Disappearing Coverage

Insurance companies are
denying coverage for ostomy supplies

By Colin Cooke

Reviewed by Linda Aukett

Originally appeared in the
March 2009 issue of
The Phoenix magazine.

As many of our readers will know, the United Ostomy Associations of America (UOAA) and its predecessor, the United Ostomy Association, have worked hard to ensure adequate insurance coverage for ostomy products is available to all ostomates. Over the last ten years, this has largely been focused on protecting and enhancing coverage by Medicare and state-run Medicaid programs. The majority of people with an ostomy are covered by Medicare and/or the state Medicaid programs which are funded by taxes.

However, over the last few years, an increasing number of private insurance companies have either reduced or eliminated ostomy supplies as part of their health coverage.

IPrivate Insurance

Some health insurance companies provide coverage in the form of Medigap policies that serve to supplement or 'top-up' the benefits provided by the federal Medicare program (see The Phoenix magazine, September 2007 issue). These do not represent a problem, because these policies are mandated by the government-run Centers for Medicare and Medicaid Services (CMS) to cover ostomy supplies.

Similarly, Medicare Advantage programs issued by private insurance companies are required to provide benefits and coverage at least as good as those provided by traditional Medicare, which includes ostomy supplies. Some state Medicaid programs are administered in whole or in part by private insurance companies, but the benefits are determined by each individual state.

This article addresses concerns regarding comprehensive insurance plans offered by private or commercial insurance companies. The premiums for such plans are normally paid by the ostomate, his or her employer, a family member or their employer. Many of the insurance companies are household names such as Aetna, United Healthcare or they are members of the Blue Cross-Blue Shield Association (BCBSA) that are not-for-profit organizations.

No Guarantee

Health insurance is often paid for, at least in part, by contributions from one's employer or family member's employer. The Employee Retirement Income Security Act governs coverage by such policies, but coverage of ostomy supplies is not mandated. It is left up to individual states to determine what will or will not be covered within that state. There is only one state, Connecticut, which has a law mandating coverage of ostomy supplies by all comprehensive medical plans sold in the state.

There are three main types of health insurance plans: preferred provider plans (PPOs), health maintenance organization (HMO) and traditional or indemnity plans. Whichever type of plan you have, if you are not a Connecticut resident, there is no guarantee ostomy supplies are covered or that coverage will continue.

If your insurance is provided through an employer, it is likely that it is a standard policy and the employer is totally unaware whether or not the policy covers ostomy products. This is probably also the case if you obtain your insurance through some other group or association.

Coverage Cancelled

In recent years, insurers are advising their plan holders that they are no longer going to pay for ostomy supplies. The most common reason given is that medical supplies are not covered and ostomy supplies are medical supplies. Usually, when the insured explains the necessity of ostomy supplies, they are not met with much understanding.

The most that they achieved was a delay before the insurer stopped paying for the supplies. Often, the insurer has suggested that when the contract is next renewed, the employer could have a 'rider' added to the policy that would add ostomy coverage; this would, of course, be at an additional cost.

Even when the insurer is made aware of the situation and is sympathetic, getting something done to correct it seems to take years rather than months!

When coverage is not coverage

There are also a number of ways in which some insurance plans theoretically pay for ostomy supplies, but in effect this coverage is of no or minimal benefit:

High Deductibles - In some cases, there is a deductible specifically applied to medical supplies or to durable medical equipment, orthotics, prosthetics and medical supplies (DMEPOS). If you do not use much in the way of other DMEPOS items, the deductible may be higher than your annual expenditure on ostomy products and the insurer will therefore pay for none of them.

Designated Suppliers - Some plans restrict beneficiaries to one or two suppliers with whom they have negotiated low payment levels. This can also mean that only a restricted range of products is available.

High Co-Payments - Some plans not only have a high deductible, but may also require a high co-payment on each order of ostomy supplies.

