Hearing Loss Regulations Facilitated discussion 4 November 2013

Recap Facilitated session on 26 August 2013 ACC summarised key points raised Looked at next steps ACC requested and received further suggestions for improving the Hearing Loss Regulations ACC said they’d consider the suggestions raised Note: this information/discussion is confidential until the Minister agrees to progressing further change

Today’s programme 9.00 Brief introductions, Recap of previous session (Grant) Purpose of today’s facilitated discussion 9.05 Action on items from previous discussion (Karen) Brief questions 9.10 Hearing loss regulation change (Karen) - Boundaries for change - Defining the key problem. Uptake of approvals - Minister’s concerns - Objectives for proposed changes - Timeframe for change (Bronwyn from MBIE) - Proposed options for Fitting Fee (Anne) Discussion Options for device contributions (Anne) - Discussion on options (Karen) (Morning tea break) - Repairs (Anne) Other options submitted (Karen) - New Process for Hearing Loss - Bulk Purchase of Hearing Aids Next steps, Roles and Responsibilities (Bronwyn)

Purpose of today’s meeting ACC to provide feedback on: immediate action on key matters raised on 26 August 2013 options for Regulation change raised on 26 August and by submission later other proposals raised. To discuss which options should be put forward to the Minister for her agreement to proceed further with these options

ACC’s immediate action on key matters raised 26 August Policy work is underway to determine if children should be managed outside the Regulations (due February 2014) Unilateral hearing loss – ACC recognises that specific devices are required for people with covered profound unilateral loss. ACC will consider a policy for managing this outside the Regulations (on the Policy work programme) Information sheets and letters are being updated – ACC has sent out information sheets to the sector for input

Hearing Loss Regulation Change

Boundary for regulatory change The 6% legislative threshold is not being reconsidered under this piece of work. “ACC should pay entitlements only for the injury- related proportion of the client’s total hearing loss” (Cabinet decision 2009)

What is the key problem? Why? ACC’s contribution was reduced in 2011 to contribute to only the injury-related hearing loss The retail price some audiologists quote or charge is high Some clients are not offered a range of hearing aid options, including those in the lower price ranges ACC’s survey shows that because of a high co-payment some clients: delay or do not purchase an aid ohearing injury needs unmet oincreases dissatisfaction with ACC purchase an aid but are not satisfied with ACC’s assistance. Many clients are quoted or charged a high co-payment for hearing loss services and devices.

Uptake of aid approvals 20% of clients are not accessing their entitlements when approved (2011 and 2012) Clients in bands 2 to 5 are more likely to delay or not proceed with purchasing hearing aids BandDelay or not purchase 217% 323% 419% 513% 1, 6-10Less than 8%

Minister’s concern… …is the large client co-payment. If ACC contributions are increased, the additional money needs to benefit the client

Objectives for proposed changes Client access improve client access to hearing loss entitlements (with a lower co-payment) Client satisfaction improve client satisfaction with ACC’s assistance (increased contribution lowers the co-payment) Financial equity costs are shared as fairly as possible across all stakeholders (ACC/employers, the Ministry, clients) - increases are moderate to have a low or no impact on the employer levy

Objectives con’t Transparency Provide transparency for clients around ACC contributions and for audiologists’ fees Timeliness Ability to implement changes in a timely way, ideally by 1 July 2014

Timeframe for change End Nov to mid Dec 2013: Targeted consultation Jan to April 2014: Cabinet processes Gazetting: mid May Amended Regulations in force: 1 July 2014

Proposed options for fitting fee Current band 10 plus the 1.78% inflation increase recently consulted on Includes $100 for a hearing needs assessment Would apply to all device options being proposed OR Option 1: Flat fitting fee: $1,220 for 2 aids $916 for 1 aid “Would like the fitting fee to be a flat fee”

Flat fee at current band 10 rate but separates out the needs assessment portion Would apply to all device options being proposed Proposed options for fitting fee Option 2: Flat fitting fee and quote for services: $1,120 fitting fee for 2 devices/$816 for 1 device $100 quote for services Limit of 2 quotes every 6 years “Separate contribution required for a hearing needs assessment”

Discussion on fitting fee options Flat fitting fee - monaural Flat fitting fee - binaural Quote for services Option 1$916$1,220$0 Option 2$816$1,120$100 Limit of 2 quotes every 6 years

Proposed options for device contributions The options are assessed against whether or not they meet the objectives for Regulation change Options Option 15 bandsACC – another option to consider Option 23 bandsNZAS option Option 34 bandsOriginal option consulted on before Regulations were introduced in 2010 Option 4Hearing needsOption raised at Aug meeting

