DME reimbursement

[foot15]

Hello,

For people in private practice working as associates, do you get a bonus/reimbursements from DME, if so, how is it calculated? What is the percent do you get?

Which type of DME do you think is the most profitable for the private practice? If you work alone, do you use specific company to buy in bulk?

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[Hybrocure]

Hello,

For people in private practice working as associates, do you get a bonus/reimbursements from DME, if so, how is it calculated? What is the percent do you get?

Which type of DME do you think is the most profitable for the private practice? If you work alone, do you use specific company to buy in bulk?

For me it is based on my percentage I get x% of my collections and DME is included in that. So whatever profit from the DME I dispensed I get the same percent of that as I do for collections.

For example: Insurance payment for cam boot minus cost of cam boot that office paid for it, then my % from that.


Most profitable? Cam boots and custom orthotics

 

[Boba Foot]

For me it is based on my percentage I get x% of my collections and DME is included in that. So whatever profit from the DME I dispensed I get the same percent of that as I do for collections.

For example: Insurance payment for cam boot minus cost of cam boot that office paid for it, then my % from that.


Most profitable? Cam boots and custom orthotics

What he said.

 

[foot15]

For me it is based on my percentage I get x% of my collections and DME is included in that. So whatever profit from the DME I dispensed I get the same percent of that as I do for collections.

For example: Insurance payment for cam boot minus cost of cam boot that office paid for it, then my % from that.


Most profitable? Cam boots and custom orthotics

What is the percent if you don’t mind sharing?
And you basically get a percent of DME profit not the whole DME reimbursement, meaning if it costs $100 to make custom orthotic and patinet pays/insurance reimbursement is $400, you get paid percent of $300?

 

[Hybrocure]

What is the percent if you don’t mind sharing?
And you basically get a percent of DME profit not the whole DME reimbursement, meaning if it costs $100 to make custom orthotic and patinet pays/insurance reimbursement is $400, you get paid percent of $300?

Correct percent of the profit. I make about 40%

 

[Adam Smasher]

Which type of DME do you think is the most profitable for the private practice?

Unequivocally, beyond a doubt, at ~600% markup, the pneumatic CAM walker is the pinnacle of profit margin. They reimburse better than some surgeries. Meanwhile, I've seen suppliers sell them $20/pair (they were lousy though). DPMs go to jail over skin graft subs, while I am quietly immobilizing my way into early retirement.

 

[Feli]

For me it is based on my percentage I get x% of my collections and DME is included in that. So whatever profit from the DME I dispensed I get the same percent of that as I do for collections.

For example: Insurance payment for cam boot minus cost of cam boot that office paid for it, then my % from that.


Most profitable? Cam boots and custom orthotics

See, this is the dumbest thing ever. Classic podiatry. Common, oh yes... dumb, quite.

CAM boot pneumatic costs 35-80 usually... reimburses 150-225+.

Would that place have dispensed and billed the CAM boot without you? (rhetorical)
The item cost is part of the overhead there (also MA stocking, mgr ordering, MA fitting pt, occasional replace/defective). That is why you don't get 100% (on anything).

So, why don't you get your normal 30-40% of it just like everything? The overhead on CAM boot is not even 50% in any office.
It should be the typical split of 50% overhead (will be less on CAM), 10-20% for owner, 30-40% for associate.
So, why the % of net... not % of gross like anything else? Makes no sense. (answer = "because podiatry")

...fyi, not meant as a knock, just nonsensical. That is done in many podiatry PPs, though. Use it as motivation to save up and GTFO one day. Envision a $20 bill going in their pocket and not your own for every CAM boot.

 

[Feli]

...Which type of DME do you think is the most profitable for the private practice? If you work alone, do you use specific company to buy in bulk?

They are all profitable. The common ones are CAM boot, ankle brae, night splint (insurance typically)... and surgical shoe and orthotics (cash svcs).b

OTC can be whatever you want... arch supports, pretty much whatever.

