July 6, 2010 Audiology

Tips for Audiologists Contracting With MCOs

Although audiologists may find many benefits in enrolling as a provider with managed  care organizations (MCOs), they should be aware of potential downsides as well.

Audiologists should review contracts carefully before enrolling as a provider with MCOs, a category that includes preferred provider organizations (PPOs) and health maintenance organizations (HMOs). If, for example, the contract includes a cap on the amount the audiologist can be reimbursed for a hearing aid and associated services, the service provider may lose money on a client rather than make a profit.

Although many health plans cover hearing evaluations, fewer plans provide coverage for hearing aids. For many years, audiologists have been reimbursed only for providing hearing evaluation services and possibly auditory rehabilitation. However, employers increasingly look to respond to employee needs and may add hearing aids to their benefit plans.

Audiologists interested in becoming providers for these plans have several approaches to consider:

Contract with a PPO that specializes in hearing services, including hearing aids. Several PPOs enroll audiologists as providers with specific coverage details.

Enroll in a plan with an established benefit limit, such as $1,000 per hearing aid every two or three years. In a fee-for-service plan, the audiologist is allowed to bill the patient for the balance. Under this example, if the audiologist dispenses a $3,200 hearing aid, the audiologist can bill the patient for the balance of $2,200.

Enroll in a plan that reimburses the provider based upon a fee schedule or a cost-plus percentage amount that can include a cap. In this case, the audiologist submits an invoice for the hearing aid to the health plan and receives a set percentage markup over the invoice price. For example, if the invoice price is $2,000 and the reimbursement rate is 10% above invoice, the audiologist can receive $2,200. However, reimbursement may not include coverage of the associated costs, such as the hearing aid evaluation itself. In addition, the audiologist will lose money if the PPO places a cap on reimbursement for a hearing aid, and the audiologist dispenses a hearing aid that has a cost that exceeds the cap.

Audiologists should read MCO contracts carefully because plans may add a hearing aid benefit but hold the clinician to the terms of the original contract. The audiologist's contract is different from the one held by the beneficiary. The plan member will see there is a $1,000 benefit toward the purchase of a hearing aid dispensed by an in-network audiologist; as a network provider, however, the audiologist must know which obligations are reimbursable. It may not be beneficial to the audiologist if the plan places a cap on reimbursement to the audiologist. 

Steven White , PhD, CCC-A, director of health care economics and advocacy, can be reached at swhite@asha.org.

Janet McCarty , MEd, CCC-SLP , private health plans advisor, can be reached at jmccarty@asha.org.

cite as: White , S.  & McCarty , J. (2010, July 06). Tips for Audiologists Contracting With MCOs. The ASHA Leader.


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