Tuesday, June 25, 2024

Re: Reimbursement vs cost

Wil Haines

Hello colleagues and guests,

This reminds me of a situation that I had several years ago. Since the
prosthesis (in that case 20 years old but functioning fine), no longer
worked (dead battery) and the patient could not find a practice that
would provide services (a new battery being reimbursed at below cost), a
new prescription was written and a new (higher voltage to boot)
prosthesis was provided. Duh?! What was the insurance company thinking?
The snardy agents on the other end of the phone finally got what was
deserved for such narrow minded thinking. Their answer to me at the time
was that it was my problem, not theirs. Really? 🙂

I am not certain, but I have heard that it is against federal
regulations for a federal contractor to lose money (low bid a job) on a
contract. In fact, I have heard that contractors have to use union
scales when submitting a bid for road contracts. I don’t know if this is
factual, but it makes sense. If contractors were allowed to low bid
projects, there is a chance that the project will never be finished
should the contractor go bankrupt and then the cost of the job would be
significantly higher. Anyway, this might be a good topic to take up with
the feds. Is a provider- reasonable-profit required for federal
contracts? If so, what is the mechanism for same?

I couldn’t agree more with Rick’s last paragraph. But for starters, it
seems that CMS ought to be held accountable for side-stepping federal
regulations (an ACT of Congress) without appropriate authority. Or, if
authority was granted, who made the decision, on what date, and by whose
authority did they make such decision?

Wil Haines, CPO

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On 9/14/2016 4:44 PM, Rick Stapleton wrote:
> Good afternoon List-serve,
>
> I wonder how Medicare can set a price on a specific L-code and reimburse us less than the cost of the component? The question at hand is how can we as a profession bring to light this conundrum and not allow the government or any Insurance company to expect us to take a loss on any product we provide. As you all know, there are certain components that we have to have for manufacturer’s “specific systems” and can’t use anyone elses product. When I replace “those components” I am reimbursed (in this case Medicare) less than what it cost me, how is this fair or appropriate? If it truly costs the manufacturers (with a small? profit) that much to produce, then how did Medicare come up with that fee schedule? Is there another, cheaper source that I can buy batteries that are specifically designed for one manufacturer’s prosthesis that I don’t know about? Is that how Medicare based their fees on a cheaper product by a supplier that I know nothing about? I do know that I can become a non-participating facility, accept assignment on all or any claim I choose and charge the patient (informing the patient ahead of time about not accepting assignment) what I feel is an appropriate fee (although Medicare caps my non-participating charges at 115% over Medicare’s fee (of course Medicare knocks off 5% for being non-participating right off the top.)
>
> I am going to lose $##.## on each myoelectric Lithium-ion battery I replace on a patient’s prosthesis. His prosthesis is almost three years old, is used every day and fitting very well, no problems, just needs batteries because they no longer hold a charge. Not only are they (Medicare) not reimbursing me the cost, but the fact that I have to see the patient, document the need, have the patient get a prescription, get physician notes, and then make sure the product works as designed, and I can’t even get covered for the cost of the component let alone my PROFESSIONAL time and experience! That doesn’t even include the rest of my staff: Scheduler, receptionist, biller, and the cost of having a clean, comfortable office/exam rooms. Since Medicare sets the pricing standard that all insurance companies use, that sets us up to lose even more if those companies demand discounts to Medicare’s price.
>
> Somewhere there needs to be dialogue between the manufacturers, the professionals using the products, and Medicare to allow for a reasonable pricing structure to reimburse us (Medical Professionals) at a reasonable level. Their needs to be a formula we can all agree on to allow for REASONABLE pricing/profit to keep businesses going in a very challenging environment and a mechanism for us to be able to address this issue (not just non-participating not accepting assignment option.)
>
> Thanks for reading my rant.
>
> Best regards,
>
> Rick Stapleton, CPO
>
> NOTE: The information in this email and any attachments may be confidential and/or medical privileged. Access to this email by anyone other than the intended addressee is unauthorized. If you are not the intended recipient (or the employee or agent responsible for delivering this information to the intended recipient), please notify the sender by reply email and immediately delete this email and any copies from your computer and/or electronic storage system. The sender does not authorize the use, distribution, disclosure or reproduction of this email (or any part of its contents) by anyone other than the intended recipient(s). No representation is made that this email and any attachments are free of viruses. Virus scanning is recommended and is the responsibility of the recipient.
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