Option 1: 5 bands Per device, Payable once every six years Band CoveredNew rateMoH ($) exTotal device 10.1 – – – , – 79.91,221891, ,5270 Key points: Timely implementation, a 15% to 18% increase in uptake is likely to cost an additional $17.8 to 19.9 million per year Note: All numbers in slides are indicative only hearing loss as proportion of total with 1.78% incr ($) GST contribution ($) ex GST

Option 2: 3 bands Per device, Payable once every six years BandCovered hearingNew rateMoH ($)Total device 10.1 – – , – 1001,5270 Key points: Timely implementation, a 15% to 18% increase in uptake is likely to cost an additional $19.5 to $21.7 million per year loss as proportion of total with 1.78% incr ($) contribution ($) ex GST

Option 3: 4 bands Per device, Payable once every six years BandCovered hearingCost ($) ExMoH ($)Total device 10.1 – – – 74.91,221891, – 1001,5270 Key point: Not possible to implement in timeframe, a 15% to 18% increase is likely to cost an additional $19.2 to $21.3 million per year loss as proportion of total GST contribution ($)

Option 4: Hearing needs model Per device, payable once every six years NeedBandCoveredCost ($)MoH ($)Total device Low10.0 – – Medium10.0 – , – 59.91, , ,2000 High10.0 – 29.91, , – 59.91, , ,8000 Key points: Unable to implement in timeframe, reduces access for 9% of clients, highest cost hearing loss as a proportion of total contribution ($)

Estimated cost of options Cost for 2013/14: Tracking to reach about $20m Cost for 2014/15: Estimated between $30-$35m (includes inflationary increase) Additional cost to status quo: Fitting fee and devices 15% to 18% increase in uptake Option 1 Option 2Option 3Option 4 $ mill/year $ $21.7 mill/year $19.2- $21.3 mill/year $23.9- $26.2 mill/year Costs will be higher if the uptake is greater

ObjectivesOption 1 5 bands Option 2 3 bands Option 3 4 bands Option 4 Needs based Increase access Best  9% 91% Increase satisfaction MaybeMore likely  9% 91% Transparency Simplest Complex Financial equity Costs shift more to employers Largest cost shift to employers, especially for high needs clients Timely to implement  Discussion on device contribution options

Morning tea break

Repairs Issues Flexibility Meet binaural repair needs ie per aid instead of per client once every two years Due to the complexity of system changes this may not be possible

Repairs continued Ear moulds Introduce a rate for ear moulds $33.90 ex GST Introduce an impression/fitting service $46.96 ex GST Total $80.86 ex GST Payable one year after a fitting where ACC contributes to the cost of that fitting May not be possible to implement in the timeframe.

Other options submitted New process for managing hearing loss claims Bulk purchasing of hearing aids

New process for hearing loss Process raised by NZHIA Audiologist lodges claim (removes GP) Audiologist determines total hearing loss and injury-related proportion (removes ENT) Introduces random audit by an ENT panel Likely to require a contract to give terms and conditions for audiologists Discussion

Analysis against objectives Legally compliant  Would require a legislative change Fit with audiologist scope of practice  Determination of causation is not part of the scope of practice? Increase client access ? No detail on how contributions are allocated Increase client satisfaction Likely – quicker process Cost/employer levy impact ? Lower administration costs but contribution allocation to client is unknown Timely implementation  Transparency for clients  Contract removes transparency

Bulk purchasing of hearing aids Points raised by NZSOHNS: ACC a large purchaser of hearing aids Could arrange bulk purchasing of aids Could use PHARMAC model Outcome desired: hearing aids at more affordable prices for clients Discussion

Analysis of bulk purchasing Better client access Likely Increased client satisfaction Likely Financial equity Would need to work with cost sharing with MoH and ACC Timely implementation  Transparency for clients ?

Next steps ACC will finalise options for the Minister Minister’s decision required on proceeding further MBIE consultation with relevant stakeholders Minister briefed on consultation – ACC makes a recommendation Minister makes recommendation to Cabinet Cabinet decision process Gazette notice Implementation

Roles and responsibilities ACC provide joint briefing with MBIE to the Minister conduct analysis implement any agreed changes by 1 July 2014 MBIE consult with stakeholders conduct analysis manage the Cabinet process Sector provide feedback during consultation process within a short timeframe enable implementation of any final changes from audiology side