Utilization Restrictions - Sometimes, plans restrict usage to levels well below what is allowed by Medicare and what many people need each month.

Low Fee Schedule - Historically, the fees paid by private insurers for ostomy products have been close to the fees paid by Medicare. However, some policies are now paying as little as 60% of Medicare fee levels. In such cases, the cost to a supplier would therefore be higher than what the insurer would be paying for them.

For one insurer, there is not a single supplier within a whole state that will be willing to supply at an insurer's payment levels. The only reason for an out-of-state company to provide ostomy products under such circumstances is that they are a 'loss leader' that enables them to also supply other products that are more profitable. This, plus their distance from their customers, means that they are unable to support people who have recently had their surgery and need to try different product samples and often will only provide only the cheapest ranges of products!

Improving the Situation

Non-coverage or very poor coverage by private insurers is a problem that did not really exist a few years ago. As stated above, in some cases insurers drop coverage inadvertently as they do not realize what they are doing when they cease coverage of medical supplies. Nevertheless, once coverage ceases, it is a very slow process to get it reinstated even if the insurance company agrees.

The UOAA is making a coordinated effort to restore, or better still, prevent the loss of ostomy supply benefits by those who have private insurance.

How You Can Help

We need to hear from anyone who has poor coverage for ostomy supplies or who has been notified of a loss of benefits. If this affects you or someone you know who is insured by a private insurer, please contact us at advocacy@uoaa.org or by calling the UOAA's toll-free number: 800-826-0826, and let us have the following information:

- Your contact information including state
- The name of your insurer and your specific plan
- Details of the problem

Thank you for your help. We hope this will make it possible for us to retain or even restore the shrinking coverage for ostomy supplies.

Surveying mail order suppliers

Surveying ostomy equipment
suppliers to find the best
selection, availability and price

By Colin Cooke and Linda Aukett, UOAA Advocacy Chair

Originally appeared in the
September 2008 issue of
The Phoenix magazine.

Most people with an ostomy would probably prefer to obtain their supplies locally. This is especially true after surgery when you might need more help in the way of advice and samples before settling on what are the most suitable products to use long-term. Conversely, some may have no choice with regard to supplier as that is something determined by their insurer.

However, many people may not be able to find a suitable supplier locally or may find themselves in a position in which their local supplier is unable or unwilling to meet their needs in terms of product, price or accepting Medicare assignment. The UOAA Advocacy Department recently conducted a survey to help those who cannot or do not wish to purchase their supplies locally. The survey covered the leading companies that have a significant mail-order ostomy business.

Survey Objectives

For each of the 14 companies, we gathered information on the following factors that might be important in selecting a supplier:
- The breadth or range of ostomy products routinely stocked
- Policy with regard to acceptance of Medicare assignment
- Prices charged when insurance assignment is not accepted or when the customer does not have insurance

Survey Methods

Information was obtained from the suppliers' catalogues, websites and by phone from their customer service departments as appropriate. Of the companies surveyed, 12 were registered Medicare suppliers and therefore must file Medicare claims.

A range of 44 products that constituted a representative range of commonly used ostomy products was chosen. For each product and for each supplier, it was then determined whether it was routinely stocked, and if so, whether Medicare assignment was accepted for that product.

For products on which assignment was not accepted and/or for customers who were not Medicare beneficiaries, the retail price was determined. Additionally, the shipping and handling policy and related charges were ascertained. Since around two-thirds of people with an ostomy are Medicare beneficiaries, it was important to determine the suppliers' policies with regard to Medicare, but it was impractical to try to obtain information with regard to the hundreds of other private insurances that many of the suppliers accepted.

Survey Findings

1. Six companies routinely stocked all or all-but-one of the 44 products in the survey: AOS, Liberty, Medical Care Products, Parthenon, Sterling Medical and S.G.V. Medical Supplies.

