Medicare Savings vs. the Lobbyists
This is a poorly researched, inaccurate portrayal of the impact competitive bidding will have on the healthcare industry. I know because this is what Princess Crabby does to make a living when she is not off gallivanting with Sailors.
The whole article is nonsense, but one passage in particular steamed me.
"According to federal officials, Medicare currently pays $1,825 for a hospital bed that can be bought online for $754, and $4,023 for a power wheelchair that can be bought online for $2,174."
It's wrong. It's incomplete. It's misleading. It's why people get all spooled up about things needlessly. The NYT is getting Americans all hot and bothered over something that simply isn't true.
My comment -
"According to federal officials, Medicare currently pays $1,825 for a hospital bed that can be bought online for $754."
This is really poor reporting. You throw out an inflammatory comment like the one I have copied above with no context. Further, it contains incorrect information. In no case does Medicare pay $1825.00. While Medicare allows $1,474.83, they in fact pay 80% which is $1,179.86. That's right, $1,179.86, a far cry from $1825.00.
OK - You so you go online and you buy a hospital bed for $754.
How much to ship it? The bed I supply weighs 150 lbs.
How long are you willing to wait? Most people need beds within 24 - 48 hours to facilitate a discharge from a facility.
How much to set it up in the patient's home? Can you picture your elderly relative in another state receiving the two boxes containing eight pieces and assembling the bed?
How is your bed being paid for? I'm sure your Internet company will want their money up front. Medicare asks suppliers to deliver the bed, gather documentation, submit claims and accept 13 monthly payments. In return they will pay 80% of the allowable and suppliers have the right to chase secondary insurances for the other 20%. Or if a patient has no secondary and you've been in their house to observe the absolute poverty they live in.....you waive the 20% copay when they tell you that they simply have no money to pay you with.
Who stands behind your bed? I stand behind mine. When your nephew wants you near the window and pushes your bed away from the wall dislodging the power cord, I am the one who you call to troubleshoot it over the phone. Or what if you have a real problem? You spilled liquid on the hand controller on a Friday night and without power you won't be able to get out of the bed or elevate your head. I will send a certified delivery technician out after hours to replace your controller.
In return for my 13 monthly payments totaling $1,179.86, Medicare expects me to stand behind my bed for five years. If I'm lucky, I collect the other 20% from a secondary insurance or the patient. However, Medicare doesn't care; I am still expected to take care of the bed for five years whether or not I get paid in full.
In order to qualify for the privilege of collecting at least $1,179.86, possibly $1,474.83 I must be a Medicare provider. I have to maintain a physical location (not just on the Internet or the trunk of my car), payroll, insurance, training costs, vehicle costs. Then there are the credentialing processes. We are JHACO certified.....is you Internet company? Nope.
Now let's get to what happens after you get paid. Two years later I find out that in the 5th month you were in a rehab facility for three days which happen to encompass your monthly bill date. You were home the other twenty seven days of the month using the equipment. However, because you were in a facility for the anniversary date of the delivery……Medicare takes the entire month back. I call you, but your phone is disconnected, you have moved permanently to a facility and your daughter sold your bed on EBay or Craig’s List. I am completely out of luck with no chance to recoup my loss.
So, in conclusion………….home medical equipment suppliers provide valuable services for which they make reasonable profits. If we go forward with competitive bidding, small local companies will go away, big companies will buy and supply cheaper products. The remaining companies will be forced to cut back on services. Competitive bidding will result in shoddy products and shoddy services and patients spending more time in facilities at a greater cost to Medicare.
To specifically respond to the incorrect figures for the hospital bed, here are a few facts.
Medicare sets fee schedules for items even when they are not covered. I believe the NYT is using the fee schedule amount for an E0265 - a fully electric bed. It's hard to tell though because they are not following through on the formula for pricing. You see Medicare pays one amount for monthly rental for the first three months. Then the fee drops to 75% of the allowable. For example, the fee schedule for an E0265 is listed as $199.88. However, you do not multiply that by thirteen months for the sale price. You must multiply it by three to gets the beginning months and then drop it by 25% to get the allowable for the following ten months.
So a fully electric hospital bed would pay $1,677.55 (3 X $199.88 plus, 10 X $149.91 added together, less 20% copayment). OK, so you've got $1,677.55 for a fully electric hospital bed, an E0265. Here's the problem...........Medicare doesn't cover E0265. Sure they'll put it in the criteria. Sure they'll put it on the fee schedule. But according to their own website;
"A total electric hospital bed (E0265, E0266, E0296, and E0297) is not covered; the height adjustment feature is a convenience feature. Total electric beds will be paid as the least costly medically appropriate alternative for the comparable semi-electric bed (E0260, E0261, E0294, and E0295)."
So now you are down to and E0260 (if the patient qualifies, if not, it's an E0294 and those allowables are even less. In my comment I used the figures for an E0260, semi-electric hospital bed.
You can go here and see all the fee schedules for any item.