Introduction to Medicare

Audiology diagnostic services and speech-language pathology services are benefits of the Medicare program. Older Americans and those with severe disabilities qualify for Medicare coverage and many of them receive audiology and speech-language pathology services. For example, outpatient speech-language treatment (CPT/HCPCS 92507) was provided under Medicare 1,508,520 times in calendar year 2008.

There are a number of regulations, guidelines and local coverage policies that must be understood before providing services to Medicare beneficiaries. Two examples related to speech-language pathology and audiology are:

  1. Audiology services cover diagnostic testing only.
  2. Graduate students in speech-language pathology and audiology must be supervised in the room 100% of the time when providing Medicare covered services.

The General Structure of Medicare

In 1965, Medicare was established under Title XVIII, Health Insurance for the Aged and Disabled, of the Social Security Act. Medicare has four benefit programs: Part A, Hospital Insurance Benefits (inpatient coverage); Part B, Supplementary Medical Insurance Benefits (outpatient coverage); Part C, Medicare Advantage Plans (similar to an HMO or PPO); and Part D, Prescription Drug Plans. These titles are important to remember when identifying the types of benefits found in the program.

Medicare Part A

Medicare was first developed to provide hospital and medical benefits; therefore, coverage and reimbursement for services are weighted toward hospitals and physicians. The settings and services covered by Part A include inpatient hospital services, skilled nursing facility (SNF) services, home health services, and hospice services. Payment for audiology and speech-language pathology services is included in the facility payment under Part A.

Medicare Part B

Supplemental Medical Insurance, Part B, is an optional program for Medicare beneficiaries and is paid through a monthly premium. It covers hospital outpatient services and services usually provided in non-institutional settings such as those rendered by physicians, diagnostic services such as those provided by audiologists, durable medical equipment, prosthetics and orthotics, and private practice speech-language pathology, physical therapy, and occupational therapy. Part B billing also applies to services for inpatients in hospitals and SNFs when the coverage rules dictate that the beneficiary is ineligible for Part A benefits or when Part A benefits have been exhausted. All physician services delivered directly by the physician are paid under Part B regardless of setting.

Part B includes coverage of durable medical equipment (DME) and supplies. Claims for DME and supplies are processed by four regional DME Medicare Administrative Contractors. Only approved supplier organizations can bill Medicare for equipment and supplies.

Physician Referral

Under Part B, those services that are not provided directly by physicians must be obtained consequent to a referral by a physician, physician assistant, or nurse practitioner (if allowed by state law). For audiology services, a physician referral is required prior to diagnostic testing. For SLP services, the physician must approve the plan of care within 30 days of the first SLP visit. There are no Medicare forms for recording physician referral.

Payment Methodology

Audiology and speech-language pathology services under Part B have reimbursement rates established by the Medicare Physician Fee Schedule regardless of provider setting, except for outpatient audiology services provided in hospitals. Payment is determined by the fee associated with a specific procedure code in those settings. Hospital outpatient audiology services are paid under the Outpatient Prospective Payment System. The fee schedule is updated annually.

Medicare Part C

As indicated earlier, Medicare Advantage expands health care options for Medicare beneficiaries. The program was created as a way to provide incentives for managed care organizations (MCOs) to participate in Medicare. MCOs will contract directly with audiologists and speech-language pathologists or have professionals in their employ. Speech and hearing benefits must conform at least to the level of Part B Medicare services.

Medicare Part D

Medicare prescription drug coverage (Part D) allows the beneficiary to join a Medicare drug plan. Plans vary in cost and drugs covered. There are two types of plans offered: Medicare Prescription Drug Plans and Part D as part of a Medicare Advantage Plan.

Medicare Administrative Contractors and Local Coverage Determinations

The Medicare program is administered locally to providers and beneficiaries by private entities, usually healthinsurance companies(e.g., a Blue Cross Blue Shield plan) that contract with CMS. Medicare Administrative Contractors function as Part A and Part B payers.The Part A division processes claims only from institutions or agencies for both Part A and Part B services. The Part B division makes payments only to individual practitioners or group practices. There are 15 MACs.  CMS maintains a current list of 15 MACs [PDF] on its website.

MACs establish Local Coverage Determinations (LCDs) for selected services so that providers better understand what services are covered and how to code and document the procedures. LCDs reproduce coverage rules from national Medicare policy manuals and provide rules in the absence of a national policy or for further clarification of a national policy. Not all MACs have established speech-language pathology or dysphagia LCDs.

An investigative activity related to the processing of claims is the detection of abusive or fraudulent practices in the submission of claims. MACs also sponsor educational programs for both providers and beneficiaries. These education programs assist in compliance with Medicare policy. Recovery Audit Contractors (RACs) are regional organizations separate from MACs that also review claims for inappropriate payments.

ASHA and state speech-language-hearing associations have established a State Advocates for Medicare Policy (StAMP) Network (one of the ASHA State-Based Advocacy Networks) to improve communication between the contractors and audiologists and speech-language pathologists.

ASHA has developed two sample LCDs and all current LCDs can be found on the CMS website.

For more information regarding LCDs, please refer to the Medicare Program Integrity Manual, Chapter 13 [PDF].


Audiologists and speech-language pathologists must be alert to protocols when providing services to Medicare beneficiaries. Qualifications of the professional, coverage guidelines, payment policies, and local coverage decisions are readily accessible and should be reviewed periodically as they are updated. Moreover, ASHA's website and The ASHA Leader are good sources of information related to Medicare issues.

Related Information on the ASHA website:

Related Information on the CMS website:

ASHA Corporate Partners