Posted by: Jan | April 9, 2011



A recent poster on posted the charges on her bill from the DME for her new CPAP set up.  I hope she doesn’t mind, but I’m going to post what her DME charged for things:

$331 – One month rental of PR Systerm One Pro machine (supposedly will only go up to price of machine?)
$835 – PR System One humidifier
$980 – Mirage Quattro FF mask  [with headgear, over $1000 for a Quattro!!!!!!!!!!!!!!!!!!]
$164 – Headgear
$125 – Tubing
$33 – Filter

Total was $2469.34


And of course, it’s terrifying when you get a bill like this–if you don’t understand your Medicare coverage, this could give you a heart attack!

NOTE:  The following applies to “Traditional” Medicare—that is Medicare Parts A and B, NOT Medicare C (also known as Medicare Advantage—often HMO Medicare).  The rules are slightly different for Medicare Advantage users, but not THAT different!

First thing to understand is that the DME’s bill is a work of pure fiction.  There’s a reason DME’s do this—Medicare determines it’s allowable fees for DME equipment based in part on the difference between the DME charges and the actual reimbursement received.  Obviously, this DME was trying to jack up that difference to maximize the reimbursement rates when Medicare sets the schedule.  Hopefully, Medicare is smarter than that (I wouldn’t be on it, though, it’s all a numbers game). 

But seriously, this is a lot like the MSRP sticker on a new car.  No insurance company will pay that price, just as nobody walking into a new car dealer should pay the sticker price.  And to me, it says I can trust that DME about as much as I can trust a car salesman—not much. 

Pity the poor uninsured sucker who walks into a DME and doesn’t know all this.  Let’s bow our heads and have a moment of silence for that poor shlub. . . . . . . . .  . .  . .

OK, now on to Medicare.  Medicare sets the allowable fee for each CPAP item.  Those rates vary by state and are published if you know where to look on the Medicare/CMS website.  Here is the site.   From that page, you can download a state by state chart in Excel or PDF format and look up exactly what Medicare’s allowable fee is for each item.  This schedule is updated every January and July, so be sure to check for the current schedule. 

 In order to interpret that chart, you need to know the HCPC’s codes (billing codes) for various items.  Here’s the secret code:

E0601 Continuous airway pressure (CPAP) device (e.g. smart CPAP, auto CPAP, CPAP)
E0561 Humidifier, used with CPAP device
E0562 Heated humidifier, used with CPAP device
A7033 Nasal pillows/seals, replacement for nasal application device, pair
A7034 Nasal interface (mask or cannula type) used with positive airway pressure device, with or without head strap
A7035 Headgear, used with CPAP device
A7036 Chin strap, used with CPAP device
A7037 Tubing, used with CPAP device
A7038 Disposable filter used with CPAP device
A7039 Non-disposable filter used with CPAP device
A7044 Oral interface used with positive airway pressure device
A7046 Humidifier chamber – replacement
E0470 Bilevel
E0471 Bilevel with backup rate
E1399 Miscellaneous durable medical equipment items

 Here, for example, is the Medicare allowable in my state for each item in the poster’s bill:

$331 – One month rental of machine.  Medicare allows $95.16 per month.

$835 – humidifier.  Medicare allows $72.55 for the humidifier plus $17.64 for the tank
$980 –  Mask (Nasal interface) Medicare allows $106.35 (note:  on the Medicare fee schedule that is with or without headgear, but they charged separately for the headgear!) 
$164 – Headgear.  Medicare allows $35.93
$125 – Tubing.  Medicare allows $37.08
$33 – Filter.  Medicare allows $13.86

Medicare will pay 80% of the allowable fee, and you and/or your supplemental insurance (Medi-gap) pay the rest.  THE DME IS PROHIBITED BY LAW FROM CHARGING YOU MORE THAN THE MEDICARE ALLOWABLE FEE!!!!  So if you want a bells and whistles fancy APAP that is coded as an E0601 machine, the DME cannot charge you more than the amount Medicare allows (see “Don’t pay that upcharge).

It’s important to understand that Medicare purchases all of your CPAP supplies EXCEPT for the machine itself.  The humidifier, even though it’s integral to the machine, is also a purchase.  But the machine is a “capped rental”.  That means that Medicare and you will pay the allowable rental fee on the machine for 13 months (roughly), and then the machine is yours.  So be prepared for a monthly bill for 20% of the allowable fee unless your supplemental insurance covers that portion 100%.  Be aware that you will run into next year’s deductible and have to pay that, too, unless your supplemental insurance covers that. 

Medicare has a generous replacement schedule for CPAP supplies:

Nasal pillows/seals, replacement for nasal application device, pair 2 per 1 month
Nasal interface (mask or cannula type) used with positive airway pressure device, with or without head strap 1 per 3 months
Headgear, used with CPAP device 1 per 6 months
Chin strap, used with CPAP device 1 per 6 months
Tubing, used with CPAP device 1 per 3 months
Disposable filter used with CPAP device 2 per 1 month
Non-disposable filter used with CPAP device 1 per 6 months
Humidifier chamber – replacement 1 per 6 months

 Some DME’s like to put you on  a regular replacement schedule for CPAP supplies, and it can be helpful at first.  I recommend that in the beginning you stock up on supplies, so that if something suddenly goes wrong you will have a ready replacement.  But after a while, you will have plenty of supplies (except for filters which I replace regularly), and you won’t need to get automatic shipments—it may be tricky to get the DME to stop sending you everything and stop billing for it.  The only thing I would like to get regularly at this point is the filters.  If you use nasal pillows, regular replacement for those on the Medicare schedule is also a good idea. 

Other DME’s refuse to provide you with a simple cushion or nasal pillows on the Medicare schedule, because it’s a lot of work and time to bill Medicare.  You need to decide if you want to keep doing business with that DME if that’s the case—sometimes it’s just not worth the hassle when the DME across town or online WILL provide you with what you need.   

When you open your DME’s bill, don’t be frightened.  Remember that the DME can put any amount down they want (i.e. $1000 for a Quattro–HA!), but all they will get is what Medicare allows.



  1. Sounds like that customer got screwed. I work for a DME and we deal with CPAP, none of our equipment retails at that rate nor do we increase our costs that high. Not all DME’s are compareable to a car salesman!!

    • It sounds like you work for a good DME, Aimee, but too many DME’s bill this way–we see it all the time. Most people are fortunate enough to have insurance so they will never pay anywhere near this amount. But receiving a bill like this in the mail is very frightening.

      Not all DME’s are comparable to a car salesman, I agree, but too many are, and unsuspecting people without insurance can be taken advantage of if the they don’t know that they can negotiate the price OR vote with their feet by taking business elsewhere.

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