Hi there!
I'm not going to name my employer, but I work for an orthopaedic based DME company that bills out for many items dispensed within all different forms of clinics. I wanted to write a post more so just to vent, but I'd love for this information to gain traction.
I would like to air my grievances with the DME billing system because I get flooded with angry patient on a regular basis. I also see the system as big part of the problem we are currently seeing with outrageous healthcare spending and waste.
DME is billed out based on coding called "HCPCS" codes. Each specific code has what is called an "allowable". An allowable is the maximum amount an item (based on HCPCS coding) can be billed out for, and allowables are set by the federal government (Medicare). So what would any profit driven clinic, or DME provider do to make sure they are compensated in a way that drives profits? You bill every single item dispensed at the allowable price. The problem is, a majority of these allowables are egregiously high.
- A standard immobilizing wrist brace (HCPCS code: L3908) has a bill price/allowable of $70.94. That doesn't sound too significant, but considering it retails for $25 online, it does seem ridiculous.
- If we were to add a thumb immobilizing attachment to the wrist brace, that HCPCS code changes to L3809. This now allows a wrist brace with a thumb spica to bill at an allowable of $198.00!!! I can find it retailing anywhere from $15-$50 online.
- A plantar fasciitis night splint, HCPCS: L4397, with very basic plastic components, padding, and velcro, bills out at $193.66.
- A compressive lumbar brace with an anterior panel to limit flexion, HCPCS: L0642, bills for $475.32. You can find a modern 60" television which includes a lot more materials and technology to produce for cheaper than this. This specific back brace is actually a more basic version, so more comprehensive back bracing bills out well over $1000.
- You know the post operative range of motion controlling knee braces that most ACL repair/reconstructed patients use? HCPCS: L1833. Yea those bill out at $735.65.
There is a lot more product specific pricing information I could list off, but more information is needed to complete the story.
Insurance companies have contracts with DME billers to lower prices from the allowables set by Medicare. So while a wrist brace with a thumb spica may bill out at $198, my company, or the orthopaedic clinic (whoever does the billing) may have a contract with the insurer to only pay $150 for the item. This almost acts like a group rate that is negotiated between the two organizations. These vary widely depending who the insurer is. Patients who do not have insurance, have no negotiating power to reduce the bill price, but are offered a 40% discount if they pay for the item up front, so that wrist brace with a thumb spica would be $118.80 instead of $198.00. The discounted price is still pretty high though considering this is essentially just velcro, small metal stays in order to immobilize, and fabric.
Insurance companies deny our billing claims very frequently. We use the prescription information provided by the physician, or PA to submit for reimbursement. Specific criteria has to be met for a billing claim to be reimbursed. The criteria varies depending on the product dispensed and the insurer, but it is all based (once again) on Medicare criteria guidelines. If a provider does not give you a diagnosis code that meets reimbursement criteria, you may end up stuck with the bill. Not always will the DME supplier pass the bill along to the patient, but sometimes it does not (This area is not clear to me since I don't actually work in the billing department). DME suppliers end up eating the costs of a lot items they bill out for due to improper criteria. These prescribing providers are loosely aware of the coding criteria, but some are not even aware at all. There is an entire criteria system based on various body parts being treated which is even more complicated, but all body parts require proper diagnosis coding. Many providers are extremely apathetic to proper coding since they see many patients a day.
Even if everything is billed correctly, many patients are still responsible for the price of the item. Most insurers will apply the price of the item to your deductible until that is met. Then they will apply it to the coinsurance rate until the out of pocket max is met. So if you are not a regular healthcare consumer and you came in with plantar fasciitis, you may be given a night splint. If billed out properly, you may be responsible for the entire price of the contracted rate your insurance company has negotiated because your policy wants to apply the item received to your deductible. Now, since you are not a regular healthcare consumer, you'd rather pay a $20 for a night splint online, instead of the $145 contracted rate that is being applied to your deductible.
This is when the patient calls me (DME supplier) extremely pissed off.
I always take my time and provide all the applicable information to patients, but I'm not actually the one who applies all the bracing to patients. Medical assistants do most of the work dispensing our products, who we have trained, but will never be able to understand the full scope of DME billing. A vast majority of the time, a patient has no idea how much their insurance company is being billed for an item, and that they may be responsible for that price.
WHAT CAN I DO WITH THE INFORMATION I HAVE AS A DME SUPPLIER TO MAKE THIS MORE TRANSPARENT, OR EVEN SHOW THAT THIS PROCESS IS BROKEN TO PEOPLE WHO NEED TO HEAR THIS?
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