Don’t Pay that UpCharge!!!

Suppose you decide that you want the top of the line, bells and whistles APAP machine like a ResMed S9 Autoset or a Philips Respironics System One Auto.  Your DME may not be very happy, because profit margin is lowest on these two more expensive machines.

After you get through the litany of “Your insurance company won’t cover this machine” (Yes, it will, because your insurer doesn’t care which E0601 (HCPC’s code) machine you get), and “you need a prescription that specifies this machine” (no, you really don’t, but it’s a good idea to get a specific prescription anyway because then, BY LAW, the DME has to “dispense as written”), or “we don’t carry it” (so ORDER it if you want MY business!), then you may be told by your DME that you can have the machine of your dreams, but only if you pay an “upcharge” which can be several hundred dollars in some instances.  This upcharge is in addition to the co-pays and deductibles you owe under your insurance plan. 

The practice of charging you over and above the amount your insurer has agreed is an allowable charge for the equipment is known as “balance billing” and it’s ILLEGAL under Medicare and in 47 states if you don’t have Medicare.  See http://healthinsurance.about.com/od/claims/a/balance_billing.htm.  In addition to being illegal, most DME providers promise insurers they not to bill more than the allowable amount when they contract with each insurer, and doing so is a breach of their contract with the insurer—and may constitute fraud. 

If your DME is requesting or demanding an “upcharge” in order to provide the equipment you request, you need to do the following:

      1.  Contact your insurance company and ask if the DME is permitted to do that and if so, under what circumstances.

       2.  Research “balance billing” in your state (Google it, i.e. “Balance Billing” “California”) to learn if it’s illegal if you didn’t get a clear answer from your insurer.

      3.  Call or write (writing is preferred—it gets their attention) your DME and tell them, politely but firmly, that you understand that their balance billing practice is illegal and not permitted by your insurer and if they continue to insist on the upcharge you will file a grievance with your insurer and the appropriate state regulatory agency.  Invite them to contact you to work out a reasonable solution if they want to do business with you now and in the future (they may not, but that’s probably no great loss to you!).  

Never hesitate to report your DME to the appropriate state agency for this practice.  If they did it to you, they are doing it to others who may not realize that the practice is illegal and fraudulent, and these upcharges can add up to a lot of ill gotten gain for the DME.  DME’s sometimes complain that their reimbursement from insurers is not adequate, but remember that it’s THEIR problem, not yours.  If they are unhappy with your insurer’s reimbursement, they can decide not to do business with your insurer, or work with the insurer to negotiate a higher amount.  What they cannot do is charge you out of pocket for their circumstance. 

Remember, balance billing rules may not apply if your insurer requires you to use only an “in network” provider and the DME you are working with is not an “in network” provider (in which case you are paying it all out of pocket anyway, and you should be considering an online supplier).  HMO’s often require you to use only an in network provider if they are going to pay anything.   In addition, an HMO may act as it’s own DME provider  and they may have different coverage rates for different machines within the same HCPC’s code. 

This is what Kaiser does, for example.  Kaiser is the DME provider, they contract with a national DME company to supply the equipment.  Because Kaiser is its own DME, it does not reimburse by HCPC’s codes.  Auto machines cost more than straight CPAP machines, and members have to pay a percentage of that cost (my 20% share was about $30 more for an APAP). 

And remember, it is NEVER permitted for a DME to practice balance billing if you are on “traditional” Medicare (Parts A, B, and D).

Responses

  1. You referred to being able to look up the Medicare payment for the E0601 HCPCs code. Could you give me some leads for tracing the 2011/12 amounts? I’m fairly good at searching, but this is a doozy. I live in Hawaii.

    Thanks so much.
    Greg Schultz

    • It is very hard to find these payment schedules. Here’s the link to the Local Coverage Determinations http://www.cms.gov/medicare-coverage-database. Agree to the terms, and then download the chart. You have to find E0601 and your state (Hawaii is off at the right hand side) to see what the monthly Medicare fee for an E0601 rental is. Medicare will pay 80% of that allowable fee every month for the 13 month rental period.

      I never updated in July, but as of January 2011 the Medicare Allowable monthly rental fee in Hawaii was $102.80 and it shouldn’t be too different than that. NOTE: The chart says for Hawaill (Non-continental areas not subject to floor and ceiling”). I think that means that the 48 contiguous states have a “floor” (in January it was $85.85 in states like Arkansas), and the “ceiling” in states like California was $101. Hawaii, Alaska, and Puerto Rico can charge higher than the ceiling, but the rate is still set by Medicare (hence, $102.80 is higher than the “ceiling” for the 48 contiguous states).

      We used to live on the Big Island, and that’s part of the “price you pay to live in paradise”–right? Which island do you live on?

      Note, that if you are on Medicare, upcharging (balance billing) is illegal. Sometimes a freindly reminder to the DME that you understand this (“It’s my understanding that Medicare doesn’t allow balance billing, should I double check that with the Medicare Fraud unit?”) helps.

      Note that if you have Kaiser, the rules may be very different in that Kaiser has a limited formulary of equipment,. As long as you are getting the machine that Kaiser ordered for you from a Kaiser approved DME, the DME cannot charge you extra, and if you’re on Kaiser Medicare Advantage they may not charge more than the Medicare allowable. But if you want a machine that was not ordered for you by Kaiser (e.g. Kaiser may order the PR S1 plus, but you want an APAP) you may have to pay more. I’m not on Medicare, and my local Kaiser IS my DME (they use Apria as a supplier only). I had to pay a slightly higher amount for my 20% share of the APAP vs. a CPAP. But it was only a $30 difference.

