COCHLEAR IMPLANTS
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Disability Rights
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Section 3044 is the "mandatory claims submission" provision of the Medicare Carriers Manual. It states that a Medicare provider or supplier must submit a claim to Medicare on behalf of a beneficiary for any covered Part B service within one year of providing the service. According to Section 1848(g)(1) and (g)(3)of the Social Security Act It also cannot "knowingly and willfully" charge a beneficiary more than the applicable charge limits on a repeated basis. These same requirements are present in most state laws.
Repair and replacement of components and accessories for cochlear implant devices can only be performed by the device manufacturer. Therefore, for these services, the manufacturers are Medicare Part B suppliers, and must comply with these Medicare rules.
The companies must submit claims to Medicare for services it furnishes to Medicare beneficiaries. However, at least one manufacturer (Cochlear Corporation) bills the patients up-front and refuses to submit a claim to Medicare.
By refusing to submit a claim for repair and replacement services (including those under service contracts), Cochlear Corporation is routinely getting reimbursed far in excess of the Medicare allowable for these Part B covered services.
Instead of submitting a claim for each repair or replacement, Cochlear instead charge a flat fee of at least $250 from the Medicare beneficiary, even though the average cost for each repair is roughly $83. The Medicare allowable for repair and replacement of many device components (such as cables and headsets) is much less than $100. If Cochlear submitted a Medicare claim for each repair, they would roughly break even. Instead, Cochlear profits an average of $167 on each repair claim through its "flat fee" policy.
Cochlear was notified in January 1996 by the Part B carrier for Colorado (Blue Cross and Blue Shield of North Dakota) that its policy was not in compliance with Medicare requirements. Cochlear’s repair department was instructed by John Hrobsky, the Vice President of Sales to develop an hourly rate and itemized billing statement solely for Medicare beneficiaries, as required by the carrier.
However, this never happened. Cochlear is continuing its long-standing policy of charging a flat fee for all repairs, without an itemization or hourly rate. Even for non-Medicare patients, this constitutes billing for services not actually performed, which violates most state laws.
If you are a cochlear implant user requiring repair or replacement of parts for your device, you have the right to demand an itemized statement of repairs and an hourly rate. You can also demand that the manufacturer submit a claim to Medicare or any other health plan for each service performed. This limits your payment to your cost-sharing (or copayment) amount instead of a flat fee of $250 or more. There is no reason why any cochlear implant user should have to pay for repair services that were not actually performed.
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