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Why Patients and Doctors are Struggling with Meter Reimbursement

By David Mendosa

Last Modified On: April 28, 2006

Blood glucose meters have become too much of a good thing. Nobody can keep track of them. My directory at mendosa.com/meters is the most comprehensive, and I think that there are currently 50 different meters from 15 different vendors on the American market.

It’s not just the plethora of meters. It’s also the complexity of managed care and Medicare insurance.

“Most physicians and endos  —  including myself  —  do not know the characteristics of every meter,” says Arturo Rolla, M.D., who is on the staff of Beth Israel Deaconess Medical Center in Boston and assistant professor of medicine at Harvard Medical School. “Since meters are the road map to diabetes control, patients and doctors both need to have a continuously updated guide of all the different meters.”

But health care professionals also need to know which health plans cover which meters. This is an even bigger challenge.

Manufacturers like Abbott realize the reimbursement landscape is complex, says Tama Antonia Donaldson, director of public affairs and communications for Abbott Diabetes Care. She says that’s why blood glucose manufacturers provide customer service staff that are specially trained to handle reimbursement questions from patients and medical professionals alike.

Health care professionals need to help their patients with their reimbursement concerns, Ms. Donaldson says. Consequently, “endocrinologists, Certified Diabetes Educators, and other clinicians will need to continue to stay abreast of coverage options, such as formulary status for many different meters.”

The big problem with insurance is with the managed care plans, says Dave Detmers, director of communications and public affairs for LifeScan. The number of meters on the market doesn’t matter for Medicare reimbursement, he says, because they are all reimbursed at the same rate.

“Where the proliferation of products can become an issue is with managed care plans,” Mr. Detmers says. “Physicians have to know which products are on formulary for a particular patient’s health plan and the co-pay for each. Most health plans have one or two preferred products or product lines on formulary.”

This usually means that these preferred products have the lowest patient co-pay. While physicians can recommend any product, he notes, they might not be on the formulary. And if they are on the formulary, but are not a preferred product, they could have a higher co-pay for the meter or test strips or both. The result would be that recommending a product without knowing the patient’s particular plan could potentially have a higher than necessary out-of-pocket expense for the patient.

Joseph Prendergast, M.D., an endocrinologist in Redwood City, California, certainly agrees. His book, The Uncommon Doctor: Dr. Joe’s Rx for Managing Your Health, has just been published.

“Insurance companies are assigning my patients old, slow, ugly meters that don’t work well,” he tells me. “They are cheap meters  —  not just inexpensive meters.”

William C. (Reddy) Biggs, M.D., an endocrinologist practicing in Amarillo, Texas, notes that his state has a law mandating insurance coverage for meters and strips. In this respect it is like 46 states and the District of Columbia. Only Alabama, Idaho, North Dakota, and Ohio currently fail to require state regulated health insurance plans to cover the basic diabetes care, although challenges to this coverage have been mounted recently in more than 20 states.

“However, the state mandated insurance coverage doesn’t mean that all companies’ meter products must be covered,” Dr. Biggs adds. “Many of the major insurance carriers are signing contracts with meter companies to be the ‘preferred’ meters for those companies. Typically, they sign up two of the companies, so the patient will have some choice of meter.”

Some of the biggest problems come when insurance carriers change their preferences. “Some plans do allow for a medical review, if we can demonstrate a valid reason why they should cover a specific brand not on their formulary,” Dr. Biggs says.

“Many users resent having a new meter imposed on them,” Dr. Biggs says. “They have grown comfortable using it, and have some confidence in its results.”

When the patient asks for advice, it can lead to problems not only for the patient but also for the physician and Certified Diabetes Educator. Patients can be miffed when they can’t get advice on what their specific plan covers.

For Medicare reimbursement the issue isn’t the number of meters on the market. Rather the problem is that Medicare reimburses for all strips at the same rate, Dr. Biggs says.

“So if the Medicare diabetes supplier can switch the patient to an off brand, its profit margin can more than double,” he explains. “Even though we try to prevent such substitution when we sign off on the Medicare vendor’s authorization form, many of them still try to switch the patient to the inferior meters without asking the doctor or the patient first.”

But it is not only reimbursement issues that plague health care professionals. New meter manufacturers have a hard time breaking in to this crowded market, says Tim Cady, president of Advanced Diabetes Supply, a division of North Coast Medical Supply in San Diego.

Mr. Cady says that many of the new meter companies have a difficult time becoming a preferred meter with pharmacy benefit managers. These PBM’s are large independent companies, like Caremark, Medco, and Express Scripts, that contract directly with insurance companies to manage all of their prescription benefits.

“The PBM’s will limit the ability of the new meter companies to sell their products,” Mr. Cady says. “When TheraSense first introduced its meter, they were locked out of the PBM markets and instead went to mail order companies like mine to sell their products.”

If these issues sound bad, think ahead and think of the uninsured.

“The bigger reimbursement issues down the road are going to arise when companies start to introduce sensor technology into the consumer marketplace,” Mr. Cady notes.

Also consider the uninsured. At least 15 percent of Americans have no health insurance, according to a recent Census Bureau report. For them life is simpler  —  just buy the least expensive meters and strips or do without. 


This article originally appeared in Diabetes Health Professional, Spring 2006, pp. 32-33..


    David Mendosa is a freelance journalist and consultant specializing in diabetes and lives in Boulder, Colorado. When he was diagnosed with type 2 diabetes in February 1994, he began to write entirely about that condition. His articles and columns have appeared in many of the major diabetes magazines and websites. His own website, David Mendosa’s Diabetes Directory, established in 1995, was one of the first and is now one of the largest with that focus. Every month he also publishes an online newsletter called “Diabetes Update.” Twice weekly he writes for his blog at http://blogs.healthcentral.com/diabetes/david-mendosa. He is a co-author of What Makes My Blood Glucose Go Up...And Down? (New York: Marlowe & Co., August 2003).

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