For many audiology practices, dealing with private insurance and other third-party payers has long been more of a hassle than it's worth. Historically, few health insurance policies have covered hearing aids, but that is starting to change.
According to the American Speech–Language–Hearing Association, 20 states now have mandates for hearing aid coverage for children, and three of these states—Arkansas, New Hampshire, and Rhode Island—also require that health insurance plans provide hearing aid coverage for adults (see FastLinks). Medicare still does not reimburse for hearing aids, but Medicaid frequently covers them for adults and must cover them for children (see FastLinks).
This means that more and more hearing healthcare practices are dipping their toes into the insurance pool, which has more than a few water hazards and its fair share of sharks. The Hearing Journal talked with several leading experts on the third-party payment system to find out what the most common pitfalls are for hearing healthcare professionals entering the insurance world for the first time, and how to avoid them.
DO: READ THE CONTRACT
This piece of advice sounds painfully obvious, but every expert with whom HJ spoke agreed that, far too often, hearing healthcare professionals are so eager to sign on with a particular plan that they don't read the contract, reimbursement schedule, and other associated documents carefully enough.
“You might think, ‘I have to get this contract. A lot of my patients have this plan, so I have to be able to bill their insurance for hearing aids,’” said Mary Sue Fino-Szumski, PhD, MBA, assistant professor in the Department of Hearing and Speech Sciences at Vanderbilt University, who teaches business and financial management for hearing healthcare professionals.
“But it may well be that the reimbursement for each hearing aid that goes out the door isn't sufficient. If you don't put all the pieces together when you're in private practice, a few bad contracts can make up a large portion of your payer mix.”
All contracts that healthcare providers sign with insurance companies are not created equal, noted Kim Cavitt, AuD, owner of Chicago-based consulting firm Audiology Resources.
“No two contracts are the same,” she said. “They vary by payer, and they vary by state because contracts are filtered through the state Department of Insurance. Blue Cross contracts in California are very different from those in Minnesota.”
Before signing a contract, Dr. Cavitt recommends that hearing healthcare providers ask themselves these questions:
- What is the fee schedule? Does it address the services you provide? Will you have to take a large provider discount?
- With what products will you be participating (e.g., Medicare, Medicare Advantage, or commercial)?
- Can patients upgrade their hearing aids and pay the difference between the allowable rate and the providers’ usual and customary fee for more advanced technology? What's the patient's cost sharing?
- Can the healthcare provider carve out diagnostic services only and not provide hearing aids through this plan?
- What are the cancellation and renewal terms?
- Does the insurance company cover only items and services that are medically reasonable and necessary? How is that determined?
- How will the insurer notify the provider of subsequent changes to the agreement?
- What are the clinic-hour requirements?
- What are the claim-filing requirements? How many days from the date of service is the healthcare provider given to submit a claim?
While all of these questions are important, start with the fee schedule, Dr. Cavitt recommended. The fee schedule should be reviewed after providers have a thorough knowledge of what it costs them to deliver services. Only then will they know if the fee schedule is sufficient for meeting their needs to stay in practice and their goals for growth.
But that's just the beginning, she added. Little things like the claim-filing requirements can trip up a healthcare provider, Dr. Cavitt said.
“How many days from the date of service do you have to submit a claim? There are some contracts that specify as low as 30 days. On day 31, they don't have to pay you.
“Clinic-hour requirements are another issue. I've had all sorts of members who signed contracts originally designed for physicians that said they would be available 24-7. They never read them, but now they're obligated to this schedule.”
DO: TRY TO NEGOTIATE
It's easier for a big hospital or multispecialty group practice to negotiate with a big national health insurance company, of course. Still, it is possible for smaller audiology practices to successfully negotiate more favorable terms for themselves.
“To some extent, there's some negotiating power if you're a provider who's desirable to that particular plan,” Dr. Fino-Szumski said.
“For example, you can take a look at their actual fee schedule and decide what level of hearing aids you'd be able to provide under that contract. Maybe you can't do them all, but maybe you can do some.”
Also, don't rely too much on any one contract.
“As a general rule, it is recommended that no one payer represent greater than 15 to 20 percent of your total revenue, or an amount you cannot afford to lose overnight,” said Kathy Foltner, AuD, vice president of sales–hearing care at Sikka Software Corporation.
“Software applications exist that integrate with practice management software to help audiologists easily track payer detail.”
DON'T: ABSORB THE COST OF UPGRADES
A key issue with hearing aids is upgrades. Most insurance companies do not cover the full cost of top-of-the-line hearing aids; they may, for example, allow up to $1,000 in coverage per ear for a hearing aid every three years.
“We as audiologists want to help our patients as much as we can, so we present our patients with the highest quality options to address their hearing difficulties,” said Annette Burton, AuD, director of audiology for the Easter Seals Center for Better Hearing in Connecticut.
“Insurance doesn't typically pay for things such as premium-level technology when there is a lower level of technology available that will improve audibility. Premium technology doesn't meet their definition of medical necessity.”
