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The Insurance-DME secret


Posted by CherylB on February02, 2000 at 18:00:07:

I've learned a lot the last couple of days about how this insurance-DME stuff works. First, insurance companies DO NOT pay for CPAP equipment based on brand/model of machine. They use a special code (CPT) to determine what is covered and how much their "Maximum Allowable Amount" for the items with that code. The DME bills insurance for your machine (AutoAdjust or plain CPAP, any model) using the generic CPT code. BiPAP has a different CPT code. There is also a generic CPT code for nasal mask, nasal pillows, headgear, humidifier. The CPT code doesn't even distinguish between hot or cold humidifier. What the DME knows is what the insurance company's Maximum Allowable Charge is for those CPT codes. The DME then charges you just a bit more than the Maximum for your machine knowing that what your 20% is going to be. The code does not differentiate between a Sullivan V, Sullivan V PLUS, or Sullivan V Elite OR a heated or passover humidifier so the DME will submit the same charge to insurance regardless of what you get. So they will try to use the cheapest machine to maximize their profit margin. When they say "Insurance won't pay for that" what they mean is "That cuts into our profit margin so we won't do it." I agree that the DME provides a service with training, adjustments, loaners, repairs and they obviously need to pay the salary of the people that do the training, do the insurance billing and paperwork in addition to office rent, utilities, etc. So you will expect to pay for that in the price of your machine. But a very savvy and informed patient should be able to negotiate the machine that best meets personal needs and still allow reasonable profit margin. Unfortunately, most patients will be provided the most basic model instead of a higher model because they will receive from insurance company the same amount for either.

One of the internet CPAP retailers has this little note on his webpage:

"NOTICE! The series of letters and numbers preceding the product names are not product numbers. These codes are CPT codes that are used when you file with your insurance company. Example: (K0183NU)" If you happen to visit that website, you will see that EVERY CPAP and AutoCPAP machine (price range $499-$1300) has the same CPT code. If you buy them direct from internet, the insurance company will only reimburse 80% of purchase price or maximum allowable, whichever is smallest. (My insurance only pays 65% after an additional $600 out-of-network deductible). But they will gladly pay the DME "Retail Price" up to Maximum Allowable. So NO DME I know will bill insurance for less than that MAX because then insurance covers it at the lower price and they lose profit they could have had by charging a bit more. (This is a bit simplistic explanation. All the DME has to do is justify what they are charging based on their operating costs + cost of equipment/supplies).

So the CPT codes for ALL brands and models are:

CPAP or AutoCPAP E0601 (Any make, any model)
BiPAP E0452 (Any make or Model)
Any Mask K0183 (FF, nasal, gold seal, mirage...)
Any Nasal Pillows K0184
Any Headgear K0185
Any Chin Strap K0186
Humidifier K0268 (Heated or passover...same code)
Air Tubing K0187
Filters (any) K0188

I got my equipment today. They charged me $1800 for a Sullivan V (they have an Elite on order for me), Sullivan passover humidifier, and Mirage Mask and my 20% was $360 and tried to convince me that I was getting a big "discount". I have 30 days to exchange any component that doesn't workout. After that it's mine! So I'm going to use the passover and then tell them in a couple of weeks that I can't use it and ask to exchange it for Sullivan Humidaire. (Before all you flood me with advise to get the F&P, I'll tell you that I travel quite a bit and the F&P doesn't travel well!) I convinced them that the bottom of the line Sullivan didn't compensate for altitude and with my travels, that would be a problem. So instead of teaching me how to recalibrate the pressure on machine, they agreed to get an Elite (top of the line Sullivan V) so it would automatically adjust for altitude. About every two years, insurance will cover the purchase of a new machine if the one you have "doesn't work anymore".

I called my insurance claims administrator (BC/BS) 5 times and nobody was willing to tell me what their maximum allowable was for DME equipment. After much insisting and providing them with the CPT codes for the equipment, they gave me the numbers. This will open your eyes!!! For CPT code E0601, they will pay up to Maximum of $2400. I'll be very interested to see whether the DME submits the $1800 they charged me on paper or $2400. I'll let you know when I get the insurance paid claim back.

NOTE: This information DOES NOT apply if you belong to HMO or managed care plan.



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