Vol. 3, No. 4, July/August 1995	Previous Issues Subscribe to AT Messenger Download PDF Viewer
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FINANCING ASSISTIVE TECHNOLOGY: Medicare and Equipment Suppliers... The Subtleties

Ron Sibert, Funding Specialist

First, let's review the basics. A person qualifies for Medicare by being at least 65 years of age, permanently disabled, or by having end-stage renal (kidney) disease. There are two types of Medicare coverage: Parts A & B. Part A coverage is automatic for all Medicare beneficiaries and pays for hospitalization. Part B, on the other hand, requires a monthly premium and an annual deductible payment. It covers in-patient and outpatient physician services as well as home health care and my own personal favorite, assistive technology.

Medicare's term for assistive technology is durable medical equipment (DME), and Part B Medicare pays for purchase or rental of DME devices and for services such as maintenance and repair as well. However, Medicare only pays 80% of what it determines or assigns to be the "allowable cost" of the equipment. The out-of-pocket expense to the consumer depends on whether or not the supplier "takes assignment." Assignment means that the supplier agrees to accept the Medicare allowable as payment in full. If the supplier takes assignment and you have met the annual deductible, then you (or your copay insurance) are only responsible for 20% of the allowable charge. Note that Medicare pays the same amount (80% of the allowable cost) whether or not the supplier takes assignment. This is important to know. You could pay much more if the supplier does not accept assignment because the supplier is then free to charge much more for the device. Don't be confused though. Suppliers can and do bill Medicare without accepting assignment, and may then hold the beneficiary responsible for a huge balance. In order to minimize your costs, make sure your equipment supplier accepts assignment.

The ways that Medicare and equipment suppliers treat the 20% copayment is also worth discussing. Certain unscrupulous equipment suppliers have been known to drop the copayment or to give discounts, coupons, rebates, or other "special offers" that eliminate the need for the copayment as a purchase incentive to consumers. The most common strategy is to offer equipment "at no cost to you." Be aware that such practices are illegal. Suppliers are only permitted to waive the copayment in special hardship situations, and then only on a case-by-case basis with proper documentation of hardship from the consumer. Also note that the supplier must always bill for the copayment, even in hardship situations.

There are several other possible abuses of the Medicare system that could cost you money. Here is a short list that includes suggestions about how to address them. Suppose a supplier:

• Accepts assignment but charges more than 20% of the Medicare allowable charge-Whenever the supplier submits a bill to Medicare, the allowable and actual charges associated with that purchase are reflected on your Explanation of Medicare Benefits (EOMB). Multiply the allowable charge by .20 and compare the result to what the supplier has billed you or your supplemental insurance carrier. If the supplier's amount is larger and they claim to accept assignment, something's wrong.
• Provides lower cost equipment while billing Medicare for higher cost equipment-Compare the equipment description on the EOMB with the equipment you have received to be sure that you got what was actually prescribed.
• Provides used equipment while billing Medicare for new equipment-Check the equipment you receive for signs of wear or prior use. If there is a discrepancy, contact the supplier and notify your Medicare regional office.
• Refuses to submit a nonassigned claim to Medicare for payment-Notify Medicare. Suppliers are required by law to obtain the necessary paperwork from your doctor and submit DME claims on behalf of Part B Medicare beneficiaries for whom they provide equipment.
• Refuses to pick up rental items and continue to bill Medicare after you no longer need them-Notify Medicare.
• Misrepresents itself as an agent or representative of Medicare-Avoid the supplier. Medicare does not supply equipment, endorse or recommend specific suppliers, or provide beneficiaries' names to suppliers.

Of course, once you have located a reputable supplier, be sure that the supplier has adequate local resources for repair and maintenance of equipment, and is willing to provide "loaner" equipment if and when yours needs to be taken away for repairs.

Several portions of this article are a synopsis of information contained in a pamphlet entitled Consumer Fraud: Medicare & Home Medical Equipment released by the U.S. Department of Health and Human Services, in association with the American Association of Retired Persons (AARP) and the National Association of Medical Equipment Suppliers (NAMES).