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Thursday, September 3, 2009

"Private" Insurance companies are denying coverage for ostomy supplies

reason given is that medical supplies are not covered and ostomy supplies are medical supplies.

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 L 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!