When a patient's hearing aid benefit only reimburses for a certain amount, the provider doesn't have to absorb the difference.
“It is worth investigating if the insurance plan has a waiver to allow patients to share in the cost of upgrades to premium products when the basic benefit does not cover the cost,” Dr. Burton said.
DON'T: BE AFRAID TO WALK AWAY
“If you're not willing to walk away from a contract, then you have no negotiating position,” Dr. Cavitt said.
When negotiating with third-party payers, hearing healthcare providers also need to be willing to spend money to make money. Insurance contracts can mean very big business for a practice.
“Physicians have attorneys or consultant contracting specialists who work on this for them. Audiologists also need to be willing to spend some money to secure the best contracts for their practice and their patients.”
DON'T: SKIMP ON STAFFING
It's extremely difficult to manage third-party billing without having a staff person whose sole job it is to manage contracts, understand terms, and keep up with each patient's benefits, including deductibles, co-pays, coinsurance, and anything else that applies.
Insurance shouldn't be added on as just one more job for another office staff member, and a healthcare provider certainly doesn't have the time to develop sufficient expertise in the area.
That's true of any healthcare practice, but it may be particularly important when it comes to hearing technology.
“Health insurance companies may process thousands of claims a day, and only one or two of those may be a hearing aid claim,” Dr. Burton said.
“Because they deal so infrequently with hearing aids, most of those claims have to be manually adjusted.
“That means there's a lot of room for error and individual interpretations of coverage, which makes it all the more important that you have systems in place to understand each policy and what each patient has in terms of coverage, to record what's quoted, and to follow up in cases of discrepancy.”
A key task for the staff person in charge of third-party billing is verification of patients’ hearing aid benefits prior to their discussion with the provider about device options.
“Each patient's eligibility for hearing aid benefits, deductibles, and coinsurance must be checked before the patient comes in so you know what you can offer them and what will be their responsibility,” Dr. Cavitt said.
Whether a new staff member is hired or an existing employee reassigned to handle insurance issues, proper training is essential.
ASHA and the American Academy of Audiology (AAA) offer educational programs on third-party payments, coding, and billing. Dr. Cavitt holds boot camps through AudiologyOnline and Audiology Resources two or three times a year.
DO: UNDERSTAND BUNDLING VS UNBUNDLING
“Traditionally, audiologists have included all of their follow-up care in their total fee for the hearing aid, but that's not how most healthcare billing works,” Dr. Burton said.
Commercial payers and state Medicaid programs are set up to receive bills that itemize professional service fees separately from medical devices—an unbundled system.
Hearing healthcare providers will probably have to follow suit in order to participate with those plans. According to a survey conducted by the American Academy of Audiology, only 20 percent of audiology clinics unbundled in 2011; just a year later, 33 percent unbundled.
It's important to understand that the extended warranties and follow-up care that are considered good practice in audiology are rarely, if ever, part of the standard of coverage for third-party payers.
The AAA offers a guide to itemizing services that also includes links to other tools, such as a list of questions to ask a commercial payer and a superbill template that contains most of the procedure codes for the devices and services provided by hearing healthcare practices (see FastLinks).
There currently are no consistent, nationally assigned definitions for hearing aid procedure codes, so insurance managers will need to keep track of the varying interpretations that different insurers may have of which codes to use for which procedures.
DON'T: GIVE UP
The complexity of negotiating with third-party payers is enough to make many small audiology practices want to give up and stay fee-for-service only. But that's shortsighted, Dr. Cavitt said.
“Most clinics I'm dealing with now tell me that insurance is accounting for somewhere between 30 percent and 40 percent of their billing. You can be successful in insurance if you invest in education and processes and manpower, and you'll make up for whatever you spend. But if you don't do that, you'll probably lose money on every hearing aid you bill to a third party.”
Can a hearing healthcare practice survive as a boutique clinic that only accepts private-pay patients? In some parts of the country where there is little coverage for hearing aids, it's possible, Dr. Fino-Szumski said.
“Especially if you're a smaller practice, it can be more cost-effective to provide the patient with an itemized receipt that they can submit to their insurance company for reimbursement.”
But in areas where there is a high level of hearing aid coverage, if one provider doesn't take a patient's insurance, the provider down the street will.
“Most people with insurance look for providers who accept that insurance, so you're potentially losing patients just by not being on the approved provider list,” Dr. Foltner said.
“Either way, you have no choice but to understand the system and your practice—including the fees needed to break even and make a profit—to decide whether it benefits you to participate or not.”
- Access ASHA's information on state insurance mandates for hearing aids: bit.ly/ASHA-state.
- Read Medicare's policy on coverage for hearing healthcare services: bit.ly/Medicare-hearing.
- Review AAA's guide to itemizing services: bit.ly/AAA-Itemize.
- Browse the academy's audiology superbill template: bit.ly/AAA-Superbill.
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