|
COCHLEAR IMPLANTS |
||||||||||||||||||||||
|
|
||||||||||||||||||||||
|
|
||||||||||||||||||||||
|
||||||||||||||||||||||
|
|
||||||||||||||||||||||
|
||||||||||||||||||||||
|
|
||||||||||||||||||||||
|
||||||||||||||||||||||
|
|
||||||||||||||||||||||
|
||||||||||||||||||||||
|
|
||||||||||||||||||||||
|
||||||||||||||||||||||
|
|
||||||||||||||||||||||
|
||||||||||||||||||||||
|
|
||||||||||||||||||||||
|
||||||||||||||||||||||
|
|
||||||||||||||||||||||
|
||||||||||||||||||||||
|
Disability Rights |
||||||||||||||||||||||
|
|
||||||||||||||||||||||
|
|
||||||||||||||||||||||
|
||||||||||||||||||||||
|
|
||||||||||||||||||||||
|
|
Sitemap |
|||||||||||||||||||||
|
||||||||||||||||||||
|
|
||||||||||||||||||||
|
|
MEDICAID AND COCHLEAR IMPLANTSUpdated May 2002 Medicaid is a Federal government program that comprises 16 percent of national health expenditures and provides basic health insurance coverage to approximately 44 million Americans, including 7 million disabled persons under age 65. Unlike Medicare, Medicaid is administered by the States (and territories), subject to broad Federal requirements and guidelines. Consequently, there is a great deal of variation from State to State in terms of eligibility, scope of benefits, and reimbursement, especially for cochlear implants and related services. A person who is eligible for Medicaid in one State may not be eligible in another State, and the services covered by one State may differ considerably from another State. As recently as 1994, over 20 States did not provide benefits for cochlear implants. Advocacy efforts by Mark Hobratschk at Cochlear Corporation (see HCFA Directives) resulted in dramatic improvement as the Federal agency that administers Medicaid began to enforce Federal regulations that do not allow States to deny coverage to children under age 21 of the only available treatment to alleviate their hearing loss. Presently, all States are required to provide benefits for children, and the vast majority provide benefits for adults. This directive significantly expanded access to cochlear implants. In 1994, only about 20 percent of cochlear implant surgeries in the US were for children under age 18. By 2001, that number grew to over 50 percent (according to Cochlear Americas). Low reimbursement levels continue to be the major problem among Medicaid programs. Cochlear implant centers in several States incur enormous financial losses for every cochlear implant surgery they perform. Both RAND Corporation and Hear US completed research in 2000 finally identifying States with exceptionally low payment amounts for cochlear implant services, especially the post-implant aural rehabilitation and speech processor programming that are critical to the safety and effectiveness of cochlear implantation. Yet, Hear US estimates that about 11 percent of the nearly 30,000 cochlear implant surgeries performed in the United States through 2003 will be covered by Medicaid. Three percent of these nearly 30,000 cochlear implant surgeries will be Medicaid children under the age of five. A 2001 Cochlear Americas survey of physicians estimated that 18 percent of surgeries are covered by Medicaid. Thus, whichever figure is used, Medicaid surgeries will continue to be a significant component of the case-mix for a cochlear implant center, and only the largest of centers can remain viable without adequate Medicaid reimbursement. Eligibility Medicaid is the largest source of insurance coverage for the poor or disabled. The program was designed to provide medical assistance to those persons receiving cash payments under two Social Security programs: Aid to Families with Dependent Children (AFDC) and Supplemental Security Income (SSI) for the aged, blind, or disabled. About 78 percent of disabled Medicaid beneficiaries qualify through SSI. Persons eligible for SSI are automatically eligible for Medicaid in 39 States (and the District of Columbia). However, 11 States still use more restrictive eligibility criteria. For a list of these States, click here. Most States now also provide coverage for groups not receiving cash payments, and due to Title XXI of the Social Security Act or the State Children’s Health Insurance Program (SCHIP) created by the Balanced Budget Act (BBA) of 1997, all children under the age of 19 in families with incomes below the Federal poverty level will be eligible for Medicaid coverage by 2002. In addition to these "categorically needy" groups, States may provide Medicaid benefits to "medically needy" beneficiaries. These are individuals who meet the "categorically needy" group requirements, but have sufficient income to meet basic