2. Four companies accepted assignment on all or all-but-one of the 44 products in the survey: Liberty, S.G.V. Medical Supplies, Sterling Medical and Medical Care Products.

3. Six companies with the lowest prices when Medicare assignment was not accepted (retail prices) were, starting with the lowest: JRS Medical, SGV Medical Supplies, Express Medical, Parthenon, AOS and Medical Care Products.

Note: Overall price levels were determined by comparing the retail price with the Medicare fee for each product and averaging those comparisons for each retailer.

Advice and Conclusions

Regardless of what type of supplier you are dealing with, it is your individual needs, both in terms of the specific products you use and your insurance coverage, that are important. Before buying from a new supplier, it is essential that you ask the following questions:

- Am I confident that this supplier's
customer service is good?
- Does this supplier stock the exact pack size
of the exact product that I need?
- Will they accept Medicare or my insurance
on the products I use?
- If I do not have insurance or Medicare is not accepted, are their prices the best that I can get for my specific products, taking into account any shipping and handling charges?

It should be borne in mind that our survey did not attempt to evaluate non-quantifiable needs such as customer service. However, we did find that for Medicare beneficiaries, it is possible to find a supplier that will accept assignment on your ostomy supplies.

We also found great variations in prices and you may be surprised at how cheaply you can buy. For example, the retail prices of the products included in the survey from the most expensive supplier were on average more than 71% higher than those of the least expensive supplier. Additionally, the survey found the highest retail price was more than 90% higher than the lowest retail price for the same exact item!

If are looking for a supplier or are considering changing your supplier, Linda Aukett (laukett@uoaa.org) would be happy to give you some advice and a list of three or four companies you might consider.

Without Coverage

If you are between jobs, can't get back to work right now because of surgery or illness, just started work but insurance isn't in place yet, just applied for disability but no benefits yet, or a host of other hopefully temporary circumstances, most of the major pouch manufacturers have programs that will help you out for a while. Call the customer service toll-free number for the manufacturer of the pouch you are using and ask what kind of help they might be able to offer. Maybe a box of samples will be enough or maybe you need another kind of program.

We regret that UOAA does not have a specific program that enables us to provide supplies. Occasionally, UOAA affiliated support groups have items that have been donated to them from members who have changed to other products or by the families of deceased members. You can see a list of them at www.ostomy.org or call the UOAA toll free number. Local branches of the American Cancer Society may also have a stock of items that are available for the asking.

There are a few programs managed by local groups that try to help out people in their own communities. Rather than try to list them here, it is best that you call UOAA at 1-800-826-0826 to see if one is close to you. If you know of such a program, we'd appreciate your letting us know so we can add it to our list.

Medicare Assignment

Accepting Medicare assignment indicates that the supplier is willing to provide products at the Medicare fee schedule amount and to charge the customer only 20% of that amount, with free shipping and no billing of any balance to the customer. Since the Medicaid fee schedule amounts are generally lower than retail prices, this means a savings to the Medicare customer.

Some suppliers have signed a contract to accept Medicare assignment on any item they provide; they are known as "Medicare Participating Providers." Other suppliers may accept assignment on a wide range of ostomy supplies, but have not contracted to do so. They reserve the right to not accept assignment and instead charge the full retail price. In a non-assignment transaction, the supplier can charge for shipping and can request payment in full at the time of the purchase. Registered Medicare suppliers are still obligated by law to submit the paperwork for the Medicare claim, even when assignment is not accepted.

Competitive Bidding

Some of you may have read or heard from your supplier about a competitive bidding (CB) initiative that was to be introduced by the Centers for Medicare and Medicaid Services (CMS).

The introduction of CB, sometimes called Competitive Acquisition, has attracted much publicity. CMS hoped that it would enable it to save money on the medical equipment and supplies provided to Medicare beneficiaries.

