What Agents Should Know About How Medicare Covers Ostomy Products

It's estimated that anywhere between 750,000 to 1 million people have ostomies in the United States, a surgical procedure used to treat diseases of the digestive or urinary systems that creates an opening on the abdomen called a stoma.

The stoma connects from one organ to the outside of the body and can either be permanent or temporary depending on a patient's condition. These individuals rely on durable medical equipment (DME) to collect bodily waste from all ostomy procedures, making access to ostomy supplies extremely important.

Yet, it's increasingly difficult for patients to get the supplies they need because the margins on ostomy products are low and are extremely complicated. Most providers will not accept assignments, which would mean the patient would have to pay upfront and bill Medicare themselves or shop around where their provider choices are extremely limited.

In the event they can get a provider with a product, most likely they will be unable to give the patient the exact product they need due to low margins. Instead providers will push them to a different product that does not meet their highly individualized need, which may cause complications.

This issue expands beyond Medicare because Medicare Advantage plans typically reimburse a percentage of Medicare. Sometimes members will switch to a Medicare Advantage plan unaware of these challenges and are left without the product/provider who is able to get them the supplies they need.

What Does Medicare Cover?

Medicare typically will provide coverage for prosthetic devices, a category that ostomy supplies fall under but will only be covered for specific procedures including a urinary ostomy, ileostomy surgery or a colostomy.

Medicare Part B, which is considered the medical portion of Original Medicare and includes coverage for services that are preventative, covers 80% of charges for ostomy supplies. It is required for beneficiaries to pay the Part B deductible first unless they have additional coverage.

Although Medicare covers 80% of charges for ostomy supplies, most are not aware that they must sign up for Medicare Part B insurance when they first become eligible and could end up being deterred because of additional premiums that are due. With ostomy supplies ranging from $300 to $600, these premiums aren't cheap.

What Is the Medicare Limit on Ostomy Supplies?

With a prescription from a doctor and a supplier that is contracted with Medicare, Medicare will cover up to a three-month supply of ostomy products at a time. However, Medicare does not cover everything and under Medicare Part A, which is hospital coverage, so many are left with deductibles and other cost-sharing.

If someone's work history does not include paying Medicare taxes, they could be left with a heavy premium to pay. Under Part B, patients are required to pay the remaining 20% of their medical costs as well as deductibles.

How Do You Get Supplemental Medicare Coverage for Ostomy Supplies?

Medicare does offer ways for patients to receive supplemental coverage for their ostomy supplies. One way is through the Medicare Advantage plan, which must cover at least as much as the Original Medicare plan.

Through the Medicare advantage plan, full coverage is not guaranteed because the amount covered is ultimately up to the insurance agency. For example, while Part B might cover 80% of a patient's ostomy supplies, the advantage plan might end up covering less than that, leaving patients to pay a higher deductible than they can afford.

However, if patients decide they want to return to Original Medicare within 12 months of joining due to Medicare Advantage plan copays being too high, and it's their first time joining, they have special rights under the federal law to purchase a Medigap policy.

While most health insurance plans do cover ostomy supplies, the ways they are covered varies between Medicaid plans. The reality is, most patients are not offered coverage for a full range of product options that fit their needs, which can leave many paying high out of network fees.

On top of this, ostomy patients are not offered the proper clinical education to fully prepare themselves to pick their coverage option for the first time.

As insurance agents, it's important to know the different coverage options available to ostomy patients and what challenges those in need of these supplies face when navigating the best insurance plans for them.

Those who do take the time to understand the common supply problems within this particular DME, will enhance the success of patients receiving the supplies they need.

Mica Phillips is a director at Aeroflow Urology.