Embed Size (px)
Citation preview
Hearing Aid Delivery and Pricing Models for a New Millennium
Presenter:
Kim Cavitt, AuD Audiology Resources, Inc. [email protected]
The views expressed in presentations made at International Hearing Society (IHS) educational events are those of the speaker and not necessarily of IHS. Presentations at IHS events, or the presence of a speaker at an IHS event, does not constitute an endorsement of the speaker's views.
From the desk of
our Attorney
Download the slides at www.ihsinfo.org/convention
Agenda
After this course, participants will be able to:
Describe the pros and cons of the different hearing aid pricing models
Define the differences between bundled and unbundled pricing
List what constitutes a current bundled hearing aid price
Pricing Strategies
Most pricing strategies I see in this industry are based on NOTHING.
You CANNOT be afraid to charge for your time and services.
Pricing Strategies
All prices should reflect: An understanding of your personal breakeven analysis.
An understanding of your third-party payer fee schedules.
An understanding of the prevailing rates in the area.
Breakeven Analysis
Breakeven analysis is what does your practice needs to bring in, per hour, per full-time equivalent revenue generating provider to cover your expenses (salary, overhead, calibration, fixed costs, benefits, annual fees, etc.). Hearing aid procurement costs are not here as they are variable.
You want to add a “profit” amount to this.
This is the minimum you can charge.
You base your fees for items and services where no fee schedule exists. Based upon the time required to complete the procedure.
Data You Need (at a minimum)
Number of patients seen
Dollars billed
Dollars collected
Number of hearing aid evaluations completed
Number of aids fit
Number of no charge visits
Number of hearing aid repairs In-house
Manufacturer
Breakeven Analysis and QuickBooks
Print a Quickbooks Expense Report for a 12 month period of time
Take a Black Sharpie and mark through any line item that accounts for goods that are sold (i.e. hearing aids, earmolds, ALDs)
Add up the remaining expenses (including salaries) from the Report
These are your expenses for the year
Breakeven Analysis and QuickBooks
Divide this amount by 12 This is the amount you need to breakeven per month
Divide this amount by the number of full-time equivalent, revenue generating providers
Divide this amount by the number of available hours your providers are available to see patients in an average month No one should see patients 40 hours a week
Third-Party fee Schedules
Be aware of the third-party fee schedule amounts.
You do not want to charge less than you could have collected.
Must have a standard fee schedule for all patients . If you charge one, you must charge all.
Prevailing Rates
Least important aspect, as you must charge what you need to cover your overhead and you do not want to charge less than you could have collected.
Pricing Hearing Aid Services
What is your breakeven plus profit amount?
How much time do you schedule for each hearing aid procedure?
What is the prevailing third-party reimbursement rate?
What is Bundling?
Billing all items and services associated with the evaluation, fitting, and
management of a hearing aid, as well as its related goods, under one code on the
date of fitting.
Why do the Majority of Practices Bundle Their Pricing?
Honestly, because that is how hearing aid pricing has always been
Why Bundle?
Despite changes in medical and retail sales, the influx of other providers into the
delivery paradigm, and changes in technology, hearing aids are delivered in
essentially the same manner as they were 50 years ago
Do You Buy “Commodities” the Same Way Today as You
Did in 1970?
Has to be “No” for Most of Us…but we are forcing our
patients into the same delivery and pricing model
we have always had.
The Answer…
What is this Bundled Pricing Strategy Actually Based On?
Typically, nothing tangible.
Rather it is typically a rudimentary calculation of invoice times X.
Why we Need to Move Past 1970: The New Norm
The “status quo” may no longer suffice.
We have to differentiate ourselves and our services from these disruptive forces that now exist in the marketplace. How do we price the product and value the service?
How do we provide care and services not offered or available through these disruptive entities?
How do we embrace these patients who have procured their devices by “disruptive” means?
• Do we turn them away?
• Do we engage the “price shoppers”?
How do we expand our focus from just selling a “widget” or a “commodity”?
Your “Real” Competition
Your Manufacturers You Work With: Sonova (Phonak), William Demant (Oticon), Starkey, Great
Nordic (GN Resound), Widex and Siemens all own clinics and “direct to consumer” enterprises (EPIC, AHAA, HearUSA, and Hearing Planet).
Your “Real” Competition
Your Third-Party Payers (which you voluntarily participate with): HiHealth Innovations
Medicaid
Your “Real” Competition
Medical Community: Audiologists
Otolaryngologists
Internists
Optometrists
Retail/Franchise: Hearing aid dispensers
Your “Real” Competition
Third-Party Administrators: HearPO
EPIC
TruHearing
HearUSA
HSA
Your “Real” Competition
Big Box Retailers:
Walmart/Sam’s Club
CostCo
Walgreens • Piloting hearing aids sales in several stores.