The implementation of CB commenced on July 1, 2008 and initially affected just 10 areas (Metropolitan Statistical Areas or MSAs) and included 10 product categories. This has now been suspended as the result of action by the U.S. Congress in early July. It will be delayed for about two years. Ostomy supplies were not slated to be included in the early phases of the program and may never be subject to CB.

However, there was much concern among suppliers and organizations, such as the UOAA, that represent beneficiaries, because it is thought that the introduction of CB will very likely lead to a reduction in the number of suppliers and might compromise your freedom to choose the particular product to be used for your specific needs.

The UOAA is pleased that the CB program is delayed and hopes that, if it is reintroduced at a later time, it is done so in a way that will cause no problems to those who utilize the medical supplies involved. The UOAA will monitor future developments and will ensure that you are kept appraised of any meaningful developments.

ordering supplies 101

How to find the right supplier for your needs

By Linda Aukett, UOAA Advocacy Chair

Originally appeared in the
Winter 2005 issue of
The Phoenix magazine.

Having ostomy surgery brings with it a crucial need to obtain the proper pouching systems in an affordable manner in sufficient quantities on a reliable, ongoing basis.

While in the hospital, your supply needs should be met and, hopefully, there is an ostomy specialist - a wound, ostomy and continence nurse (WOC Nurse) - to help you determine the right product and how to order what you need.However, given the medical system in the U.S., it is entirely possible that you may not have the advice of a WOC Nurse and that you will be sent home with just one pouch and little or no knowledge about how to get more.

If you are receiving care from a home health care agency (see sidebar), it is vital to know that they are responsible for providing your ostomy supplies while you are under their care. As you recover and become interested in what else is available to meet your needs or if your needs have changed over time, this article will try to assist you in that search.

We will not go into the extremely wide range of pouching systems available as you should seek the advice of a WOC Nurse to find what's best for you, especially if you have abdominal contour problems or skin sensitivities. You can find a WOC Nurse by calling 888-224-WOCN (9626) or by visiting www.wocn.org.

Different Types of Suppliers

Suppliers come in all shapes and sizes, from large to small to half-way in between. Each type has its strengths and each faces challenges in the ostomy marketplace.

Local medical equipment suppliers. More than half of all supplies are probably sold by local dealers of home medical equipment and supplies. They may specialize in ostomy, but usually they also sell diabetic supplies, home and bathroom safety devices, canes and walkers, orthopedic products - and either sell or rent so-called durable medical equipment (wheelchairs, hospital beds, etc.). You can walk right into these stores, get to know the staff and look at the products on the shelf. Their selection may be a bit limited, but sometimes they will special order items for their customers. Their prices might be a little on the high side, but personal service is usually on the high side as well.

For products on which assignment was not accepted and/or for customers who were not Medicare beneficiaries, the retail price was determined. Additionally, the shipping and handling policy and related charges were ascertained. Since around two-thirds of people with an ostomy are Medicare beneficiaries, it was important to determine the suppliers' policies with regard to Medicare, but it was impractical to try to obtain information with regard to the hundreds of other private insurances that many of the suppliers accepted.

Medicare customers might prefer to patronage such a 'hometown' dealer if they accept Medicare assignment (see sidebar) or if the customer is willing and able to pay at the time of purchase, file the necessary reimbursement forms and wait to get their check from Medicare (usually just 4-5 weeks). It is increasingly difficult for local suppliers to accept Medicare assignment because of the small difference between wholesale prices and the amount that Medicare is willing to pay. UOAA, and our forerunner UOA, have worked hard to convince Medicare and Congress to keep these payments at a level that makes it possible for local suppliers to keep accepting Medicare assignment.

A subset of the local dealer is the one that specializes in ostomy supplies. This dealer might be someone who has an ostomy (or a family member does) or they are or have been a WOC Nurse or ET. Personal service and problem-solving assistance is a real plus when dealing with this type of supplier. This group faces many of the same problems of other local dealers when it comes to pricing or being able to accept Medicare assignment.

