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Supplies Scam ?
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GeoffD Offline

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Post: #11
RE: Supplies Scam ?
(02-21-2015 03:07 PM)DVScott Wrote:  Perhaps "scam" is too strong. I'm suspicious of caregivers supplying based on Medicare guidelines ever since a physical therapist charged me $800 for a wrist brace I can buy at Walgreen's for $20 because "That's what Medicare will pay".

I've also observed that emergency rooms stuff Medicare patients through their idle cash cow CT scan machine because they know they'll get paid. The aberrations in the Medicare fee schedule invite this kind of behavior. The problem with health care in the US is that it's not cost/outcome-based. The medical system is biased towards things that produce the most profit for the providers for a comparable outcome rather than what is most cost-effective to produce a comparable outcome. At some point, that has to change as part of health care reform but it's what we're stuck with today.

I think the Medicare replacement schedule is somewhat excessive. I want a spare hose. I want a spare mask. I want a spare humidifier tank. I only need to replace filters every 90 days because I don't have dust/mold/pollen/animal issues. The nasal pillow and elastic headgear replacement rate is fine. I can really notice the difference between new nasal pillows and 30 day old nasal pillows.
02-23-2015 08:19 AM
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Post: #12
RE: Supplies Scam ?
I get a card every three months from my DME as a reminder that it is time for my quarterly "refills". I usually send them an email and tell them what I need and don't need (or want). I do take a mask every time it is offered and keep the new one as a spare (somehow I got ahead by one). Filters are a no brainer as you can always use them (especially living in the desert). Last time around I told them to skip the tank as my tank (and the 2 spares I have) were all fine.

BTW, I am not on Medicare, but do have TriCAre which plays by a lot of the same rules (other than the DME lockin in some areas)

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02-23-2015 04:06 PM
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accurate Offline

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Post: #13
RE: Supplies Scam ?
(02-23-2015 08:19 AM)GeoffD Wrote:  
(02-21-2015 03:07 PM)DVScott Wrote:  Perhaps "scam" is too strong. I'm suspicious of caregivers supplying based on Medicare guidelines ever since a physical therapist charged me $800 for a wrist brace I can buy at Walgreen's for $20 because "That's what Medicare will pay".

I think the Medicare replacement schedule is somewhat excessive. I want a spare hose. I want a spare mask. I want a spare humidifier tank. I only need to replace filters every 90 days because I don't have dust/mold/pollen/animal issues. The nasal pillow and elastic headgear replacement rate is fine. I can really notice the difference between new nasal pillows and 30 day old nasal pillows.

This is such a difficult and convoluted problem and is not readily explainable by any one facet of our (US) healthcare system. I could write pages on this but here's a reader's digest of my impressions.

On the one hand you have competitive bidding. In 2009 Medicare decided that there were going to be companies that won contracts through the bidding process. If a DME company didn't did bid low enough they lost the Medicare reimbursement business. It didn't matter if they had been serving patients in a certain area for decades, they were out.

Now one might say that that's good. Bidding ultimately lowers cost to the government and discourages unreasonable profit. However, what happen was companies started bidding low ball bids even if they couldn't service the area they were bidding for. If they won an out of state bid, then they would then hire (contract) a local DME in the area the out of state DME had won to take care of patients and pay to the local DME a much lower payment then what the local DME would have gotten had they won the bid.

So you have a situation where the patient needs services, but because of the bidding program the local DME can't supply those services, in the manner they used to, at a price point that allows them to stay in business. That's why you see local DME business trying to retail more product (canes, walkers, smocks, etc.) in an effort to boost bottom line.

Another consequence of the bidding program was that a local DME would underbid the contract in order to garner more patients. Then, because having all those patients made them an attractive acquisition for a larger company, sell their business. If you look around your neighborhood I bet you'll notice that most of the DME companies are no longer local mom and pop operations but larger companies i.e. Lincare, Apria, bigger regional players, etc.

Aggravating this problem is the fact that not all localities are attractive to the big players due to population, regulation, or other concerns. So the small DME is constrained by the bidding process which if they win cuts their profitability and if they don't they have to create revenue streams to make up for the lose of patients. The system then becomes an impetus for the small player to look for ways to maximize their profits in any way they can.

