Is Medical Equipment too Expensive?

I have seen many posts lately on Face Book and in Blogs about the high prices for DME and Medical Equipment. I have seen comparisons to Sport Aid and other online pricing compared to the brick and mortar companies. 

As a tax payer, and after taking an Ethic course and discussing the outside perception of the costs of Medical Equipment; I understand the concerns.  It is hard to fathom that a powered wheelchair may cost as much as a car, that an ultra light weight wheelchair may cost $3000. 

That being said, have you seen how much a refrigerator, furniture or a racing bicycle may cost?  I have a friend that has a bicycle that costs $5K.  I understand that the racing bicycle may be considered a luxury and where a wheelchair is not; but there are a lot more bicycles sold yearly than the same custom wheelchairs. Bicycles do not have the same requirements and liabilities as do wheelchairs.

As a Complex Rehab,  DME supplier and Board Member of NRRTS, I see the other side of the equation.  Generally Medical Equipment is funded through Insurance and all insurance companies follow Medicare guidelines. Unlike the Sport Aid type companies, we are forced to comply with all Federal, State, Local, Accreditation, and Insurance guidelines.  Unlike Sport Aid, we have to follow the clinical model and have to provide a report that builds a case for medical necessity, we have to chase all the paperwork, submit the request to funding, help with any appeals, order, assemble, deliver, fit and then submit the claim for billing; which can take up to one year to be reimbursed. 

Retail companies, advertise their products, take a deposit or the entire amount up front, and ship the equipment to the customer.  There is little cost and risk in this process. Catalog and On-line companies can be anywhere, allowing them to reduce costs, they do not have to have the insurance coverage, they do not need to be accredited, inspected, or follow the same standards as Insurance providers.

There are costs associated with playing the game. In retail, it is all about price and value. When providing equipment through insurance, you have to have a location that is certified, inspected, accredited, bonded and insured. The costs above the rent, staff, trucks, equipment, parts; etc. is the Professional and Liability Insurance ($10-$20K / year), Accreditation ($3-$5,000/year), Medicare and Medicaid Licensing ($1K/year), Bonding ($1K/year). There are regular audits by the insurance carriers, which cost much time, and expense in fulfilling the requirements and ensuring payment for services.

DME companies offer and provide knowledge, education, and their experience to improve the quality and successful outcomes. I am the first to agree that there are not enough safe guards in the DME world, which is why NRRTS is aggressively promoting trying to carve out Complex Rehab Equipment from DME.

There are studies that have been conducted, showing that in Complex Rehab that the net profit for most DME's are under 7% which is very low in comparing to other industries. This offers very little room for growth, pay increases to staff, or any additional benefits to workers. 

Competitive Bidding was introduced, reducing payments for many DME products. After the first year 33% of the winning providers went out of business as they could not afford to stay in business.
It is important to remember, that DME companies purchase the equipment they are providing, and help with all the insurance paperwork and do not receive any compensation until the equipment is delivered.  All of the labor costs from the intake, evaluation, quoting, requesting medical documentation, submission for approval, ordering, assembly, and ensuring there is a service staff to help with concerns is all funded through the sale of the product.  It is a semi-flawed system, however if insurance companies paid a lower rates, and considered labor hours for the entire process; the price of the equipment would be higher than it is now.

This article was written by Carey Britton, Seating Specialist for Active Mobility Center. He can be reached at 954-946-5793 or at cbritton@wheelchairguys.com.