National/mail-order suppliers. Another major category of suppliers is the national/mail-order companies. They stock a large selection of supplies and their prices tend to be on the low side as well. Possible drawbacks are shipping delays/expenses (especially for any returns) and limited or no special orders.

Based on a survey of mail-order suppliers a few years ago, it is my analysis that the mail-order companies use this advantage to do business in one of two ways: they either lower their retail prices as much as possible or they focus their business on accepting Medicare assignment as much as possible. Only a very few find it possible to do both.

All of them have toll-free numbers, give excellent and quick service, offer free shipping on retail purchases above a certain level, and most have staff who are able to give advice regarding management problems. Most also now have their catalogs online and accept orders through their websites.
Since the explosion of the Internet, we have seen the emergence of some hybrids. They started as a local supplier and have branched out into the mail order end of the business by developing a website with an online catalog and ordering capabilities. Many of these hybrids offer a limited number of product lines and rarely accept Medicare assignment. Some don't even have Medicare supplier numbers, so the customer has to do all the filing of claims in order to be reimbursed.

Which Type is Best?

This is a question that has no single answer. It will always depend on whether it is better for your unique situation. Your mobility, your insurance, your economic situation, your specific supply needs, your preference in making a selection - these will all enter into the decision you make about which supplier to use. There is sufficient variety among the existing suppliers that you ought to be able to find one that will suit YOU better than the others.

How To Find A Supplier

If you or a family member are in need of ostomy supplies, there are several ways to locate them. From ostomy publications to the phone book to your insurance provider, we will cover the main ways to locate an ostomy products supplier.

The introduction of CB, sometimes called Competitive Acquisition, has attracted much publicity. CMS hoped that it would enable it to save money on the medical equipment and supplies provided to Medicare beneficiaries.

You may be able to get names of suppliers from Medicare or from your insurance company. Medicare will give you the names of "participating providers" who have agreed to accept the Medicare payment plus your co-payment for supplies. From research, we know that less that 20% of the Medicare participating providers actually sell ostomy supplies, so that kind of search will lead to many dead ends.

Insurers other than Medicare also may have preferred providers. For some, these are just suggested suppliers, but for others they are the only providers recognized. Check with your insurance company before you start shopping for ostomy supplies. It is important to remember that not all the preferred providers will actually carry ostomy supplies or have just what you need. You may find yourself having to educate the staff of your insurer about what people with an ostomy need.

Don't be afraid to assert your rights under the terms of your plan. Please call the UOAA Advocacy Department at 800-826-0826 if you need help or e-mail advocacy@uoaa.org.

Finding local suppliers from trusted sources. If your stoma nurse hasn't already provided you with a list of local suppliers, now is the time to ask. Your surgeon's office might also have a list of suppliers, but it's a long shot. A local office of the American Cancer Society is another place to look.

Another excellent source for finding a local supplier is your local UOAA affiliated support group (see www.ostomy.org or call 800-826-0826). Many support groups have local ostomy supply advertisers in their newsletters.

Finding local suppliers in the phone book. You are most likely to find listings under "Medical Equipment and Supplies." If that fails, try "Durable Medical Equipment," "Home Medical Equipment" or "Surgical Equipment /Supplies." It is very unlikely that the phone book will have the category "ostomy" - though perhaps some do in very large cities.

The "Medical Equipment and Supplies" category will list some specialists in respiration products, mobility, etc. You might have to call a few before you find one that carries ostomy supplies. While you have them on the line, be sure to ask if they have the item you're looking for in stock. Another good question to ask is if they take Medicare or whatever insurance you have.

Local drugstores and the local outlets of national chains are very unlikely to carry ostomy supplies. If they do and wish to take on new customers, they will be listed with the other suppliers in the "Medical Equipment and Supplies" category.

If you are in a very small community and your phone book doesn't have any ostomy suppliers, think about going to your public library to look at phone books for the larger communities around you. Calling directory assistance for that larger community probably won't help unless you have the actual name of a supplier.