      If you have Kaiser, watch out for bait and switches. I’ve seen at least one Kaiser patient who lived on Maui. She was supposed to get an APAP (on the Kaiser formulary), the DME gave her a PRS1 Plus (no data, no auto), and she would have been none the wiser if she hadn’t gone on cpap.talk and tried to access her data. I think the DME on Maui thought they could get away with that because they did not expect her to schlep her machine to the sleep clinic on Oahu for a data check.

      If you want to go off Kaiser’s formulary (i.e. a different brand or a data capable machine) you have to pay ENTIRELY out of pocket and the DME can charge whatever they want. In that case, I highly recommend an online supplier–you can find help on how to tweak your settings on CPAPtalk.com–you don’t need the DME to do it for you (be sure you get a data capable machine!).

      If you do have Kaiser and you’re unhappy with the coverage for sleep equipment, remember you have less than 1 month to change plans in open enrollment period.

      Don’t forget you can always call Medicare (1-800-MEDICARE) and ask about this stuff.

      • Jan, I feel like an idiot…..I can’t find the E601 chart you refer to above….what am i doing wrong?

  2. The chart is NOT easy to find or understand. If you’ve downloaded the PDF file and opened the spreadsheet, you will see a list of codes on the left hand side of the chart, starting with the A’s. You can either scroll down or search for the E’s. the “0” is the number “0”, not the letter “O”, if that helps at all.

    If you are in the correct chart, another way to find E0601 is to hit “control F” on your keyboard (the control key and the letter “F”) and then enter E0601. Press enter and it SHOULD take you to the entry.

    • the chart was fine once I found it!! I copied a link to the page it is on….
      I also have the excel file downloaded that can be attached…

      thanks for your help!

  3. Finally found it!!!

    http://www.cms.gov/DMEPOSFeeSched/LSDMEPOSFEE/itemdetail.asp?filterType=none&filterByDID=0&sortByDID=3&sortOrder=descending&itemID=CMS1241981&intNumPerPage=10

    File Name
    DME11_A

    Description
    Revised for the January 2011. The update includes all changes identified in CR7248.

    Year
    2011

  4. Hi I know this reply is very late considering when you wrote your post but I was looking at getting Kaiser Health Insurance and when I called the sales person couldn’t tell me if they covered Sleep Apnea equipment under the DME supplies. After reading your post it sounds like they do. Do you know what the cost would be with the 20% co-insurance for a CPAP or APAP machine? It also sounds like they use Apria.. does that mean I go to Apria to pay or is it all included in my Kaiser insurance? Any help/advice would be great. (Not looking at medicare plan, just the family plans)

    • Annie, if the documentation you’ve received says that Durable Medical Equipment and supplies are covered with a 20% co-pay, then CPAP and supplies should be covered. They make deals with the supplier so the 20% is pretty low, overall. My CPAP is now 2 1/2 years old, so I can’t say what today’s charges are, but I only paid $130 co-pay which covered the machine and humidifier, humidifier chamber, mask, hose and filters. Pretty reasonable. And it was an outright purchase, not a capped rental.

      You should be able to request a copy of the book called the “Evidence of Coverage” for the particular plan you are considering. This is the actual contract between you and Kaiser, and it is binding on them to follow what’s in that book. So if the EOC says that CPAP equipment and supplies are covered, then they MUST cover them. I’m not positive you can obtain this book before you sign up, but I would think so–you have a right to see what you’re buying in your plan from Kaiser.

      BUT, be aware that you will have NO choice in machines or DME. Kaiser is your DME for all intents and purposes, and they contract with SUPPLIERS like Apria. Usually each region has ONE DME contract and a formulary of masks and machines. Kaiser will give you NO choice in machines, and there’s no way to get anything different if Kaiser is paying. Kaiser does NOT pay by HCPCs code, they specify the make and model you are to receive. Not all masks are available on their formulary, but they have a pretty broad formulary.

      I don’t know if Apria is the supplier for your region, you’ll have to ask. I believe they cover all of California Kaisers.

  5. Im still in the learning mode but let me see if I have this correct. I spoke with Aetna and had them look up E0601 asking the rep if there was a dollar amount to the machine. She didn’t say it was a limit but just that they pay $468, $46.80 for 10 months. A rental I would assume. I then called my local DME and they say they will give me whatever machine my doctor specifies. So, is it safe to say if my doc writes me a RX for a ResMed S9 auto set with heated humidifier and Dispense as Written, that I will receive that machine and the DME will only get the $468 contractual amount from Aetna?
    Thanks

    • BINGO! You’ve got it, Tony!

      Be sure you understand the following:

      1. Do you have an additional co-pay on top of the $46.80 per month? Be sure to count that in to how much the DME will also receive. (Also, be aware if you have a deductible that you will hit that deductible in January and have to pay the FULL monthly rental ($46.80 PLUS your co-pay) until your deductible is met).
      2. $468 is for the BLOWER UNIT only. The humidifier portion is a separate one time only purchase, so the DME will get whatever portion of the blower (plus tank) Aetna pays plus any co-pay you owe. Hoses, filters, and mask are also separate purchases, and don’t count in that $468.

  6. They didn’t mention a copay. They said I’m covered 100% as medically necessary. I don’t pay any deductibles but I pay a good premium. They get 137 for the humidifier, 39.39 for the heated tubing and 69.20 for the nasal mask. Not that I really care but how does the DME make any money if they’re only getting around 800 for an S9 autoset setup ? Anyway I get my home test equipment on Friday because Aetna will no longer pay for in lab sleep study unless I have one foot in the grave but my wife counted 107 episodes in an hour. Hopefully everything goes smooth and hopefully I’ll have an S9 to sleep with by next week. Wish me luck and thanks again.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: