Dealing with the co-pay conundrum
YARMOUTH, Maine - You're damned if you do, and damned if you don't. That's the bottom line when providers try to collect the 20% Medicare co-pay from beneficiaries, according to a recent HME NewsPoll.
HME suppliers who responded to the October poll clearly see themselves stuck between a rock and a hard place. If they push too hard for co-pays, they risk losing customers to suppliers who won't push so hard. If they give in on co-pays, they lose 20% of revenue on a given product, which, as many point out, is more or less equal to their profit.
So just how successful are HME suppliers at netting co-pays? As many providers collect 76% or more of their co-pays as those who collect 25% or less. Overall, half of the respondents figure they're getting 25% to 75% of co-pays due to them.
Those numbers are not so hot. And there's not much evidence of a clear-cut strategy to improve those percentages. Co-pays are costly to collect and you risk losing customers, providers said.
"If one distributor doesn't collect the co-pay, then clients prefer to stay with them vs. a competitor who is following the rules but charging the 20%," said one supplier.
That fear is a refrain among suppliers. They believe that referral sources seek suppliers who won't insist on co-pays. They believe that some suppliers use this as a marketing tool over the competition. And they believe that national HME suppliers "write-off or waive co-pays as a means of attracting patients."
Even if you've decided to aggressively pursue co-pays, the costs of pursuit are daunting.
"It takes just as much time to collect $50 from the patient as it does to collect $500 from the insurance," said Luis Sologuren, COO of American Homecare Equipment in Fort Lauderdale, Fla.
"To send out a bill or statement, envelope and stamp is simply not worth the time or expense when you know you are not going to be able to collect," said Shannon Duncan, who works in accounts receivable at Pro Medical Equipment & Supplies in Huntsville, Texas.
So what are suppliers to do? They strike a common chord here, too:
* "Ask for it upfront," said Bill Stelzer, general manager at Green Bay Home Medical Equipment in Green Bay, Wis.
* "Get credit cards or payment at time of delivery," said one supplier. "Many can afford but are spoiled. They tell us they can't (pay) just to not pay, and in the past we let it happen to make the sale."
* "Collect the initial co-pay upon delivery for both rental and purchase," said Robin Martin, owner of Adroit Medical Equipment in San Antonio, Texas. "It sends the message that the co-pays are real."
Suppliers understand that some beneficiaries are simply pressed for cash, but education and payment plans work, they say.
"To collect my co-pays, I set up a payment plan for my clients," said S. K. Lannon, a medical biller at Keyser Medi-Save Pharmacy in Keyser, W.V. "It has worked very well, not only with co-pays, but also deductibles. I have very few clients that do not pay their co-pays."