Finding local suppliers online. To continue your search for local suppliers, it's helpful to know that the Yellow Pages are available online: http://yellowbook.com/. Enter "medical supplies" in the "What are you looking for?" field, enter your location and then click "Find it."

Finding national/mail order suppliers from trusted sources. This magazine is the first place to look for a national ostomy supplier. Suppliers who advertise in The Phoenix know ostomy supplies and many have decades of experience meeting the needs of ostomates. They have decided to support the UOAA and ostomy community by advertising. Please show your appreciation by mentioning you saw their ad in The Phoenix magazine when you place an order.

Finding national/mail order suppliers online. A whole new world opens up if you are able to connect to the Internet. Sometimes that world can be a bit overwhelming and hard to navigate.

A great place to start is the UOAA web site. We are currently building an advertiser's page which will have many national suppliers. The UOAA discussion board is also another excellent source to ask questions and find a supplier

For these national search engines, it is best to use the term "ostomy supplies" so that the best answers appear at the top of the list. You will find that "sponsored" links are usually listed. These are links that someone has paid to appear when certain key words are entered in the search engine. Sponsored links will take you directly to an advertier's web site where you can look for items, compare prices and order supplies online.

While it is not a conventional supplier, it is sometimes possible to buy supplies on eBay. You need to be careful to calculate the reserve and what you might intend to bid, in addition to the shipping responsibility, in order to determine if you are getting a reasonable deal by buying in this way. As this is written, there are 62 lots or items of a range of products available on that site.

Medicare Assignment

Medicare assignment is the act of the Medicare beneficiary signing an agreement that the reimbursement payment that would normally come to the beneficiary will instead go to the supplier that has provided goods or services. The assignment of benefits is very common, especially with physicians and other health providers, but is not often explained.

When discussing suppliers and ostomy supplies, we often speak of whether or not the supplier "accepts assignment." When a supplier accepts assignment, they are agreeing to accept the price set by Medicare for a particular product. This is critical in the ostomy marketplace because Medicare's payment for ostomy supplies is sometimes lower than the supplier's cost for providing them.

Home Health Care

It is becoming more common for someone who has just had ostomy surgery to receive the services of a home health agency in the first few weeks after discharge from the hospital. Since 2000, Medicare regulations have provided that during this period, the home health agency is responsible for providing ostomy supplies to those Medicare-eligible patients who need them. The agencies meet this in one of two ways (although we know that some agencies still fail to realize their responsibility):

Some have set up contracts with a local dealer or national mail-order company to supply what the patient needs. A benefit is that the supplier is more likely to have the range of products that includes what the patient needs. Plus, the patient can easily continue ordering from the supplier once the home health agency discharge has occurred.

Some home health agencies have chosen to supply the patient from items that they have in their own supply room. There may be serious drawbacks to this arrangement if the patient needs a special product that is not stocked, or if the patient needs more products than the agency is able or willing to provide in a timely manner. There is a well-known incidence of pouch failure and need to try other products during this post-operative period, which an agency formulary is not likely to be able to contend with effectively.

Even long-term ostomy patients who for some reason have to receive home health services must rely on the home health agency during that period of time to provide their supplies.

A survey of those who had a home health episode in the prior 3 years, conducted by UOA in late 2004, found that 21%, or a significant minority of Medicare beneficiaries who receive periods of home health care, experienced problems with regard to the provision of their ostomy supplies, either at the time of transitioning to and from home health or during the home care period. Many of those who responded said they felt so negatively affected by this experience that they would refuse home care services in the future because of the disruption it caused to their getting the supplies they needed.

For these reasons, the UOAA's position is to oppose the continuation of bundling ostomy supplies with the Medicare Part A home health benefit. We have proposed legislative changes to Congress, and hope that you will actively support this campaign and educate your own Congressman about it. See www.ostomy.org/advocacy for more details.