living expenses and are thus ineligible for a cash assistance program. There is considerable variation in the criteria for these optional groups among the States. Very often these "medically needy" individuals do not have sufficient income to pay for medical expenses (especially cochlear implantation). However, every State that exercises the option to cover the "medically needy" population must first deduct certain incurred medical expenses before determining whether a person or family is eligible for Medicaid. This is known as the "spend down" option under Section 1902(f) of the Social Security Act. Since all States are required to go back and provide Medicaid benefits three months before prior to the month in which the application for Medicaid eligibility is filed, a person family may deduct the amount of medical expenses they incurred in the three months prior to their application. Some States may even exercise their option to extend this period to beyond three months. Many cochlear implant candidates who did not otherwise qualify for Medicaid were able to secure Medicaid benefits for the procedure through the spend down option. However, it is a process that is generally not voluntarily publicized by State Medicaid offices. For questions about eligibility, contact the Medicaid office in your respective State. An updated list of contacts at State Medicaid agencies is available at the CMS Medicaid website. Coverage criteria for children Most children that receive cochlear implants are covered by a Medicaid program. This is due to the Omnibus Budget Reconciliation Act (OBRA) of 1989, which established the Early Periodic Screening Diagnosis and Treatment (EPSDT) program requiring all State Medicaid programs to cover any medically necessary service for children under the age of 21, regardless of whether the State covers the service under their Medicaid State Plan. As a result, Medicaid is unlike Medicare in that all Medicaid programs provide benefits for hearing aids and assistive listening devices (such as FM systems). However, the criteria Medicaid programs generally use for coverage of cochlear implants is very similar to Medicare. Even after implementation of EPSDT, Medicaid coverage of cochlear implants was very limited. Over 20 States did not provide benefits for children and most did not provide benefits for adults. Those that did cover cochlear implants often reimbursed so poorly that many cochlear implant programs were unable to absorb the significant financial losses incurred in treating Medicaid beneficiaries. As a result, cochlear implant manufacturers and hospitals were often not eager to seek improved Medicaid reimbursement. In 1994, Cochlear Corporation hired Mark Hobratschk, who formerly managed the institutional reimbursement programs for Wyoming Medicaid. Hobratschk promptly sought and secured Federal enforcement of EPSDT regulations as it relates to cochlear implants. Under EPSDT, a State may decide among alternative treatments, but may not deny a child its only treatment to ameliorate a disability. HCFA agreed that denials of cochlear implants forced profoundly hearing impaired persons to be disabled, and directed all Medicaid programs to at least provide benefits for children, including all coverage for all costs necessary to effectively use a cochlear implant (including batteries, repairs, replacements, pre-operative audiologic testing, and post-operative speech processor programming and aural rehabilitation). Most States complied with this directive including California, Florida, Georgia, Idaho, Louisiana, Maryland, Tennessee, and Virginia. Other States such as Alabama complied after fighting the directive for months or years. In addition, the only State with a Federal waiver from this EPSDT directive voluntarily revised its Medicaid coverage policy to provide cochlear implant benefits for adults and children (see Oregon Health Plan). Nearly all States have now implemented a cochlear implant coverage policy under Medicaid, at least for children. Those without a cochlear implant coverage policy generally are rural States that have not received a claim for cochlear implants in several years. The States of Kansas and Utah are two that have consistently demonstrated a public determination not to comply with this directive, although they have always lost administrative hearings on this issue. Coverage criteria for adults Medicaid coverage for adults is harder to secure than for children. About 75 percent of States provide benefits for adults, although some like Alabama, Arkansas, Delaware, Georgia, Kansas, Kentucky, Louisiana,South Dakota, and Utah still do not. (Utah