In the face of many DME issues, many ask if continuing as a DMEPOS provider is worth the costs ($709/3 years) and the exposure (audits). Let’s break these discussion points down and provide the economics for becoming and maintaining your enrollment as a DMEPOS provider.
If one could equate a dollar a reason for staying a DMEPOS provider, this column will provide $100,000 reasons… for continuing as a DMEPOS provider.
- For those pedorthists and orthotists reading this column, unless you will not be seeing Medicare patients, there is no choice but to become and/or retain your DMEPOS provider number (PTAN). Your only choice is whether to continue your enrollment as a participating or non-participating provider. This is a complex question, the answers which are deeply rooted in the social economic demographics of your facility’s location and which products you provide.
- For physicians (including podiatrists), you may also question your participation status for yourself as a physician of medical/surgical services. But questioning whether one should roll back the clock 30+ years ago and simply revert to prescribing and not dispensing will cost you dearly.
- Some cite the fear of or possibly losing an audit as reason for abandoning providing DMEPOS. Others cite the $709 enrollment/reenrollment fee as another reason. Let’s debunk these once and for all.
These are NOT rationale business reasons for abandoning both a significant stream of income for your practice and depriving patients of your hard-earned clinical knowledge.
- $709 over the course of a three-year enrollment timeframe is equivalent to $4.54 a week per office location. No matter the number of doctors, the enrollment (if done properly) is still $4.54 per week for each office location. How much income does your practice generate from DME in a week or month as compared to your enrollment fee?
- Costs of enrollment: Assuming you hired (and I suggest you do) an expert to complete your group enrollment and they charge you $500-$1000 for a three-year enrollment. That comes to $3.20-$6.40 per week again no matter how many physicians (or providers) are in your practice.
- For physicians (DPM, MD/DO), your current office liability (premises) insurance costs are the same whether or not you are a DMEPOS provider. For providers who are not physicians, there are other costs such as Surety Bonding and/or Facility Accreditation which is beyond the scope of this article.
The total fixed costs for enrollment A+B above ranges from $8-$11 per week. No matter how much DME your podiatry practice provides, your fixed costs for enrollment will not rise beyond the above.
Let’s look at some other issues:
- Conservative Care vs. Surgical Care: A good rationale for providing DMEPOS such as AFO’s is that allows one to treat patients with sophisticated technology, yet conservatively. Many liability cases are brought about because patients were “rushed” into surgery without a period of conservative care. DMEPOS such as many AFOs custom or OTS, provide a time saving method by which to immobilize patients before considering surgery, or in the pre or post operative phase.
- Audits: While much has been bantered about DME audits, there are far more cases or audits of podiatrists involving routine foot care codes, which turns out to be the most frequent services provided by podiatrists. While people grumble about these audits, few practices would survive without providing routine foot care services.
- Documentation: Medicare contractors have freely accessible policy language on their website and KevinRoot has many similar resources to assist you with documentation and will soon be providing more. Audits are a way of life, they can’t be prevented or avoided. But they can be successfully met head on with the correct documentation.
- Global periods of surgical care: Assuming you performed a posterior tibial attenuation and secondary repair, your fee(s) cover all post operative care for 90 days no matter how many times the patient comes to your office. Assuming an easy recovery with no complications that may be as few as three of four post operative encounters, all of which are all non-chargeable events.
- DMEPOS fees are tied to the economics of inflation, whereas medical surgical services are tied to the conversion factor and RVU. This has led to a continued increase in DME fees over the past three decades, keeping DMEPOS fees up with inflation. Whereas medical/surgical services adjusted for inflation have been cut 30% or more.
If the above are not sufficient reasons to continue as a DME provider, let’s look at some everyday tangible economic costs you will give up if you are a small practice providing one custom fabricated hinged AFO (with padding) a month for 3 years. Using the lowest (floor) fee from Medicare and a fee of approximately $300/device that would generate a three-year profit of approximately $21,000. Most state’s fees are significantly higher than the floor fee, thus the fees and net profit generated likely will be much higher. Most busy podiatry practices should easily eclipse that amount with some doing more than a few a week!
In addition to forfeiting all the above, a practice abandoning their DMEPOS provider number will also forfeit all the revenue generated from off the shelf items, including Cam Boots, ankle support orthotics, plantar fascial night braces as well as a myriad of surgical dressings. How much revenue does your practice generate from these items a week, a month, a year? Two pneumatic cam boot dispensed a week will easily translate to approximately $90,000 in profits over the course of three years.
Lastly and perhaps most importantly, your Medicare patients who have secondary insurance benefits for custom fabricated foot orthotics, all require the claims to first go through the Medicare DMEPOS provider for claims processing and rejection. If you surrender your enrollment in DMEPOS, you forfeit the ability for you or your patients to be reimbursed by their secondary insurance for foot orthotics.
Given all the above figures, it is easy to see how an individual small practice can easily achieve in excess of $100,000 in net profit over a three-year period. Larger practices would surrender even more! That’s not something to easily walk away from!!!!!
