Payment Under Public and Private Insurance and Access to Cochlear Implants

by Steven Garber, M. Susan Ridgely, Melissa A. Bradley, Kenley W. Chin

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Cochlear implants are expensive, yet often cost-effective. However, among hundreds of thousands of potential U.S. candidates, only about 3000 received implants in 1999. To analyze whether insurance reimbursement levels may contribute to low access rates, surveys were performed during 1999 and 2000 of physicians and audiologists at clinics providing cochlear implant services, selected hospitals where surgery is performed, and state Medicaid agencies. Secondary data was obtained on Medicare payment rates and hourly incomes of otolaryngologists and audiologists. Participants included one hundred thirty-one physicians (response rate 67.9%), 111 audiologists (74.0%), 60 hospitals (73.2%), and 44 Medicaid agencies (86.3%). Outcome measurements included reimbursement rates for selected Current Procedural Terminology codes and for cochlear implant systems (devices); time required to perform services; additional time not reimbursed; and device purchase prices. The authors found that Medicare and Medicaid and payment rates often fail to cover costs of aural rehabilitation. Medicare sometimes and Medicaid often fails to cover surgeon costs. Sometimes private insurance does not cover hospitals’ device costs. Under Medicare, in 1999 hospitals lost more than $10000 per device for inpatient surgery and about $5000 per device for each outpatient surgery. Device reimbursement in 2002 for outpatient surgery under Medicare is about $3773 higher than in 1999. Medicaid device payment policies vary greatly and fail to cover costs in at least 18 states, accounting for 44% of national Medicaid enrollment. The authors concludes that efforts to expand access to cochlear implants may be impeded by financial incentives. Facilitating access for Medicare and Medicaid patients could require changes in payment policies.

Originally published in: Archives of Otolaryngology, Head and Neck Surgery, Vol. 128, October 2002, pp. 1145-1152.

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