The Ostomy Files: Expanding Practice to Demystify Patient Costs for Ostomy Supplies

  Thomas Gregg, a 65-year-old Medicare beneficiary and longtime patient, calls. "My pouch has been leaking a lot and the wafer only lasts 1 or 2 days," he says. He is upset that the leakage has become so frequent that it is interfering with his daily life, causing him to miss work and lose income. You recall that Mr. Gregg had his ileostomy as a young man, secondary to ulcerative colitis. He had adjusted well to his stoma and although he is now semi-retired, he remains quite active, volunteering for several community organizations, playing golf twice a week, and working part time in a lesser role at the consulting company he started 20 years ago.

  You check your records. Mr. Gregg was last assessed 3 years ago and a two-piece drainable pouching system with a standard skin barrier (SUR-FIT Natura Stomahesive Wafer and SUR-FIT Natura Drainable Pouch, ConvaTec, Princeton, NJ) and a skin barrier paste (Stomahesive, Paste, ConvaTec, Princeton, NJ) had been recommended. At the time, he reported achieving a predictable 3-day wear-time, and he was purchasing his ostomy supplies from a local ostomy retailer. You schedule an appointment to see him the following week.

  At the appointment, you quickly see that Mr. Gregg's recent 10-pound weight gain has produced skin folds and creases in the peristomal area. You recommend he continue to use a two-piece system, but shift to an extended-wear body-side wafer with flange and integral convexity (SUR-FIT Natura Durahesive Wafer with CONVEX-IT ConvaTec, Princeton, NJ) and eliminate the skin barrier paste. Mr. Gregg seems upset by the increased cost of the "new" wafer compared to the standard wafer with flange he currently uses. He says he cannot afford the new wafer because he is already paying a little more than $1,300 a year for his ostomy supplies and nearly $3,000 a year for his prescription medications. You give him a sample of the extended-wear wafer with flange and ask him to give it a try. Two weeks pass and you receive an enthusiastic voice mail from Mr. Gregg, telling you he is very pleased with the wafer and that he has been able to wear it leak-free for 6 days. However, you note a change in his voice when he sheepishly expresses concern about its price.

  His feedback makes you wonder about the $1,300 annual ostomy supply cost Mr. Gregg quoted. From past experience, you know other patients are not paying that much. Reaching for a retail catalogue, you begin your analysis of what Mr. Gregg is paying for his ostomy supplies.

Retail Price - Out-of-pocket Cost
  A 3-day wear time means that Mr. Gregg changes his pouching systems about 122 times a year; a 6-day wear time means 61 changes per year. You find the retail catalogue price for each of his products and multiply it by the number of changes per year to arrive at his annual retail costs. You are surprised to see that the retail price of Mr. Gregg's previous pouching system is a little more than $1,300. Even more surprising, you find the annual retail cost for the more "expensive" convex pouching system is actually $506.30 less than his previous pouching system. Eliminating skin barrier paste and the doubling of his wear time compensate for the increased product price.

  But wait! Is Mr. Gregg actually paying retail prices for his ostomy supplies? What about Medicare? It must be paying something. Each generic category of medical supply under Medicare Part B is assigned a HCPCS code and a per-unit fee schedule amount. The fee schedule amount is the maximum Medicare will pay for a particular supply. However, the patient (ie, beneficiary) has a financial responsibility for a portion of this amount in the form of a $100 annual deductible, plus 20% of the Medicare fee schedule amount. Once these obligations have been met, the remainder (80% of the fee schedule amount) becomes the actual Medicare benefit paid to the beneficiary for the supply. A comparison of Mr. Gregg's old and new convex management systems shows annual savings of $390.12 in Medicare benefits.

  Mr. Gregg's ostomy retailer no longer accepts assignment on Medicare claims for ostomy supplies because the Medicare fee schedule amounts are low or even below his cost, and he is not reimbursed for the hidden costs of submitting and processing Medicare claims.¹ Therefore, Mr. Gregg's retailer processes what is called an "unassigned" claim. Under this arrangement, at the time of purchase, Mr. Gregg is required to pay the difference between the dealer's retail price and 80% of the Medicare fee schedule amount. If Mr. Gregg's dealer were to accept an assigned claim, Mr. Gregg would only have to make a 20% copayment. These costs are Mr. Gregg's actual out-of-pocket expenses.

  Patients like Mr. Gregg should be educated to ignore the retail price of a product as a guide to understanding cost and to learn how the product is covered and paid by his insurer. Regardless of whether his retailer accepts assignment, Mr. Gregg will have less out-of-pocket expense for the convex pouching than his previous management system. However, his out-of-pocket expenses for the new products are considerably higher for a nonassigned claim than for an assigned claim.

Calculating Annual Out-of-Pocket Expenses
  What do all these numbers really mean to Mr. Gregg? The amount of cash he has to pay each year for his supplies is dependent on many factors including wear time and whether or not his supplier accepts assignment for his Medicare claim.

  As Mr. Gregg's case demonstrates, cost-effective ostomy care means more than just the unit cost of a particular product.² Mr. Gregg's previous pouching system became clinically ineffective as his anatomical topography changed and caused leakage. The situation diminished the overall quality of his life and his ability to earn a living. If he had not sought professional help when the problems first occurred, his consumption and costs for his no-longer-effective "cheaper" supplies would have risen, as would the risk of his developing serious peristomal skin problems. Each complication carries the potential for increased consumption of additional healthcare resources - prescription medications, physician and emergency room visits, home healthcare, social and mental health services, and the like. Add to this the loss of income and the financial ramifications to the healthcare system and the individual patient become immense.

  Reducing overall out-of-pocket costs for patients is possible, even when the use of more costly products does not result in a doubling of previous wear time. Today's new Medicare utilization guidelines make it possible and desirable for patients to use the most clinically appropriate and easy to manage product possible before experiencing an event that may be embarrassing or compromise the skin.

  Nurses in every clinical setting have an obligation to understand the payment mechanism for their patients- ostomy supplies across care settings, as well as the financial impact of those payment systems on the individual patient. Our role is not just to consider the cost of a product. When you recommend changes in products, those products must not only be clinically effective - they also must be financially reasonable for the individual. Ostomy products that increase wear time, reduce the number of home visits, promote independent care, or prevent costly peristomal skin problems, even if they are more expensive, may prove to be more cost effective if analyzed properly.

  Share this information with each of your ostomy patients to help them understand and calculate their individual annual financial responsibility for the cost of their ostomy supplies.

1. Turnbull GB. Ostomy supplies - out of balance. Ostomy/Wound Management. 2001;47(4):2-3. 

2. Bolton L, van Rijswijk L, Shaffer FA. Quality wound care equals cost-effective wound care. Nursing Management. 1996;27(7):32-37.