Monday, April 28, 2014
WASHINGTON (April 23, 2014)—Price scrutiny in the DME industry is intense. Providers are often challenged on their Medicare and other third party prices by comparisons of those fee schedules to the amount paid for items on the Internet and at retail stores.
People often say, “I can buy that for X amount on the internet” or, just as often, “Y store has that exact item for X dollars.” What they don’t consider is whether this is a valid comparison given the differences in the types of transactions.
The simplicity of the transaction, whether it is ordering an item online or a cash sale at the local drugstore, is a factor in what an item costs overall, as is how a person chooses, or is required to purchase, an item.
An online purchase may include a shipping charge. At times, the shipping charge may be waived for a repeat customer, or during a busy season. A person may drive to a store to purchase an item and pay less because they have chosen to absorb the time and delivery cost by going to the store.
To explain the transaction differences, AAHomecare created an order comparison infographic. It compares the basic steps of internet, retail and Medicare DME transactions.
Throughout the past 10 years, Medicare transactions have seen tremendous increases in what is termed “regulatory costs”—those additional steps that a provider is required to follow in order to bill Medicare.
Comparing sale prices from one setting to the next is impossible as the costs to complete transactions cannot be compared. Yet, the bidding program, legislators and regulators have created an environment that does exactly that.
So, the next time someone complains about your prices in comparison to online stores and other retailers, show them this infographic to help them understand why your costs are higher. Also, share it with your Senators and Representative and let them know how much it costs to do business with Medicare.
Click here to download the DME Order Comparison Infographic.
