Reporter's notebook: Loyal customers, the ABN and creativity

Suppose you were an HME provider supplying a Medicare beneficiary with oxygen therapy through a competitive bidding contract. Suppose the beneficiary also needs non-prescription items like a hospital bed, mattress and other HME for which you don't have contracts.

Suppose the beneficiary and his or her children want to continue doing business with you, even though you don't have the contracts. What are your options?

“You can't sell the equipment to the patient, so we sell the equipment to the daughter or son,” said Tom Inman, president of Virginia Home Medical in Newport News, Va. “They can put a bow on the foot of the bed and call it a present. They're as happy as can be.”

While industry consultants concede this is a gray area—there are “a ton of different cash arrangements out there,” said one—they recommend providers always get an advance beneficiary notice (ABN).

“When you have knowledge that a piece of equipment is subject to insurance, you're required to get an ABN,” said Andrea Stark, a reimbursement consultant with MiraVisa. “That protocol is in place to protect the beneficiary and the family, and to make sure everyone knows how the transaction will be treated.”

Here's one reason why that's necessary: It's not uncommon, for example, for the children of a beneficiary not to be on the same page, turning a simple transaction into a complicated one, says Sylvia Toscano, owner of Professional Medical Administrators.

“What we see a lot is that one of the kids will make an arrangement and then another will get involved later on and say, 'That's a Medicare-covered item; I don't know why you took our money,'” she said. “If they go to Medicare, it becomes our word against theirs and refund requirements could come into play.”

This is almost a nice problem to have, says Rob Baumhover, director of retail programs for The VGM Group.

“The nice thing is that it means you've built that relationship with the children, and they're the ones that want mom and dad to be taken care of by you,” he said. “Then, when the time comes for them to need your services, they'll stick with you, too.”

Inman says he's comfortable selling non-prescription equipment to the children of his patients without an ABN.

“If you have an ABN, you're admitting that the Medicare patient is your customer,” he said. “They're not my customer; I'm not getting anything from them. I'm selling for cash to the public.”

Inman says Medicare is making it so hard to get equipment that many families with loved ones in need are saying, “Screw it.”

“You have to be creative,” he said.