ACA mandate pumps up biz

In its first year, benefit proves popular among nursing mothers
Friday, January 24, 2014

At Lehan Drugs, the breast pump business is going “crazy.”

“Every month I double what I did last year,” said DJ Larson, vice president of sales and marketing for the DeKalb, Ill.-based provider, which has hired a lactation consultant and markets itself as a one-stop shop for women’s health.

The Affordable Care Act requires insurers to pay for breast pumps. The benefit kicked in for most women on Jan. 1, 2013.

While that has opened up opportunities for providers—especially those that use them to round out their women’s health offerings—payments for the pumps can be unprofitably low, they say.

“They are trying to figure out loopholes and ways to get out of paying,” said Vicky Jones, owner of the Dallas-based Women’s Health Boutique. “It’s a challenge finding a good pump that I can recommend and take insurance on.”

That’s been the experience at Herron & Smith, which sells a few pumps a month.

“What we have found with some of the allowables is that it’s so low, it doesn’t even cover an electric pump, and sometimes it barely covers the cost of a manual,” said Tamme Dustin, director and CFO of the Hooksett, N.H.-based company.

At Lehan, the provider keeps a spreadsheet to track who pays what. Some of the larger insurers, like Blue Cross and Humana pay well, while smaller insurers do not, says Larson.

As with other types of DME, customers have the option of paying out-of-pocket to get what they want, say providers.

“It’s a 50-50 split,” said Larson. “Some don’t want to pay a single penny, then you get other moms that want the best of everything and they pay the difference.”

That can be tricky business, however, points out Jones.

“The customer calls the insurance company, which tells them I have to accept assignment (on the pump they want),” she said. “It’s not a fight I can win.”