Madison, WI (OpEdNews) Let me begin with the observation that, in offering evidence of a scam that takes advantage of Medicare, I am not thereby implying that the actions involved are therefore illegal. It may be the case that, due to a loophole or the way specific legislation was written, an entity like Home Health United can take advantage of its opportunities under the law to make profits that, by any reasonable standard, appear to be excessive. In this case, the numbers indicate that HHU is making more than 100% profit per year through the rental of a medical device, where I have been told that there are more than 1,000 others in the Madison area with my condition, suggesting that, on the national scale, this practice may be costing taxpayers billions --or more!
Here's my story. In February, a visitor with a medical background was a guest in our home. When we arose the next morning, he told me I suffered from "sleep apnea", which is a condition during which there is a discontinuation of breathing while sleeping. His observation led me to arrange for a "sleep study" to determine whether I was, indeed, in need of some form of remedial assistance. This infuriated my wife, who had been telling me for fifteen years that I stopped breathing in my sleep. Sometimes it takes an outside source to see things that our spouses have known all along. The sleep study showed that I was experiencing 92 "premature ventricular contractions" each hour, but that with a breathing apparatus, that number was reduced to 2.
That sounded serious to me, so I made an appointment to determine the equipment that would work best for me. I visited the heath care company, Home Health United, 4639 Hammersley Road, Madison, WI 53711, and met with a breathing care specialist. After discussion, she recommended a machine known as the BiPAP Auto M Series with Bi-Flex, which, it turns out, retails from Respironics for $1,439.
She asked me if I wanted to purchase the machine, but even though the retail price included the humidifier--a shaped plastic insert that is about 7.5"x3"x2.75", which fits snugly in a compartment of the BiPap machine, which is about 8"x8"x3.5"--that still sounded like a lot of money to me, so I was relieved when she said I could rent it, instead. When I asked if I could do that, she told me that Medicare would pay for it.
So I signed on the dotted line, took my machine with me, and began to experience the joys only a BiPap can bring, including the face mask and hose that connects to the machine, shaving at night to create a tighter fit (so leaking air would not awaken my wife), and transporting it when I traveled abroad. I wondered how many were in a similar state and was told that there were around 1,000 who used them in the Madison area alone. I didn't think much more about it until, toward the end of the year, my wife shared with me Medicare Summary Notices that showed Home Care United Inc, 2802 Walton Commons W, Madison, WI 53718, had been charging Medicare a rental at the rate of $385 for the BiPap and $55 for the humidifier each month since February. That sounded like a lot of money to me.
The problem I had was interpreting the Medicare Summary Notice, since there were four columns of figures, which were laid out like this:
Medicare Summary Notice for BiPap w/humidifier Rental
I am not terribly good with numbers--I often have trouble balancing my check book--but it seemed to me that, if Medicare was being charged $440.00 per month to rent a machine that retails for $1,439, someone--Home Care United Inc., in particular--was getting a good deal, since every ten months that would add up to $4,400.00 and, on a yearly basis, $5,280.00, for a profit that looked a lot like $3,841.00.
I figured I must be doing something wrong, so I called Medicare and the woman very patiently explained that Medicare only pays 80% of the Amount Approved, so I should be using the third column, not the first, to make my calculations. So instead of $440.00 per month, the actual cost to Medicare was instead $206.13, which, multiplied times 12 months, meant a rental fee of $2,473.56. And my supplemental insurance with Dean Health Care was picking up the extra charge of $51.53. So United Health Care Inc. was actually receiving $206.13 plus $51.53 per month or $257.66 per month or $3,091.92 per year.
Since it seemed to me this might go on interminably, I asked how many payments were involved and learned from Medicare that there would be 13 payments for the machine but only 10 for the humidifier before I would own them--compliments of Medicare. So the total for my $1,439.00 machine with humidifier turns out to run $2,679.69 (at $206.13 x 13) plus $510.30 (at $51.53 x 10) or $3,189.99, for a profit of $1,750.99, which is $3,189.99 less retail price of $1,439.00. That, I take it, is a profit ratio of about 122% over a 13 month interval. And if you consider that the actual manufacturing price of the machine may be, say, closer to $439.00 instead of $1,439.00, the actual profit ratio may be far closer to 400%, which is not bad for 13 months of billing!
Bear in mind that I have been told there are 1,000 others like me in the Madison area alone. Since Madison has a population of around 250,000, if we assume that this is a random sample, then since the population of the United States is more than 300,000,000, there may be as many as 1,200 Madison-equivalents in the United States for machines like mine alone. The profit from 1,000 in Madison, given the assumption that my experience is typical, would therefore run a profit of 1,000 x $1,750.99, which is $1,750,990.00 for Madison alone. Assuming there are 1,200 Madison-equivalents in the United States, profits run around $2,101,188,000.00 for this one kind of care every 13 months. That may explain why the health care industry has such an enormous stake in health care reform, not because it might benefit the American people but the truly extravagant profits involved.
Neither the Medicare specialist nor my Dean Health Care advisor questioned the charges from Home Care United Inc. and they were both very helpful in making sure that I understood the numbers.Let me emphasize again that I am not suggesting that Home Care United Inc. is doing anything remotely illegal. Slavery used to be legal, too, but it was morally wrong and we eventually straightened that out. But these numbers strongly suggest why our health care expenses are devouring the nation's wealth and why a government-run health care system of the quality and success of Medicare must be administered on the basis of competitive bidding --where contracts are written and managed with extreme care in order to contain the insatiable quest of contractors for greater and greater profits-- is in the nation's interest. It may be perfectly legal, but something is definitely wrong.
