MEDICAID OPPORTUNITIES & CHALLENGES FOR IMPROVING REIMBURSEMENT OF AUDIOLOGICAL SERVICES

1. MEDICAID OPPORTUNITIES & CHALLENGES FOR IMPROVING REIMBURSEMENT OF AUDIOLOGICAL SERVICES Peggy McManus Maternal and Child Health Policy Research Center Washington, DC Mchpolicy.org February 2, 2006

2. Faculty Disclosure Information • In the past 12 months, I have not had a significant financial interest or other relationship with the manufacturer(s) of the product(s) of provider(s) of the service(s) that will be discussed in my presentation. • This presentation will not include discussion of pharmaceuticals or devices that have not been approved by the FDA or unapproved or “off-label” uses of pharmaceuticals or devices.

3. Presentation Overview • 2005 Medicaid reimbursement study • Billable codes and payment amounts for a comprehensive set of audiology-related codes • Changes since 2000 • Medicaid fees versus Medicare & commercial fees • Implications

4. 2005 Medicaid Reimbursement Study • Funded by Maternal and Child Health Bureau through NCHAM • Sample: 15 states from all 4 regions (ID, IL, IA, KY, ME, MD, MA, NM, ND, OH, OK, TX, VT, WA, & WY) • Excluded states relying exclusively on capitated managed care organizations

5. Survey Timing & Content • Email survey conducted between Jan-March 2005; prior mail survey between Nov. 2000 – Feb. 2001. • Examined coverage and fees for 65 audiology-related codes for diagnostic and treatment services, audiologic function tests, hearing aid services, and cochlear implant services.

6. Research Questions • Do state Medicaid agencies have billable codes for a comprehensive set of audiology services children? • What are states’ 2005 payment policies for these services? • What changes in reimbursement amounts have states made since 2000? • How do state Medicaid fees compare to Medicare and commercial fees?

7. Billable Codes for Specific Hearing Services • Audiologic diagnostic, evaluation & treatment services (2 codes): 2 of 15 states without billable codes • Audiologic function tests (15 codes): select picture audiometry & auditory evoked potentials for evoked response audiometry (2 states without billable codes) • Hearing aid services (29 codes): disposable ear molds (8 without billable codes); digital hearing aids & digitally programmable hearing aids (5 without billable codes) • Cochlear Implant Services (13 codes): cochlear implant system & cochlear implant replacement (4 without billable codes)

8. 2005 Medicaid Payment Amounts and Changes Since 2000 • Audiologic Diagnostic, Evaluation & Treatment Services • 92506 (Diagnostic & Evaluation): $59.98 (ranges - $12.10 - $127.42); 32% increase since 2000 • 92507 (Treatment): $39.16 (ranges - $10.38 - $69.03); 21% increase since 2000 • Wide range in payment likely due to visit duration (15, 30, or 60 min.)

9. Selected Audiologic Function Tests • All 15 tests use calibrated electronic equipment • 92557 (Comprehensive audiometry threshold): $36.86 (range $28.10 - $47.42); 2% decrease since 2000 • 92568 (Acoustic reflex testing): $11.21 (range $4.50 - $15.00); 1% decrease since 2000 • 92579 (Visual reinforcement audiometry): $19.66 (range $4.50 - $28.60); 5% decrease since 2000 • 92585 (Comprehensive auditory evoked potentials): $90.76 (range $45.11 - $140); 14% decrease since 2000 • 92587 (Limited evoked otoacoustic emersion): $45.05 (range $16.00-$59.01); 1% decrease since 2000

10. Selected Hearing Aid Services • 92591 (Hearing aid exam, binaural): $62.84 (range $36.24 -$165): change -4% since 2000 • 92595 (Electroacoustic evaluation):$49.03 (range $8.71 - $200); change – 35% • V5140 (Hearing aid binaural, BTE): $775.89 (range $400 - $960.68); change + 2.8% • V5253 (Hearing aid, digitally programmable, BTE): $1,022.85 (range: $400 - $1,987.24 (new since 2000)

11. Selected Cochlear Implant Services • Only 4 reporting states • L8614 (cochlear implant device): $15,248 since 2000 (range $14,074 - $17,127);+8% change • L8619 (cochlear implant replacement): $5,366.23 (range $41.95 - $7,352; -6.7% change

12. Comparison of Medicaid to Medicare and Commercial Fees

13. Comparison of Medicaid to Medicare and Commercial Fees

14. Comparison of Medicaid Fees to Medicare & Commercial Fees • For 21 selected audiology services, Medicaid fees are on average only 67% of Medicare fees and only 38% of commercial fees. • Study results being submitted to American Journal of Audiology.

15. Summary • States in our sample cover a broad range of audiologic diagnostic and evaluation tests, but some fail to have reimbursement codes for specific hearing tests, hearing aids, and cochlear implant services • These may be covered under Medicaid’s EPSDT benefit • Medicaid fees are low relative to Medicare and commercial fees– only 67% of Medicare fees and 38% or commercial fees

16. Summary • Significant variation in level of Medicaid reimbursement for most audiology services • Since 2000, fees for more than half of the audiology services examined actually declined • Although the study is limited to only a 15-state sample, it reveals a consistent pattern of inadequate payment levels for a broad set of hearing services important to children

17. Implications • Medicaid law related to payment rates: • Methods & payment procedures should be consistent with efficiency, economy, & quality. • Payments must be sufficient to enlist enough providers so that care is available to the extent that such care is available to the general population in a geographical area. • Providers must accept payment in full.

18. Implications • At issue is whether states have met their statutory requirement to assure sufficient payment. • Do children with hearing loss face greater difficulties than other children in accessing audiology-related care?

19. Policy Options • Several steps that state EHDI programs and other constituents may consider • Review your state Medicaid agencies’ list of billable audiology-related codes. • Determine which codes are excluded. • Communicate with state Medicaid agency about importance of reimbursing an up-to-date and comprehensive list of codes.

20. Policy Options • Determine what Medicaid pays for specific audiology-related codes. • Figure out when they were updated last. • Compare your state’s fees with the average fees

21. Policy Options • Consider ways to compare access differences between Medicaid and privately insured children with hearing loss • Work with state Medicaid officials to phase-in audiology rate increases to represent a higher proportion of Medicare or commercial fees • Making Medicaid fees comparable to Medicare or commercial fees would be ideal