Your “Real” Competition
Apps: Ear Machine
I-Hear
Sound Focus
The Government: Expansions of VA and Medicaid Benefits and Coverage.
• Many of these patients would have privately paid for hearing aids 10 years ago.
Your “Real” Competition
Online Retailers/Mail Order Retailers: Ebay
Audicus • http://www.audicus.com/pages/online-hearing-
aids?gclid=CLy8tonduboCFYg7Mgodjj0A5w
GOHear http://www.sonetik.us/home/
MD Hearing Aid. https://www.mdhearingaid.com/shop/mdhearingaid-pro/
Embrace Hearing. http://www.embracehearing.com
Your “Real” Competition
Online Retailers/Mail Order Retailers: Advanced Affordable Hearing
http://advancedhearing.com/quality-low-priced-hearing-aids
Hearing Planet
• www.hearingplanet.com
Lloyds
• http://www.lloydhearingaid.com
Hearing Help Express
• https://www.hearinghelpexpress.com/default.aspx
Ovation Hearing
• http://www.ovationhearing.com
Your “Real” Competition
PSAP/Hearable Manufacturers Etymotic
• http://www.etymotic.com/consumer/personal-sound-amplifiers/bean-qsa.html
Eargo
• http://www.eargo.com
iHear
• http://www.ihearmedical.com
SoundHawk
• http://www.soundhawk.com
Sound World Solutions
• http://www.soundworldsolutions.com
Products: PSAPs
PSAP = Personal Sound Amplification Products
Hearable (has more consumer electronic implications) If you have dispensed a PocketTalker, you have dispensed a
PSAP!
They can be sold to people with hearing loss but cannot be marketed to people with hearing loss
Is there a role for these devices in OUR offices?
• Why CAN’T you integrate a quality product into YOUR practice?
Pricing
Bundling
You “bundle” all of your hearing aid product and service costs, as well as our professional fees, under one, singular price (and code).
You do not charge separately for the hearing aid evaluation/consultation and, as a result, receive no payment if a patient does not proceed with amplification.
Why Keep Bundling???
Pros: Easy.
What everyone else does.
Good for cash flow.
Why Keep Bundling???
Cons: Price often based upon nothing meaningful.
Not how insurance pays for items and services.
No patient choice.
Prices are not transparent.
Increases patient costs for many.
Does not reflect your professional time.
May be collecting less than you need to receive to cover the “average” patient.
Bundled Package Includes:
Hearing aid evaluation
Earmold impression, if required
Electroacoustic evaluation, if done
Hearing aid itself
Fitting and orientation
Dispensing fee
Verification, if performed
Dome or custom earmold, if required
Batteries
Accessories, if provided
Manufacturer warranty
Loss and damage coverage
One year to lifetime of follow-up hearing aid office visits, checks, in-house repairs, and cleanings
What is Unbundling?
Charging separately for each item or service as it occurs.
Breaking the “bundled” cost into each individual piece or aspect of service.
Why Unbundle?
Pros: Collecting the amount you need to cover your costs and
make a profit (price based on something tangible).
• Price better reflects actual financial needs.
Potential for increased revenues long-term.
Allows for increased reimbursement with most managed care situations.
Makes you price competitive.
Why Unbundle?
Pros: Allows for patient choice on how their hearing aids are
delivered.
Forces a higher standard of care.
Allows for some potential marketing advantages.
Allows for pricing for online or e-bay purchases.
• They pay everything but the cost of the hearing aid itself.
• You care less about where the aid comes from.
Why Not?
Cons: Does not work as well with managed care plans where you
have to take a large, provider discount or plans with defined warranty/coverage terms (e.g. TruHearing, EPIC or HearPO).
Will need to change office policies and procedures.
Have to collect money from patient and be comfortable with that.
Will need to change marketing program.
Hardest Parts of Taking the Leap to Itemization
Analyzing financial needs What are the risks versus the rewards?
Overcoming fear of change
Overcoming fear of the unknown The “unknown” should be reduced if you have a strong
knowledge of your financial needs
Hardest Parts of Unbundling
Letting patients make decisions A letting them live with the consequences of those decisions
Raising the bar on the standard of care you provide Patients are not willing to pay for the privilege of you selling
them something
Hearing Aid CPT Codes
92590: Hearing aid examination and selection; monaural
92591: Hearing aid examination and selection; binaural
92592: Hearing aid check; monaural
92593: Hearing aid check; binaural
92594: Electroacoustic evaluation for hearing aid; monaural
92595: Electroacoustic evaluation for hearing aid; binaural
HCPCS “S” Codes
S1001: Deluxe item, patient notified May help with upgrades.
