While prescribing a sleep study, sleep doctor writes for a titration study. This study involves testing the patient with a CPAP mask for determining the exact pressure required for keeping the patient’s airways open.
Based on the comfort level of the patient, most sleep labs either do the titration study on the same day (split study) or the next day in the sleep lab. Once the study has been completed, and the sleep tech has determined the pressure setting, and CPAP machine, the prescription is sent over to the DME (CPAP supplier).
What is DME?
DME essentially stands for Durable Medical Equipment but is also used for describing the equipment (CPAP masks and machines), supplier (a company providing CPAP machine) as well as a person (either owner or staff working in the DME).
In an ideal world, DME (company) receives a prescription from the sleep lab, helps the patient to find the most appropriate machine and mask, educates them about these items and finally sells this equipment. DMEs should know about the patient’s insurance (most of the time, the patients go to the empaneled DMEs) and also have RT’s (Respiratory Therapists) who aid the patients in having a good CPAP experience which is essential for a successful CPAP therapy.
However, in the real world, many DME’s do not work in the above manner. On the other hand, few DME suppliers have a caring and knowledgeable staff who ensure that the patient has the best experience while selecting CPAP machine as well as ensuring that they are well looked after, even after the purchase has been completed. Unfortunately, these suppliers are an exception.
Type of Insurance Coverage - A Primary Factor
The first step undertaken by the patient while selecting a DME is determining the type of insurance coverage that they have. If the patient has an insurance coverage that does not cover CPAP machine and supplies or does not have any insurance coverage, they can get their machine and supplies online (prescription is mandatory). The devices offered online are comparatively cheaper than offline DME providers, and the suppliers are highly reputable.
If the person is covered under Medicare, then he has to know whether the coverage is under Medicare Part A and B and whether he has Medigap/supplemental policy (traditional plan) or is he covered under Medicare Advantage (Part C). The points that are being discussed here pertains to traditional Medicare plans with supplemental policy and not Medicare Advantage. There are significant differences between these, and one would have to go over the Medicare Advantage plan in detail for knowing the type DME coverage offered.
Some of the guidelines followed by Medicare are mentioned below:
- Traditional Medicare plans pay only 80% of total cost of CPAP/APAP machine and supplies. However, there are few technical aspects that have to be considered:
- Medicare determines the cost of CPAP/APAP machine and pays 80% of that determined price, irrespective of the price charged by the DME. For example, if the DME sells a machine at $3500 (a top end version), Medicare is not obliged to consider the price as a reasonable price. Medicare might determine that $2000 is the reasonable price for the machine offered by the DME and would only pay $1600 (80% of $2000) for the machine.
- HCPCS codes determine payments made by Medicare. These codes are primarily billing codes (e0601 is the code for CPAP machine.)
- Any APAP/CPAP machine (not ASV or BiPAP machine) is billed under the e0601 code. It can be anything from a simple machine without data capability to a top-end EPR machine with all advanced functions. Medicare pays only one price irrespective of the machine which a person can get under the e0601 code. So, most DME’s tend to offer the cheapest machine since it would help them get maximum profits as compared to a top-end machine.
Click here for Medicare 2018 handbook, DME coverage, and Medicare approved DME
- The person’s co-pay is the balance 20%. Typically, the person’s Medigap/supplemental policy might pay either part or full of the balance 20%, with some supplement policies willing to pay a higher amount if a preferred partner is selected for purchase.
- Though Medicare provides payment for the CPAP supplies, it does not “buy” the CPAP machine. Machines purchased under Medicare coverage are bought by “capped rental,” a concept which implies that the machine is rented out by Medicare for 13 months. Once the rental period is complete, the person becomes the owner of the machine.
- Under Medicare plans, DME is required to provide compliance data to Medicare to prove that the person is using the machine for at least minimum prescribed the time within a 30-day period. For this reason, DME’s ask their customers to provide the data card within the first 90 days. If the person does not meet compliance norms, then the DME does not get any payment from Medicare. To comply with this regulation, every single machine available in the market has the capability of recording compliance data.
