MEDICAID REIMBURSEMENT OF HEARING SERVICES Peggy McManus, Ruti Levtov Karl White, Irene Forsman, Terry Foust July 2005

Methodology 15 state survey, conducted by MCH Policy Research Center, January – March 2005 Examined FFS policies for a comprehensive set of hearing services Obtained 2005 fees and compared them to 2000 fees collected by MCHPRC in previous study

Research Questions 1. Do states have reimbursable codes for a comprehensive set of hearing services? 2. What are average payment amounts, range of payments, & fee distribution in 2005? 3. What changes in reimbursement have states made since 2000? 4. How do state Medicaid fees compare to Medicare fees?

Overall Findings 1. State Medicaid agencies have billable codes for a broad array of hearing services 2. Wide variation exists in FFS payments for each of the hearing services examined 3. Since 2000, Medicaid fees for more than half of the hearing services examined declined 4. Medicaid fees are low, well below Medicare fees

Fees for Selected Hearing Services (Tables 1,2, & 3) Diagnostic & evaluation services (92506) In 2005, 13 of 15 states had a billable code for this service (MD & ME had no code) Average rate = $59.98; low of $12.10 (VT) to high of $ in (WY; vast majority paid in low to middle fee distribution Since 2000, fees for this service are on average 32% higher than in same states in 2000

More Medicaid Fees Audiologic treatment services (92507) Same 2 states had no billable code for this service Lower fees than for 92506: $39.16 on average, low of $10.38 and high of $69.03 Fees increased, on average, by 21% Variation in fees may be due to length of visit, which is not distinguished in CPT codes

Medicaid Fees for Audiologic Function Tests Almost all states had billable costs for each of the 15 tests Fees vary significantly by test (Table 1) Fee distribution shows no consistent pattern Since 2000, almost all of the fees declined

Medicaid Fees for Hearing Aid Services Billable codes for hearing aids are much more variable than for tests & evaluation & treatment services, esp. for digitally programmable hearing aids States more likely to use manual pricing or bundled payments for hearing aid services Range of payments is dramatic Fees for half of the hearing aid codes that existed in 2000 actually declined since 2000

Medicaid Fees for Cochlear Implant Services Most of these codes new since 2000; states often manually price these services or fold them into hospital payments Several states limit their billable codes for cochlear implant services In the 4 states with a billable code for cochlear devices, fees average $15,248, but ranged from $14,074 to $17,127 Initial cochlear implant fees increased by 8% since 2000, but replacements decreased by almost 7%

Medicaid Fees for Assistive Communication Services 3 of 15 states have reimbursable codes for adaptive hearing devices State covering this service have manual pricing policies

Comparing Medicaid & Medicare Fees (Table 4) Overall, Medicaid fees are 69% of Medicare fees Medicaid fees as a percent of Medicare fees vary by service, with a low of 40% for pure tone audiometry (air & bone) and a high of 89% for auditory evoked potentials for evoked response audiometry

Policy Implications Although most states have billable codes for a broad array of hearing services, it is unclear whether states without billable codes for specific hearing services are using EPSDT Variation is state Medicaid fees are not accounted for by urban/rural state or per capita income

Policy Implications To arrive at more consistent payment policies, states may want to adopt fees that are some proportion of Medicare fees Low Medicaid payment levels are likely to adversely affect access to audiology services and also participation of audiologists

Policy Implications (cont.) Despite difficult financial times, it is important for State Medicaid agencies, audiologists, and EHDI officials to work together to phase-in improvements in reimbursement to assure that low income children have access to needed hearing services