In the mean time, the big boys are servicing many more patients and driving their efficiencies to service more patients with less resources. This impacts patient services and at times clinical outcomes. As they won't staff their operation adequately to handle the exponential increase in patient load, patients suffer that consequence. Reading virtually any health forum testifies to this.

Is it right that a DME will charge Medicare 800 dollars for a twenty dollar brace? No it is not. But that DME is operating in an arena where they either find profitability where they can or run the risk of going under. It's got to be a tough decision for a person that is up to their eyeballs in debt trying to survive in this environment.

To bring it to a personal view, our company has seen a huge decrease in the count of different companies with which we do business. We haven't seen a decrease in the equipment we repair, just the number of companies providing machines for repair. In other words the DME industry is rapidly contracting.

I know I haven't explained this completely and perhaps not even coherently. I won't pretend I have any answers or for that matter fully understand the problem here. But watching this industry for nearly 15 years this is just the surface of the changes that I have seen and the reasons I believe they have come about.
02-24-2015 07:14 PM
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Post: #14
RE: Supplies Scam ?
Thanks Ian. Good post and appreciate the insights. I can't imagine the changes over the last 5-10 years, but I do know we weren't happy with the major players 10 years ago. Today, they are almost all we have left. The lack of competitiveness in brick and mortar local providers, together with their horrible service, has lead to a rise in online providers that simply sell products without a hassle. They may be out of network, but with today's high deductibles and copays they end up less expensive, and a lot less hassle.

I have wondered if the ridiculous inconvenience of working with a DME has been an intentional move on the part of insurers to motivate patients to simply self-insure for DME. The idea someone would have equipment rental spanning two deductible periods before ownership, compliance monitoring, repeated testing, and higher costs to use the mostly unwanted services and barriers to equipment, seems intentional.

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02-24-2015 07:52 PM
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accurate Offline

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Post: #15
RE: Supplies Scam ?
(02-24-2015 07:52 PM)Sleeprider Wrote:  Thanks Ian. Good post and appreciate the insights. I can't imagine the changes over the last 5-10 years, but I do know we weren't happy with the major players 10 years ago. Today, they are almost all we have left. The lack of competitiveness in brick and mortar local providers, together with their horrible service, has lead to a rise in online providers that simply sell products without a hassle. They may be out of network, but with today's high deductibles and copays they end up less expensive, and a lot less hassle.

I have wondered if the ridiculous inconvenience of working with a DME has been an intentional move on the part of insurers to motivate patients to simply self-insure for DME. The idea someone would have equipment rental spanning two deductible periods before ownership, compliance monitoring, repeated testing, and higher costs to use the mostly unwanted services and barriers to equipment, seems intentional.

I absolutely think you are not far off with that. While the DME is billing Medicare for the services you describe, Medicare is denying payment for claims if the DME doesn't literally dot an i or cross a t. There are DME companies that are getting nearly half of their claims either denied or audited. The auditing process can take months before approval for payment is authorized. Same if the claim is denied and the DME appeals. I defy any business to go without cash flow for an extended period of time and stay solvent. This particularly impacts the small DME player that doesn't have the resources to clear audits or argue appeals.

One scenario that I have heard discussed as to the future of DME is this:
A patient goes to the doctor. The doctor says you have this condition and you need this equipment. Here's a prescription, call this 800 number and they'll overnight you the equipment. Read the directions contained with that equipment and start your treatment.

It gets worse:
You're discharged from the hospital and need a hospital bed. Same drill. Call an 800 number give them the details. As you pull up to your house sitting on the porch is a hospital bed in a box. Have a nice day setting that bad boy up.

Will this happen, I don't know. It certainly sounds draconian. But I've heard it talked about by DME owners that I respect. I think Medicare and the health insurance industry is hedging as many bets as they can to stay solvent in the face of the aging boomers. I don't know that we can safely rule anything out.
02-24-2015 08:30 PM
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me50 Offline

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Post: #16
RE: Supplies Scam ?
(02-24-2015 07:14 PM)accurate Wrote:  
(02-23-2015 08:19 AM)GeoffD Wrote:  
(02-21-2015 03:07 PM)DVScott Wrote:  Perhaps "scam" is too strong. I'm suspicious of caregivers supplying based on Medicare guidelines ever since a physical therapist charged me $800 for a wrist brace I can buy at Walgreen's for $20 because "That's what Medicare will pay".

