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  ADA and Cochlear Implants

email: reimburse@cochlear.org





ADA Legal Opinion
Legal Opinion Regarding Application of the ADA to Cochlear Implants
ADA Amendments Act
Congress says cochlear implants do not remove disability protections




Applying the ADA to Cochlear Implants



The Americans with Disabilities Act (ADA) of 1990 [42 USC Sec. 12101 et seq.] is a civil rights law that protects persons with disabilities from discrimination in employment, acces to government and commercial services, transportation, and telecommunications. It builds upon Section 504 of the Rehabilitation Act of 1973, which applied these anti-discrimination provisions to Federal programs and property. Persons are protected by the ADA or Section 504 if they have a physical or mental impairment that substantially limits a major life activity.

In July 1994, Cochlear Corporation hired Mark Hobratschk, the Institutional Reimbursement Manager for Wyoming Medicaid, to determine how existing laws could be used to improve health plan coverage of cochlear implants. At the time, managed care was booming, and most new health maintenance organizations were excluding all cochlear implant services from their policies due to the high up-front costs of implantation.

By October 1994, Mr. Hobratschk obtained a legal opinion from Cochlear counsel that reiterated his communications with the Equal Employment Opportunity Commission (EEOC). The EEOC is the Federal agency responsible for enforcement of ADA provisions relating to employment benefits.

The legal opinion held that the ADA does regulate health benefit plan denials that exclude cochlear implants without appropriate justification, as discussed below.

Title I of the the ADA prohibits an employer from discriminating against any disabled employee in all terms, conditions, and privileges of employment. EEOC guidelines published in 1993 that specifically identifies health benefit plans within this definition.

An employer discriminates against a disabled employee when it participates in a contractual relationship with a health plan that has the effect of discrimination. So both the employer and the health plan are liable for the discrimination.

Title V of the ADA does allow health plans to make health-related or disability-based distinctions in terms of its benefits. In theory, a health plan could exclude coverage of cochlear implants, but only if it provided the following:

(1) Actuarial data demonstrating that coverage of cochlear implants woul not be so costly that it would make the plan financially insolvent or dramtically increase premiums.
(2) Clinical evidence demonstrating that the procedure has no medical benefit.

Employee health plans do not have to make these justifications for items or services not exclusively applicable to a disability.

However, cochlear implants are used solely for the treatment of profound and severe hearing loss. These persons have no other medically-effective alternate treatment since they do not benefit from hearing aids.

As a result, a health plan that excludes cochlear implants unquestionably makes a disability-based distinction. Even if they were able to provide the required justification, the EEOC has rarely upheld a blanket exclusion for a particular disability.

However, in the case of cochlear implants, no health plan has ever provided any of the required data to justify exclusion. It is doubtful they could. In order to justify the exclusion based on acturial data, the plan would have to show that it also excludes all other treatments that are equally costly.

In addition, it would be difficult for a health plan to claim the cost of cochlear implants would make the plan insolvent. Roughly 90 percent of health plans now manage to cover cochlear implant services without going under, and many of these include small health plans. Furthermore, given the low frequency of cochlear implantation, very few health plans receive several claims in any given year.

The efficacy of cochlear implantation is also well-established by the Food and Drug Administration and National Institutes of Health, among numerous other peer-reviewed clinical studies.

For these reasons, the legal opinion concluded that no employee benefit plan can legally issue a blanket exclusion for cochlear implant services. A plan can provide a lower level of coverage or reimbursement than for other non-disability related services. But it cannot exclude cochlear implant services entirely.

Mr. Hobratschk identified one local HMO, CompreCare of Colorado, as a test case for this legal opinion. CompreCare had refused to cover cochlear implants for several years, but after several appeals based upon the provisions of the ADA, it reversed those denials and provided benefits.

The legal opinion was used to remove exclusionary policies under several other plans such as FHP of Southern California and Kaiser Permanente plans in various regions.

In March 1996, Mr. Hobratschk and Kevin Gaudette met with senior ADA counsel for the EEOC in Washington, DC. The EEOC concurred that because the only alternative to cochlear implantation was disability, blanket exclusions clearly constitute discrimination under the ADA.

The EEOC was scheduled to release revised guidelines in fall 1997 that specifically clarified their position related to cochlear implants, and also applied the ADA to self-funded plans. However, these guidelines were indefinitely delayed due to rigourous protests from commerical health plans, and have yet to be actually implemented.

The EEOC position has yet to also be fully tested in Federal courts. There have been a handful of cases related to disability-based distinction that have engendered mixed results. We are aware of only one case involving cochlear implants. It was dismissed for reasons apart from disability-based distinctions.

However, the guidelines and legal opinion have been successful in persuading many insurers that blanket exclusions of cochlear implant services are unlawful. Most choose to provide coverage instead of attempt to provide the required actuarial data.

Only a handful of health plans have forced those denied to file a charge of discrimination with the EEOC. This is a legal prerequisite of a Federal ADA lawsuit, and can be done by contacting your local field office for the EEOC. If the EEOC elects not to file suit on your behalf in Federal court, you can do so 180 days after filing the EEOC charge.

For additional information on the ADA and health plans, click on reviews by Gwen Thayer Handelman and Bonnie Poitras Tucker