Health care|November 14, 2011 11:35 AM

Medicare, insurers push patients to overpay for home medical equipment

Case of oxygen concentrators: Buying costs less than renting

Medicare routinely advises seniors to rent home medical equipment when it would be far less expensive if they bought it.

Medicare, the government health program for seniors, isn’t alone in this practice. Some private insurers do the same thing.

Colorado Public News has found that oxygen concentrators, used by patients who have trouble breathing, are a prime example of the high cost of renting home medical equipment. Years of investigations and reforms haven’t fully solved Medicare’s problem with overpaying, partly due to orders from Congress.

A new concentrator can cost just $695. But Medicare tells seniors to rent the machines on 36-month contracts that add up to $6,234, or nearly 10 times that amount. Prices are set by Congress.
Medicare and taxpayers cover most of that. Patients pay 20 percent of the monthly rental fee of $173.17, but even just the patient co-pays add up over three years to double the cost of buying.

An oxygen concentrator is about three feet tall and some look like a miniature robot – think R2D2 from Star Wars. The device removes nitrogen from the air, leaving concentrated oxygen. It delivers the oxygen through a clear tube under the nose.

Extra oxygen is necessary for people with serious respiratory illnesses, including emphysema, chronic bronchitis and sleep apnea. In Colorado, high-altitude thin air affects some people’s sleep patterns enough that they need extra oxygen at night to get rest.

Rent includes more

Rental companies say their contracts include services, not just the machine. And some patients are too sick to handle even minor maintenance.

“If you buy an oxygen concentrator, you’re on your own; whereas under a rental agreement with the insurance company, we are on call to service your concentrator 24/7,” said Respiratory therapist Craig Rapp of Longmont’s Bethesda Home Respiratory Services.

But Medicare and some insurers don’t tell their clients that purchasing is a cheaper option.

Margaret Hrchek has been on overnight oxygen for 10 years to control her severe pulmonary hypertension. The Highlands Ranch woman was on an insurance rental plan, but only because she didn’t know that she could buy a machine herself.

“It took me a long time to buy one, because the provider told me a new one would cost $3,200 out of pocket,” Hrchek said. But that wasn’t true. It took my husband 10 minutes on the Internet to find out we could get a good one for $800. It worked so well, we went out and bought a second machine” as back-up.

Hrchek and her husband change out their own filters and breathing tubes, and call for maintenance on their concentrators when it’s needed.

Medicare routinely pays for oxygen equipment, wheelchairs and other “durable medical equipment” through rental plans. Federal audits have cited the waste, and Medicare says it is working to resolve the problem with competitive bidding.

“We’re spending way too much money on this equipment in the aggregate and we know it. The office of the inspector general knows it. And the Government Accountability Office knows it,” said Medicare spokesman Mike Fierberg.

But Medicare won’t reimburse patients who buy their own, even though it saves them and the government thousands of dollars. Congress prohibited it.

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