[DMEPOS]

We are having a internal debate here at our company. We are newish in the HME world and see a problem with what a Consultant is telling us. We have a contract that states.

"charges explanation which shall show all services rendered to
Covered Person, itemized on the same basis and at the same prices as for all patients of Provider."

Our consultant is telling us we are permitted to inflate our U and C that we submit to the Third-party. In the Pharmacy industry this is not permitted, but we are being told it is standard practice in the HME World.

Thoughts?

[Sleeping410]

The easiest way to calculate U&C is as a multiple of the current Medicare Fee Schedule. Most use 1.25 to 1.75 the current fee schedule for all insurances. Understanding that the allowable for each insurance might be different, this is reflected as the billed amount. Hope that helps!

[DMEPOS]

Thank you

So my retail cash price really does not matter?

[Sleeping410]

I wouldn't let my retail cash price (On items that I sell to Medicare) fall below 20% less than Medicare allowable. There may be a lot of items in your store that you sell for cash that insurance doesn't come into play on. Set those however you like.

[DeeDee]

We have a U&C that is above Medicare's rate that we bill for all insurances including Medicare.

In our insurance settings, our software allows us to tell the system if we would like to book the AR at the billed rate or at a pre-determined allowable that has been loaded into the system by payer.

I was taught many years ago, that retail rates on Medicare allowed items had to be at or above the Medicare allowable unless you have a posted sale flier with specific covered dates that states for "cash sales only". I was told that if you regularly sell an item for cash at less than the Medicare allowable and Medicare becomes aware of this, they could reduce your allowable for that item to the standard "cash price" that you charge. The reasoning I was given is that you cannot bill the government more than you would charge the standard consumer. (Which I find funny considering how much our government pays contractors for simple items such as office supplies)..

[DMEisgoodfun]

You have to bill Medicare (and most payers per contract) your U&C. They will
pay the lesser amount between U&C and allowable. Don't bill different rates
for different payers-bill all your U&C. When your software books the
allowable to the AR, your system should still be billing U&C. The benefit is
that it's automatically adjusting contractual write-offs for you.

[Sleeping410]

DeeDee,

I agree that I was taught that as well many years ago. But, as we move to a time where more and more people don't have insurance some people are paying cash for the items that Medicare covers. Specifically, CPAP's and supplies. I have three different levels of CPAP and too many masks to mention. When someone pays cash, I sell some of the masks at (up to) 20% less than the stated Medicare allowable for those items. I do the same on the basic CPAP (without download capability). I ran that by our Health Care Attorney and was told that we couldn't go below that 20% number. What are the rest of you HME TALK MEMBERS doing? I'd be interested in hearing more about what everyone else in our industry is doing.

[DMEisgoodfun]

I went to a conference a couple months back and the attorney there said the
magic number is 17%. Do not discount Medicare covered items by more than 17%
to cash paying customers unless you can provide proof that the cost of
providing/billing that product to Medicare is that much more. Another
speaker said your Medicare covered products should always have retail price
on them instead of sale price. In lieu of sale prices, have a flag that says
"ask us about cash discounts."

[DME4EVR]

Can you please get me the name of that attorney and his contact information? I would love to have something in writing to support that. Our company is new to the industry. We do a lot of retail as well as DME. It would be great to have that supporting documentation to insure we are compliant with CMS rules.