Legislative developments have significantly changed the way
insurance coverage is provided for hearing aids. First, the Americans with
Disabilities Act (ADA) was changed effective January 1, 2009 to significantly
expand the definition of disability by defining major life activities to
include hearing, speaking and communicating. Some insurers made changes to
their standard benefits as a result. United Healthcare (UHC) was one of these
carriers. In short, they began covering hearing aids like other durable medical
equipment effective January 1, 2010. UHC posted this explanation of the change . Other insurers are taking a more passive approach and waiting for the EEOC and
the courts to interpret the legislation and provide guidance.
ASHA already had model coverage in place for our staff and their families, so the ADA changes had little impact on us.
Then, on October 1, 2011 Maryland passed a bill concerning the coverage of hearing aids (Chapter 527, House Bill 452.) The bill requires
an insurer that provides coverage for hearing aids to allow an individual to
choose a hearing aid that is priced higher than the benefit payable under the
policy or contract and pay the difference between the retail price and what the
insurance covers. In effect, this bill allows in-network providers to balance
bill. This Maryland bill is the only exception I've ever seen that allows
in-network providers to balance bill for any type of medical service.
Let’s look at an example of how a hearing aid claim might be
covered in and out-of-network before and after the passage of the Maryland bill
with a policy that includes an in and out-of-network benefit.
Here are definitions for some of the terms used.
Balance billing is when a provider of a medical service bills the patient for the difference between the provider’s actual charges and the amount the provider is reimbursed from the patients insurance benefit plan. This commonly occurs when a patient seeks services from an out-of-network provider, but has been prohibited by the contracts governing the relationship of in-network providers. In-network providers negotiate a contract with an insurance network that specifies what they will be reimbursed for providing services to patients that are members of that network. They agree to accept the agreed upon reimbursement amount as payment in full for their services.
Out-of-network providers - Out-of-network services are those provided by physicians or other health care providers that have not entered into a contract with the health insurer to accept discounted rates.
Durable Medical Equipment (DME) is a medical item that can be used repeatedly and would not generally be useful to an individual in the absence of an illness or injury e.g., crutches and wheel chairs.
Deductible – The amount a member must pay out-of-pocket for services before the insurer will start making payments for covered services. A deductible is typically set on an annual basis.
Usual, Customary and Reasonable (UCR) - Before managed care became common, medical service providers typically charged insurers a retail, non-discounted rate for services. The concept of usual, customary and reasonable rates was developed to protect against providers engaging in fee gouging. Health insurers generally calculate coverage for out-of-network benefits based on a percentage of UCR rates.
The American Medical Association (AMA) defines Usual, Customary and Reasonable (UCR) as:
"Usual": the fee an individual physician usually charges his or her private patient for a given service (i.e., his or her own usual fee);
"Customary": a fee that is within the range of usual fees physicians of similar training and experience currently charge for the same service within the same specific and limited geographical area; and
"Reasonable": a fee that meets the above two criteria and is justifiable, considering the special circumstances of the particular case in question without regard to payments that governmental or private plans have discounted.
As I mentioned previously, this is the only example I know of where providers are permitted to balance bill in-network. In all other instances, they are reimbursed at the rate they negotiated in their contracts with the insurers. It's particularly difficult to communicate and difficult for people to understand since it's so outside the norm.