Need to determine how each private payer recognizes and reimburses this code.
S0618: Audiometry for hearing aid evaluation to determine level and degree of hearing loss Not for Medicare.
Need to determine how each private payer recognizes and reimburses this code.
HCPCS Codes
V5008: Hearing screening
V5010: Assessment for hearing aid
V5011: Fitting/orientation/checking of hearing aid
V5014: Repair/modification of hearing aid
V5020: Conformity evaluation
HCPCS Codes
V5050: Hearing aid, monaural, in the ear
V5060: Hearing aid, monaural, behind the ear
V5130: Binaural, in the ear
V5140: Binaural, behind the ear
HCPCS Codes
V5170: Hearing aid, CROS, in the ear
V5180: Hearing aid, CROS, behind the ear
Receiver and transmitter
V5200: Dispensing fee, CROS
V5210: Hearing aid, BICROS, in the ear
V5220: Hearing aid, BICROS, behind the ear
Transmitter and hearing aid/receiver
V5240: Dispensing fee, BICROS
HCPCS Codes
V5254: Hearing aid, digital, monaural, CIC
V5255: Hearing aid, digital, monaural, ITC
V5256: Hearing aid, digital, monaural, ITE
V5257: Hearing aid, digital, monaural, BTE
HCPCS Codes
V5258: Hearing aid, digital, binaural, CIC
V5259: Hearing aid, digital, binaural, ITC
V5260: Hearing aid, digital, binaural, ITE
V5261: Hearing aid, digital, binaural, BTE
HCPCS Codes
V5090: Dispensing fee, unspecified hearing aid
V5110: Dispensing fee, bilateral
V5160: Dispensing fee, binaural
V5241: Dispensing fee, monaural hearing aid, any type
HCPCS Codes
V5268: Assistive listening device, telephone amplifier, any type
V5269: Assistive listening device, alerting, any type
V5270: Assistive listening device, television amplifier, any type
V5271: Assistive listening device, television caption decoder
V5272: Assistive listening device, TDD
V5273: Assistive listening device, for use with cochlear implant
V5274: Assistive listening device, not otherwise specified
HCPCS Codes
V5281: Assistive listening device, personal FM/DM system, monaural (1 receiver, transmitter, microphone), any type
V5282: Assistive listening device, personal FM/DM system, binaural (2 receivers, transmitter, microphone), any type
V5283: Assistive listening device, personal FM/DM neck, loop induction receiver
V5284: Assistive listening device, personal FM/DM ear level receiver
HCPCS Codes
V5285: Assistive listening device, personal FM/DM, direct audio input receiver
V5286: Assistive listening device, personal Bluetooth FM/DM receiver (streamer)
V5287: Assistive listening device, personal FM/DM receiver, not otherwise specified
V5288: Assistive listening device, personal FM/DM transmitter assistive listening device
HCPCS Codes
V5289: Assistive listening device, personal FM/DM adaptor/boot coupling device for receiver, any type
V5290: Assistive listening device, transmitter microphone, any type
HCPCS Codes
V5264: Ear mold/insert/not disposable, any type
V5265: Ear mold/insert/disposable, any type
V5275: Ear impression, each
HCPCS Codes
V5267: Hearing aid or assistive listening device/supplies/accessories, not otherwise specified
V5266: Battery for use in hearing device
V5298: Hearing aid, not otherwise classified
V5299: Hearing service, miscellaneous
Unbundled Pricing Model: Hearing Aid Evaluation and Selection
On the date of the hearing aid evaluation, you bill the hearing aid evaluation (92590/1 or V5010; whichever pays more for your average third-party hearing aid contract) to the third-party payer or patient, even if they do not proceed with amplification. Most third-party payers who cover hearing aids cover hearing
aid evaluations.
You would also bill for the earmold impression (V5275), if a custom earmold is warranted.
Unbundled Pricing Model: Hearing Aid Fitting
On the date of fit, you would bill the following codes to the patient or the third-party payer:
V52--: The code for the hearing aid itself
V5---: Dispensing fee
92594/5:Electroacoustic analysis (if performed) with date service is performed
V5011: Fitting and orientation
V5020: Conformity evaluation (if you perform real-ear and/or functional gain testing)
V5264: Earmold (custom) or V5265 Dome (disposable earmold)
V5266: Batteries (per battery)
V5267: Accessories
Unbundled Hearing Aid Evaluation and Adjustment Period
Bill 92592/3 or V5011 on the date of each follow-up visit (if billing third party payer).
If private pay patient, you may opt to bill these visits on the date of the fitting.
Unbundling: End of Evaluation and Adjustment Period
On this date, the patient has four choices:
Exchange the hearing aid.
Return the hearing aid for credit.