I think the Medicare replacement schedule is somewhat excessive. I want a spare hose. I want a spare mask. I want a spare humidifier tank. I only need to replace filters every 90 days because I don't have dust/mold/pollen/animal issues. The nasal pillow and elastic headgear replacement rate is fine. I can really notice the difference between new nasal pillows and 30 day old nasal pillows.

This is such a difficult and convoluted problem and is not readily explainable by any one facet of our (US) healthcare system. I could write pages on this but here's a reader's digest of my impressions.

On the one hand you have competitive bidding. In 2009 Medicare decided that there were going to be companies that won contracts through the bidding process. If a DME company didn't did bid low enough they lost the Medicare reimbursement business. It didn't matter if they had been serving patients in a certain area for decades, they were out.

Now one might say that that's good. Bidding ultimately lowers cost to the government and discourages unreasonable profit. However, what happen was companies started bidding low ball bids even if they couldn't service the area they were bidding for. If they won an out of state bid, then they would then hire (contract) a local DME in the area the out of state DME had won to take care of patients and pay to the local DME a much lower payment then what the local DME would have gotten had they won the bid.

So you have a situation where the patient needs services, but because of the bidding program the local DME can't supply those services, in the manner they used to, at a price point that allows them to stay in business. That's why you see local DME business trying to retail more product (canes, walkers, smocks, etc.) in an effort to boost bottom line.

Another consequence of the bidding program was that a local DME would underbid the contract in order to garner more patients. Then, because having all those patients made them an attractive acquisition for a larger company, sell their business. If you look around your neighborhood I bet you'll notice that most of the DME companies are no longer local mom and pop operations but larger companies i.e. Lincare, Apria, bigger regional players, etc.

Aggravating this problem is the fact that not all localities are attractive to the big players due to population, regulation, or other concerns. So the small DME is constrained by the bidding process which if they win cuts their profitability and if they don't they have to create revenue streams to make up for the lose of patients. The system then becomes an impetus for the small player to look for ways to maximize their profits in any way they can.

In the mean time, the big boys are servicing many more patients and driving their efficiencies to service more patients with less resources. This impacts patient services and at times clinical outcomes. As they won't staff their operation adequately to handle the exponential increase in patient load, patients suffer that consequence. Reading virtually any health forum testifies to this.

Is it right that a DME will charge Medicare 800 dollars for a twenty dollar brace? No it is not. But that DME is operating in an arena where they either find profitability where they can or run the risk of going under. It's got to be a tough decision for a person that is up to their eyeballs in debt trying to survive in this environment.

To bring it to a personal view, our company has seen a huge decrease in the count of different companies with which we do business. We haven't seen a decrease in the equipment we repair, just the number of companies providing machines for repair. In other words the DME industry is rapidly contracting.

I know I haven't explained this completely and perhaps not even coherently. I won't pretend I have any answers or for that matter fully understand the problem here. But watching this industry for nearly 15 years this is just the surface of the changes that I have seen and the reasons I believe they have come about.

I agree with some of what you say. However, the competitive bid didn't go into effect until last year if I am not mistaken. I know that Apria was a terrible DME even before they won the competitive bid. I also know I hope to never need oxygen because the company that won that bid is also a horrible DME. One thing that I have to say is that it doesn't matter what a company bills medicare or any medicare advantage plan or any insurance company. There is a contracted price that they agreed to so they can bill any insurance company/medicare that price but they will only get paid the contracted price less the patient's copay. I hope I didn't misunderstand what you were saying.

One thing I do have to say is that really, competitive bid did not help medicare because all they had to do was what they were doing before and that is to have a contracted price with the DME and then all the DME's could have remained servicing their clients as before but would have to accept the contracted price set my medicare and if they didn't like it, then it was them that made that decision and caused them to lose their clients. A lot of doctors don't take medicare, at least not around where we live. And, the competitive bid has actually hurt the clients/patients more than anyone. DME's have merged with other DME's that did win a part of the bid (say oxygen or some other service but lost their bid with cpap machines and supplies) so they were able to continue servicing patients in 2 areas. That is what happened to my prior DME that I was getting my supplies from who did win the bid for oxygen but they lost the bid for cpap to Apria so they merged with another DME that also lost their bid for cpap but won in another area (I don't know what) I have heard people go out of network as you said because it is less expensive for them.
(This post was last modified: 02-24-2015 09:39 PM by me50.)
02-24-2015 09:33 PM
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