Apnea Forum Posting

Posted by CherylB on February02, 2000 at 22:09:31:

In Reply to: Re: The Insurance-DME secret posted by Lisa O. on February02, 2000 at 19:25:08:

Yes, that's exactly how it should work. So both the patient and the insurance company benefits when DME providers are competitive. In other words, if there are several DME providers and one charges less than the other, our 20% co-pay would be less than with the steeper vendor as long as it was LESS THAN what the insurance company's maximum allowable is. But if the amount is MORE, the DME can still charge you for the excess unless there is a formal agreement between provider and insurance company that they will not "balance bill".

Say Insurance MAX allowable is $2000
and both DMEs offer the same exact equipment
DME #1---------------------DME #2
Total charges=$1800--------Total charge=$2400
My copay = $360------------My copay = $400
Insurance pays $1440-------Insurance pays $1600
---------------------------I pay DME $400 more
My out of pocket=$360------My out of pocket = $800
Insurance company saves $220 and I save $440 by being a cost conscious consumer.

Unfortunately, in some regions there is not much competition. Then DME doesn't have to worry about having a lower price to attract business. They know there aren't many choices and can charge whatever they want and WE pay for it. Yes, you could save more money by buying cheaper on the internet but you have to fork out the cash first and then wait for insurance to reimburse you and you have to file your own insurance papers. If insurance decides NOT to reimburse, you can kiss your money goodbye for a long time going through appeals.

I belong to PPO (preferred provider network). As long as I get my care from a provider that has contracted with insurance, my co-pay is 20% of max allowable AND the DME won't balance bill if the ins. 80% + my 20% falls short of what the DME actually charged. In other words, the DME has agreed by contract that they won't charge ME more than what the insurance co allows for services. The Benefit to the DME is that they bill Ins. for me and the Ins. mails the check to the DME instead of me. And I only have to fork out the copay instead paying 100% and waiting for reimbursement. (Most people don't know that your insurance company has a contractual obligation to pay the benefits DIRECTLY TO YOU UNLESS you ASSIGN the benefits to the provider in writing or you belong to a network with contract agrees between insurance and providers.

Where the rub comes in is if I receive service from an out-of-network provider (not a preferred meaning no contract exists between ins. co and provider). Then the ins. co pays 80% (or sometimes a lower percent) of their max allowable and if the total charge by the DME is MORE THAN the ins. allowable, then I have to pay NOT only my percent co-pay BUT any extra the DME charges in excess of the allowable. (BTW, And this is the same way regular MEDICARE works with a "participating provider".) Here's a comparison for you.

Ins. Max Allowable is $2000
Preferred Provider DME-----OUT OF NETWORK DME
Charges me $2400-----------Charges $1200
I pay $400 copay-----------I pay $1200 Cash
Ins. pays $1600------------I pay $600 deductible
DME writes off $400--------Ins. reimburses me $390
My Out of Pocket=$400------My out of Pocket=$810

So even though the cost of the equipment I bought out of network was HALF the cost of the preferred DME, I pay twice as much if I choose the lower priced. This clearly "protects" the local network DMEs from losing business to internet and deep discounters. It really pays for a DME to belong to the PPO. The insurance company justifies this arrangement because of the preferred DME charged more than allowable, I don't have to pay the difference.

Follow Ups:

Copyright ©1995-2005 Sleepnet.com., All rights reserved