Keep the hearing aid and “pay as you go” for service.
Keep the hearing aid and purchase a service package.
Unbundling: Exchange
What was the reason for the exchange?
Can charge a patient a second fitting fee.
Unbundling: Return for Credit
As allowed by State law, you would refund the patient only the cost of the hearing aid itself (you would retain all other monies as the services were provided). The hearing aid evaluation and selection and earmold
impression would be non-refundable as prior to the hearing aid fitting
Unbundling: Pay As You Go
Have a fee established for every item or service and charge a patient or their third-party payer (if their benefits have not been exhausted) every time the item is provided or the service is performed.
Fees based upon breakeven analysis and/or cost of goods.
Nothing is free or no-charge.
Unbundling: Service Package
This is the service you are currently providing at no-charge once the aids are fit and accepted.
Think of it as the difference between your current bundled fees and the unbundled package cost.
A patient pays you a fixed rate per aid (based upon the breakeven analysis) for managing their hearing aids and services for a given period of time.
Base this on your “average” patient.
Disclaimer
Prices listed are for illustrative purposes only and should not be construed as a recommendation of any given price. Price must be established individually by each clinic.
Example of Bundled Price
V5261 (Hearing aid, digital, behind-the-ear, binaural): $5000
V5264 (Earmold, not disposable, each): $50 x 2
Example of Unbundled Price
V5261: The code for the hearing aid itself
$2400 (single unit two aids)
V5160: Dispensing fee, binaural
$200
92595:Electroacoustic analysis, binaural
$33 (10 minutes)
V5011: Fitting and orientation
$200 (1 hour)
V5020: Conformity evaluation
$66 (20 minutes)
V5266: Batteries (per battery)
$1.50 x 8
V5264: Earmold (custom)
$40 x 2
Example of Unbundled Price
Assume example of $200 per hour fee (breakeven plus profit)
Hearing aid evaluation of $200 and $33 x 2 earmold impression paid on the date of that service
Each $100 hearing aid checks can be billed on the date of service (if insurance case) or at fitting (for private pay patient)
Unbundled Package
$266 paid on date of hearing aid evaluation
$2991 paid on date of fitting
$200 paid on each date of service for two, 30 minute follow-up visits within evaluation and adjustment period
Collected $3457 by date of acceptance
Unbundled Package
Pay as You Go: $100 for every 30 minute hearing aid check
$50 for every 15 minute reprogramming
• Does not matter if one or two aids; it is all about the time scheduled (as you cannot see anyone else).
Three-year Service Plan: $875 for one aid (three hearing aid checks, three re-
programmings, three in-house repairs, 75 batteries; $862 rounded up) or $1575 for two aids (six hearing aid checks, three re-programmings, six in-house repairs, and 150 batteries).
Price Comparison: Bundled vs. Unbundled (Private Pay)
Bundled = $5100
Unbundled Pay as You Go = $3457
With Service Package (binaural) = $5032
Want to Dispense a Better Aid than a Retailer at a Better Cost?
Patient pays $1620 ($810 each) at an online, health insurance backed retailer for a hearing aid with no tax, no service, no evaluation, no verification, 30 batteries, package of wax guards, no extra domes or earmolds, no follow-up, no loss and damage coverage, and no manufacturer warranty for repairs due to moisture or wax (one year otherwise).
Unbundled: $1657 total - $857 in professional fees plus two hearing aids with a price of $400 each, with no tax, no service, evaluation, verification, two follow-up appointments, custom earmolds, a three-year manufacturer warranty for any repair issue, loss and damage, and 8 batteries.
How it Helps with an Insurance Case
Bundled: You bill an insurance carrier for $4000 for binaural, digital, behind the ear hearing aids using V5261. Insurance pays $1800 ($900 each). The patient cannot be balance billed. You have manage that aid for the same number of years as you would a private pay patient.
Unbundled: $2175 total – You bill an insurance carrier in an unbundled manner and receive $1800 for the hearing aids, $50 for the HAE, $40 for the EMI, $80 for the HAF, $80 for the dispensing fee, $25 for the EAA, $60 for the REM, $40 for the EM. This patient can pay as they go for service or purchase a service plan, just like their private pay counterparts.
Patient Buys Their Aids Elsewhere…
WHO CARES?!! They are still NOW your patient.
Can charge them: $450 for electroacoustic analysis, fitting, programming,
verification, and one follow-up appointment (no follow-up, no batteries, no accessories).
Sell them a service package.
Allow them to pay as they go for service.
Questions?
Kim Cavitt, AuD
773-960-6625
I answer questions, at no charge, for 30 days following a live presentation. ADA and Michigan Academy of Audiology members can pose unlimited questions anytime as it is a value added benefit of their membership.
