Bundling Versus Unbundling

The conventional method for offering hearing aid devices and services is in a "bundled" format, where one price reflects the device, the fitting, and post-fitting services. As Internet sales, online hearing aid services, and insurance coverage changes, audiologists are faced with the decision to bundle or unbundle hearing aid services. Below are some points to consider when you are making this decision.

What are the operating costs/break-even costs of your hearing aid business?

Before determining which model to pursue, you should perform a detailed analysis of overhead expenses, hourly salaries, cost of goods, and desired profit margin. It may be beneficial to consult an accountant or finance specialist to determine the current worth of the practice, future financial goals, and daily revenue necessary for reaching those goals.

What is your current fee schedule?

For each service and good you provide, determine what your set rate is. You will need to take into consideration contracts with private insurers, Medicaid and Medicare allowable payments, and cash payments to determine your rates. Consult with the Medicare fee schedule and other fee analyzers to help determine what is reasonable for specific services in your market.

What does the bundled price include?

Beyond the device, other services in the price of the hearing aid include initial recommendations, fitting, verification, orientation, ongoing counseling, electroacoustic measures, repairs and modifications, reprogramming, and documentation. Accessories or batteries also may be included in the bundled price. Walk-in office visits, aural rehabilitation, warranties, and educational sessions are additional services you may need to consider in the bundled cost. An analysis of what your practice includes and how often the services are rendered will provide information regarding the hourly rate of the bundled price and the value of your professional services.

What do you consider the bare minimum of services that must be included in a hearing aid purchase?

Unbundling services does not necessarily require that each service be itemized. It is possible to institute a partial unbundling. For example, you can categorize services into basic (services that are non-negotiable for you, such as fitting, verification, programming sessions), standard (additional services that would enhance the transition to amplification), and all-inclusive (all services, perhaps including additional classes or accessories). Then, determine what type of delineation of services will work best in your practice.

What model is preferred by the insurance you bill?

Hearing aids and hearing aid services are not a benefit of Medicare, but are benefits of state Medicaid programs and some private health insurers' programs. It is important that you refer to contracts you have with private insurers and are able to bill them to meet contract requirements. Also note that your published price must be consistent, regardless of insurance type or private payer. What you accept as payment from insurance depends on the contract you negotiated with the individual company.

What state licensure or hearing aid regulations must you consider?

State laws may regulate what is included as a refund in a trial period or what professional services you must offer. Refer to your state hearing aid regulations and licensing regulations to ensure you are compliant.

What model is the best choice for your competitive market?

It is important to consider what is commonly practiced in your community, how receptive clientele will be to different models, and how to remain competitive in the area. This final analysis should include your operating costs, the break-even rate, the desired profit margin, and an evaluative method to determine if the model you selected is successful.

What CPT/HCPCS service codes can be used to delineate services?