the Explanation of Benefits (EOB) generated by my insurance company. The amount paid by my insurance company to the DME was $1,963.23.

Sleepster,

Are you saying the total price paid by both your insurance ($1,963.23) AND your out-of-pocket portion ($392.60) for a REMstar Pro including the mask, hose, humidifier and filters etc cost $1,963.23 + $392.60 = $2355.83 ???

I'm going to start my own DME!