informed Hear US that they provide benefits for both adults and children, although in actuality they do not.) However, coverage for adults that meet the Food and Drug Administration (FDA) implantation criteria is usually obtainable through an often lengthy appeals process. Arizona and Utah are but two States in which Medicaid administrative hearing officers have required coverage of cochlear implants for adults. Federal laws such as the Americans with Disabilities Act (ADA) and Section 504 of the Rehabilitation Act of 1973 apply to Medicaid. As with EPSDT, these laws do not permit States to deprive a hearing-impaired person of their only opportunity to hear without showing a threat to the solvency of the program or a lack of clinical effectiveness for the procedure. Furthermore, States are also not permitted to impose artificial age limitations on services that are not based on medical need. If the State Plan specifically includes cochlear implant services as a covered benefit for children under age 21, then it cannot deny benefits for adults age 21 or older because there is no clinical basis for an age limit of 21 years on cochlear implant services. See Salgado v. Kirschner, Director of the Arizona Health Care Cost Containment System. 878 P.2d 659 (Supreme Court of Arizona, 1994). Such an artificial exclusion for adults would also violate Section 504 of the Rehabilitation Act of 1973 (also 45 CFR §84.52(a)(1)). For this reason, States like Utah explicitly do not include cochlear implants in its State Plan for children, and simply state that they will cover them through EPSDT. Payment amounts Payment under Medicaid must be at least sufficient to ensure access to cochlear implant services for Medicaid beneficiaries. However, research by both RAND Corporation and Hear US finally documented what cochlear implant professionals have acknowledged for years—many Medicaid beneficiaries cannot get a cochlear implant because providers will lose money furnishing services to them. Medicaid regulations at 42 CFR §447.15 require that any Medicaid-enrolled provider must accept Medicaid payment as payment in full. It is illegal for a hospital, surgeon, or audiologist to accept money from outside entities to supplement the amount that Medicaid pays. In many cases, the provider is not willing or able to do so. Even if the cochlear implant device fails, an outside entity such as the manufacturer cannot reimburse the center for non-warranty costs that are not reimbursed by Medicaid (see Fraud and Abuse). Hear US estimates that in the next four years cochlear implant centers will lose over $17.7 million if Medicaid reimbursement does not improve. The result of these losses is that smaller hospitals in less urban parts of the country often cannot afford to accept Medicaid beneficiaries. As with Medicare, payment for outpatient cochlear implant surgeries is generally much higher under Medicaid programs than for inpatient surgeries. Hear US reports that the outpatient average payment amount totaled $21,788, more than $3,500 less than the roughly $25,000 average cost for just the surgical procedure (excluding post-operative services and hospital mark-ups on the device). On the inpatient side, the average reimbursement was $15,697, forcing hospitals to lose an average of over $9,500 for every Medicaid surgery. For all surgeries, hospitals lose an average of roughly $6,000 for each Medicaid beneficiary, and during the period from 1996 to 2000, Hear US reports that the average loss for the approximately 200 active cochlear implant centers was nearly $10 million. While these national averages are slightly better than Medicare reimbursement for cochlear implants, Medicaid reimbursement in certain States is far lower. The average is skewed by a handful of States with very good reimbursement policies. 14 States reimbursed at least $25,000 or higher for the outpatient surgical procedure (five States for the inpatient side), with States such as Iowa, New Jersey, New York, and Wisconsin traditionally leading the way. However, of the 29 States responding to the Hear US survey, over 55 percent reimbursed less than 60 percent of the total $25,000 cost for inpatient surgeries, with five States (Alabama, Alaska, Arkansas, Connecticut, and Idaho) reimbursing less than $2,000 or eight percent. In fact the State of Arkansas reimburses less than $750 of the entire $25,000 price tag for both inpatient and outpatient procedures. This is largely due to the fact that many Medicaid programs default to Medicare policies (although they are under no obligation to do so.) The Hear US survey results identify inpatient and outpatient