August 3, 2010 Feature

Medicare Revises, Clarifies Audiology Rules

Recent changes in Medicare policies affect the use of audiometric technicians, computer-administered audiometric devices (e.g., Otograms), re-evaluations, hospital outpatient services, and services rendered as an employee or contractor of a physician, physician assistant, or nurse practitioner.

In May the Centers for Medicare and Medicaid Services (CMS) issued revisions that became effective July 28 to two Medicare policy manuals. The transmittals, R129BP [PDF] and R2007CP, both titled Revisions and Re-issuance of Audiology Policies, are available online. The official summary [PDF] of both transmittals is available online.

The instruction stipulates that audiology services must be furnished by or under the supervision of a physician unless the service is personally performed by an audiologist or a non-physician practitioner (NPP, i.e., a physician assistant or nurse practitioner).

If an audiological diagnostic test requires professional skills, Medicare will not pay for the test if furnished by a technician under the direct supervision of a physician rather than performed personally by a physician, audiologist, or NPP. However, the transmittals state that there may be subtests, or parts of a battery of tests, that may be furnished appropriately by an "educated and experienced technician using a specific protocol under the direction of a supervising physician."

CMS did not identify the specific tests that require professional skills. Instead, CMS is allowing individual Medicare contractors (i.e., Medicare administrative contractors or carriers) to determine what services do not require professional skills.

Divided Codes 

The instruction further states that if a service—such as comprehensive auditory evoked potentials—has both a technical component (TC) and a professional component (PC), then the TC may be performed by a technician who is appropriately trained, following a protocol, and supervised by the physician. The supervisor is providing the PC (i.e., professional skills) for the service.

In the explanation of PC/TC divided codes, CMS states that "a physician may not bill for a PC service furnished by an audiologist." An audiologist employed by or in a contractual relationship with a physician or physician group must be an enrolled supplier of Medicare services. Audiologists who render services in office or clinic settings should bill for the PC services (or any covered audiological service) using their own NPI as the rendering provider on the claim.  However, if an audiologist is employed by a physician or physician group, payments may be "reassigned" to the employer. Audiologists may complete a Reassignment of Benefits form (CMS-855R) for each employer so that the payment for the service rendered by the audiologist can be directed to the physician or group that employs the audiologist.

Computer-Administered Hearing Tests

Previous Medicare policy provides that computer-administered hearing tests (including, but not limited to, Otograms) are considered screening tests and are not covered under codes for diagnostic audiological testing. This language and the reference to Otograms are eliminated in the revision that took effect last month. Category III Current Procedural Terminology (CPT, © American Medical Association) codes were recently established for computer-administered hearing tests; in the revision, CMS indicates that computer-administered tests may or may not be screening tests and that contractors have discretion to cover or deny payment for these services. 


The revisions include an expanded description of covered re-evaluations and note there are many diagnoses that place the patient at probable risk for a change in status. Transmittal 127 provides examples of appropriate reasons for ordering audiological diagnostic tests that could be covered. They include, but are not limited to:

  • Evaluation of suspected change in hearing, tinnitus, or balance.
  • Evaluation of the cause of disorders of hearing,
    tinnitus, or balance.
  • Determination of the effect of medication, surgery, or other treatment.

Re-evaluation to follow up changes in hearing, tinnitus, or balance that may be caused by established diagnoses that place the patient at probable risk for a change in status including, but not limited to otosclerosis, atelectatic tympanic membrane, tympanosclerosis, cholesteatoma, resolving middle ear infection, Ménière's disease, sudden idiopathic sensorineural hearing loss, autoimmune inner ear disease, acoustic neuroma, demyelinating diseases, ototoxicity secondary to medications, or genetic vascular and viral conditions.

  • Failure of a screening test (although the screening test is not covered).
  • Diagnostic analysis of cochlear or brainstem implant and programming.
  • Audiology diagnostic tests before and periodically after implantation of auditory prosthetic devices.

If an audiologist is enrolled in Medicare and provides services in an outpatient hospital setting, the hospital may bill Medicare using the audiologist's National Provider Identifier number on the claim form if the audiologist has reassigned his/her benefits to the hospital (via form CMS-855R). Conversely, Transmittal 1975 states, "If an audiologist is employed by a hospital but is not enrolled in Medicare, the only payment for a hospital outpatient audiology service that can be made is the payment to the hospital for its facility services under the hospital Outpatient Prospective Payment System (OPPS). No payment can be made under the Medicare Physician Fee Schedule for professional services of an audiologist who is not enrolled." Physicians may not bill for the services of audiologists provided in a hospital.

Outpatient Hospital Services 

Hearing and balance assessment services furnished to an outpatient of a hospital are covered as "diagnostic services" under Section 1861(s)(2)(C) of the Medicare statute. Services furnished in a hospital outpatient department are covered and payable under the hospital OPPS or other payment methodology applicable to the provider furnishing the services.

Policies for diagnostic tests furnished in the hospital outpatient setting are in Chapter 6, Section 20.4, of Pub 100-02, the Medicare Benefit Policy Manual [PDF]. Policies for audiology tests described in transmittals R127BP and R1975CP are in Chapter 15 [PDF], Section 80.3, of the Medicare Benefit Policy Manual and Chapter 5, Section 30.3 of Pub 100-04, the Medicare Claims Processing Manual.


Questions or comments should be directed to  

Mark Kander, director of health care regulatory analysis, can be reached at 

Steven White, PhD, CCC-A, director of health care economics and advocacy, can be reached at

cite as: Kander, M.  & White, S. (2010, August 03). Medicare Revises, Clarifies Audiology Rules. The ASHA Leader.


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