The Centers for Medicare and Medicaid Services (CMS) published the proposed rates for services in hospital-based outpatient departments in 2008 (Federal Register, August 2, 2007). The Medicare hospital Outpatient Prospective Payment System (OPPS) establishes payment rates for all services except speech-language pathology, physical therapy, and occupational therapy. Therapy services are paid under the Medicare Physician Fee Schedule. Payment for Level I audiometric tests (e.g., speech threshold) are proposed to increase only 0.5% while Level II hearing tests may increase by 7.0%. Vestibular function tests are scheduled to increase by 3.5%.
CMS is proposing to increase the cochlear implant payment level, covering the surgery and the device, from $25,500 to $25,753. Because intraoperative monitoring is proposed to be bundled into the implantation rate, the net payment increase is less than one-half percent. Apparently, one reason for insufficient payment for cochlear implants is due to the hospitals' reluctance to mark up procedures that include high cost devices to the same degree as less costly procedures. This accounting practice undervalues the cost of high-priced procedures. A 2006 study funded by the cochlear implant manufacturers, adjusted for 2008, indicates an average hospital cost of $31,988 for implantation. This means a hospital would lose more than $6,000 each time it performed the surgery if the proposed rate is finalized. ASHA submitted regulatory comments to CMS stressing that the payment shortfall may be a disincentive for hospitals to consider opening a cochlear implant center. Moreover, many centers are currently operating short-staffed, resulting in lengthy waits for patients to receive pre- and post-cochlear implant services.
For auditory osseointegrated implants, the proposed payment is $2,583 for the surgery. This amount does not include the costs of the Baha (bone-anchored hearing aid) device for which a separate payment will be made as a "pass-through" payment for new technology. ASHA submitted comments to CMS stating that the proposed surgical payment ($2,583) is not appropriate because it represents an APC (Level V ENT Procedures) that includes non-device related procedures. Also, we believe that the CMS plan to determine the device cost and related hospital outpatient facility expenses by 2009 is unreasonable because of low utilization (230 Baha surgeries in 2006); CMS is allowed to extend the "pass-through" status until 2010.
Public comments were accepted by CMS through September 14, 2007. For further information, please contact Mark Kander, ASHA's Director of Health Care Regulatory Analysis, via e-mail at mkander@asha.org or by phone at 800-498-2071, ext. 4139.
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