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 CodesMedicaidMedicareCommercial 92506 (Diagnostic & Service Evaluation) $59.98$131.88 (45%) $114.66 (52%) 92507 (Treatment) $39.16$62.53 (63%) $81.42 (48%) 92579 (VRA) $19.66$29.94 (66%) $39.96 (49%)

13. Comparison of Medicaid to Medicare and Commercial Fees CodesMedicaidMedicareCommercial 92585 (Comprehensive auditory evoked potentials) $90.76$103.46 (88%) $150.40 (60%) 92588 (EOE, Comprehension) $61.48$80.72 (76%) $82.46 (75%) 92599 (Aural rehabilitation) $81.63$138.33 (59%) $112.45 (73%)

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 Medicaids 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: 1) Methods & payment procedures should be consistent with efficiency, economy, & quality. 2) 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. 3) 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 states 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