payment levels for cochlear implant services among different States. Federal and State governments spent over $180 billion for Medicaid services in 1999, or about $3,500 per beneficiary. Disabled persons constitute over 18 percent of Medicaid enrollees, with an average cost of about $8,600 per person. While 51 percent of Medicaid enrollees are children, nursing home care consumes the greatest percentage of the Medicaid budget in every State (Medicaid pays for 45 percent of all nursing home care nationwide.) Most Medicaid programs now maintain websites from which you can download up-to-date fee schedule payment amounts for cochlear implant services. Some may be viewed by clicking here. A complete list of Medicaid websites can be viewed at http://medicaid.aphsa.org. For questions about specific Medicaid payment for cochlear implant services in your State, contact your local cochlear implant center or reimburse@cochlear.org State Medicaid programs generally use the same billing codes as Medicare and other health plans. However, California and a handful of other States currently do use their own Level III HCPCS or "local" codes. This practice will eliminated after December 31, 2003 with the standardized claim formats required by the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Cochlear implant manufacturers and centers generally have shown little interest in assisting centers with Medicaid coverage problems. This is because if they furnish services to a Medicaid beneficiary they are required to accept "payment in full" and as cited above, payment levels in many States are very low. However, in States with adequate payment amounts, manufacturers have agreed to enroll as a Medicaid provider and receive payment directly from Medicaid. For example, Cochlear Corporation is a Medicaid provider in Florida and Nebraska, while Advanced Bionics Corporation is reported to be a Medicaid provider in Louisiana. Medicaid and Managed Care Over 56 percent of Medicaid beneficiaries are now enrolled in managed care plans. All States (except for Alaska and Wyoming) require at least some beneficiaries to enroll in managed care plans, and the percentage of managed care enrollment exceeding 75 percent in 14 States. 19 States have obtained Federal Section 1115 waviers that permit them to implement mandatory managed care enrollment statewide as part of a demonstration project. This includes the States of Arizona and Tennessee that enroll all but their long-term care beneficiaries in managed care. Medicaid and the Disabled About 20 percent of the 25 million non-elderly disabled persons in the United States are covered under Medicaid. This number jumps to 30 percent for chronically disabled children. Even though Medicaid covers such a large percentage of these disabled persons, about 3.6 million have incomes that are too high to qualify for Medicaid, yet are not able to secure other insurance. Disabled Medicaid beneficiaries are very costly to serve. The only account for 17 percent of all beneficiaries,but 40 percent of all Medicaid spending. In 1998, all Medicaid programs spent over 500 percent more per capita on disabled beneficiaries ($9,558 compared to $1,558). As a result, most States try to enroll persons with disabilities in managed care plans. Disabled beneficiaries make up over 12 percent of all Medicaid managed care enrollment. And over 25 percent of all disabled beneficiaries were enrolled in managed care in 1998. This figure exceeded 75 percent in six States (Arizona, Maryland, New Mexico, Oregon, South Dakota, and Tennessee). Because the majority of Medicaid managed care plans are reimbursed a flat, capitated rate regardless of the costs they incur on their patients, there is great concern that disabled beneficiaires (especially those require expesnive high-technology items like cochlear implants) will be discriminated against and not receive the amount or quality of care they need. This has been evidenced in several States including Arizona and Tennessee, where plans have attempted to deny cochlear implants altogether, or reimburse so low that providers will not perform the surgery. Consequently, 15 States do not enroll disabled persons in managed care plans. In fact, Minnesota and Washington moved disabled beneficiaries out of managed care plans and back into traditional fee-for-service Medicaid. And four other States (Indiana, Michigan, Ohio, Wisconsin) and the District of Columbia enroll persons with disablities in plans designed exclusively for persons with special needs. Medicaid managed care and disability data provided courtesy of the Kaiser Family Foundation. |
|
||||||||||||||||||