You can use Henry Schein, McKesson, ChicagoMedSupply, AliMed, amazon, DocShopPro, and many many many others.
Different ones are cheaper for different items. Don't accept sticker price and ask them what they can do.

I use ProLab for orthotics... many are cheaper, but I don't think any would say they are better.

 

[Adam Smasher]

Unpopular opinion:

You bill DME, therefore your % is calculated off of net profit from the device, not merely what the device generates. Consider a skin sub that might cost $800 and only generate $1000. Before you dogpile on me about this, this was discussed on an ACFAS podcast a few years back about associate salary structures. Without naming names, I shadowed a doc in a multi-office practice where all the docs had their assistants fill out "clawback forms" to track who was dispensing what and the billing dept deducted the cost of the item from their collections when calculating their take. If you enter into partnership and have a production based splitting of the pie, this calculation will matter as well so none of the partners have inflated production numbers, so it's not just about abusing associates.

For most items, however, this is a really cumbersome calculation without a billing dept to do it for you and with the aforementioned 600% margin on some of these things (ankle braces, night splints, boots, etc) you might as well not bother and calculate it off of what the device generates.

The item cost is part of the overhead there

By definition, "overhead" denotes those business costs that do not increase with output. With increased patient volume, there will be increased inventory turnover, and so unles you have a short time horizon DME costs are clearly not overhead, they are operating expenses, as they will vary with patient volume.

 

[Feli]

Unpopular opinion:

You bill DME, therefore your % is calculated off of net profit from the device, not merely what the device generates. ....

It's ultimately up to any practice to do what they like. They can be as greedy or fair with associates (or other staff) as they choose. It applies to all employees and all services.... even OTC.

We all know a CAM boot can be bought ($40), stocked ($2), MA labor to fit ($3), billed ($10), probably even a replace for defective air bladder at post op visit 4 ($40)... still not even at 50% of what it'll reimburse. I would say the replace/refund on those is maybe 5%, but we'll make the overhead/cost/expense semantics as big as possible. So, if it's like anything else with overhead ~50%, why not pay the associate their contracted % of gross collect? I don't get it. Never will. It's greed... it's podiatry... it's "tradition"? Many a PP owner or mgr will make sure to grab that extra $15 or $20 from an associate with huge debt. 🙂

Are we going to reimburse them for their % on E&M codes minus the cost of scalpel blades and prorated sharpening nippers and met pad and prorated Dremel battery usage and autoclave eventual replace? Wound debride code net the cost of bandaging and silvadene dollop? Of course not.

I think these net collect on certain common stuff (DME, wraps, injects) are the signs of a miserly and antiquated owner associate contract. They are not a deal-breaker for interview associates, but they're a red flag... associate should absolutely nix any partnership or buyout potential stated or perceived with a bean counter owner like that. Those clauses should be called out and discarded if possible (probably doable in single associate office, unlikely in med/large group, mill, supergroup, etc). The owners should be focused on growing and flourishing, not nickel and diming their own associate. And sure, they could always just lie about gross collections anyways (and typically do), but trying fancy accounting right up front to grind down the collections that the associate gets % from is such classic TFP stuff. Perhaps it's to create the illusion of a higher % collections, perhaps it was once done to the owner, or who knows? It will continue to happen because DPMs let it happen, especially in saturated metros. You really don't see it in MD contracts, though. If you told an ortho or ER they'd get 40% of each ankle brace $90 reimburse minus $20 cost, so 40% of $50 - or that you downgraded their Rvu 25% for DME overhead... they'd promptly and definitely tell you to ______ ______.

...Comparing skin sub craziness net/gross to predictable and common DME is apples to oranges... not even really worth addressing. That obviously needs some adjust, but again, owner can rip them off or make it pretty fair. The bigger question on those is if it's ethical to use stuff with no good EBM just because it pays well. 👍