May 24, 2010

 

A letter to the Editor of the Commercial Appeal dated May 23, 2010 said the writer had received a bill in error which showed charges of $252 for an item which is readily available for $40.   The bill should have gone to the insurance company. 

 

Conversely, VistaCare just told a potential customer we could not provide the requested ostomy products because the acquisition costs were more than the insurance company’s  reimbursement not including the additional and non-reimbursable cost for delivery.

 

The writer of the letter had a good point but the writer probably also failed to take into consideration costs of doing business like the delivery charges, business license, insurances, various taxes, state license, payroll, benefits and training, accreditation expense, accounts receivables days outstanding, bad debt and some margin to pay salaries and to keep the lights on.   Further, when home delivery is involved and in particular for items involving oxygen, a different set of stringent parameters are to be considered such as in-home assessments, client education and 24/7 call.

 

Medical equipment companies like VistaCare are at a cross roads. Can you buy products and then bill according to set fee schedules and survive.   Fee schedules continue to decrease. Costs continue to rise. 

 

Many items allow a margin, many more do not. What sense does it make to take the Medicare (CMS) fee schedule and simply reduce every item by 50% or more?  Is making a fee schedule so ‘aggressive’ a de-facto way of not making supplies available?

 

The difficult message to communicate to consumers is that home medical equipment companies that participate in health plans are not streamlined, on-line warehouses or big box stores.   Most of us are accredited and are small businesses of less than 10 employees functioning under regulations established long ago.

 

Was $252 too much for the one item, possibly? When viewed in the bigger picture, home delivered equipment and supply items are cost effective.