So, if a person is asking a “data-capable” machine from his DME, then he has to make sure that the machine has the capability of recording both “efficacy” and compliance data. In other words, the person should insist on the machines having the capability of recording leak data and Apnea-Hypopnea Index (AHI) scores besides the compliance data.
- Though CPAP machines are highly inexpensive on the internet, Medicare does not pay for it, unless it is a Medicare Certified supplier (which is very rare). The main reason for Medicare not paying online supplies is the need for fulfilling various requirements such as patient instruction, and compliance documentation which only brick and mortar DME can provide. Also, Medicare does not have a valid method for regulating a majority of online suppliers.
- If a person is unsure about whether his Medicare and supplemental policy coverage would include CPAP machine and supplies, he can get assistance from the State Health Insurance Program (SHIP in most states) or Health Insurance Counseling and Advocacy Program (HICAP in California). These agencies can be contacted either by logging onto the Medicare website or calling 1-800-MEDICARE or through numbers provided in the Medicare and You handbook (2018).
A majority of the private insurance plans follow guidelines adopted by Medicare, but there are infinite variations. If a person does not come under Medicare coverage, he has to check out with the insurer and seek an answer to the following questions:
- Is the payment made by HCPCS codes and is the coverage limited to few machines? If yes, then is the amount higher for certain types of devices?
- Does the insurer provide coverage for only specific DME costs and whether the balance allowable cost of the insurer and the price paid by insurer or difference between DME’s price and the insurer’s value has to be borne by the user?
- Does insurer purchase the CPAP/APAP machine outright, or is there a rental period?
- What is the deductible and co-pay of the insured? This is very important because if the rental time rolls over to the next calendar year, then the insured person would have more out-of-pocket expenses with regards to annual deductibles and co-pays, and ultimately the person might end up spending more for the machine.
Moreover, if the insured person changes the insurers, then he can lose out on the credits for deductibles and co-pays already made or in worst case scenario, would have to get a new machine. The insured person should have a detailed knowledge about these things before signing on the agreement with the DME.
- Does the person’s insurance provide coverage for only specific masks or all types of masks offered by the DME and whether the coverage includes CPAP supplies (filters, hose, cushions, masks, nasal pillows, etc.) under HCPCS codes or is there a limited supplies “formulary?”
- Is there any particular panel of DME providers or would the insurer pay for the insured’s DME choice? Is there any added coverage benefit if the DME is from the empaneled list?
- Finally, what is the replacement schedule adopted by the insurer for CPAP supplies? A majority of the insurance companies follow the guidelines approved by Medicare, so knowing the plan would be beneficial.
Besides Medicare and private insurers, there are insurance plans from HMO which many sleep apnea patients opt for. Most often, the types of networks restrict the policies to certain kinds of machines, DME and have limited supply choices. Often, Medicare Advantage plans also work in this manner. Hence proper knowledge about the coverage is very vital. This is important to ensure that the DME does not end up shortchanging the person.
Some of the commonly encountered statements by DME while denying preferred machines are listed below: For example, the insured person wants a top-end CPAP machine with all advanced features, but the DME might say:
"The insurance provided by you does not cover the concerned machine"
The insurer pays for products based on the HCPCS codes and not based on company, and they are least bothered about the company as long as the product comes under the e0601 code.
"Prescription should specify the machine chosen by you"
NO, it does not need to. Any simple prescription written for CPAP machine is enough for acquiring the CPAP machine. To ensure that the person gets the best machine for him, one can get the doctor to mention the machine name and mention “Dispense As Written” on prescription. This would force the DME to offer the machine the sleep apnea patient wants.
"You have to cough up $XYZ dollars for a machine of your choice"
This is not true. However, for this to happen, the machine chosen by the person has to be covered under the e0601 code. Certain insurance contracts allow DME’s to charge above allowable fees. So the person has to check with the insurer before paying any extra fee.
"Your HMO does not cover the machine of your choice"
While this holds true for many HMOs, checking up with the insurer is a good step before blindly believing the DME.