Coding Frequently Asked Questions (FAQs)

Authors: Deb Abel, Au.D. and Kim Cavitt, Au.D.

What is Medical Necessity and Is It Required by All Payers, Not Just Medicare?
Yes, medical necessity is required by Medicare (see below) and most third party payers and it must be clearly documented in the medical record. While many practices have a clinical test protocol where the audiologist performs specific procedures for each patient regardless of their individual symptoms and complaints, this practice could likely invite an audit. Each individual test performed must be medically necessary for that specific patient. The presence of a physician order DOES NOT guarantee medical necessity. The rendering provider, which is the audiologist on Medicare claims, is responsible for documenting medical necessity.

Medical necessity is defined in Title XVIII of the Social Security Act, section 1862 (a)(1)(a):

“Notwithstanding any other provisions of this title, no payment may be made under Part A or Part B for any expenses incurred for items or services, which are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.”

The Medicare Benefit Policy Manual, Chapter 15, page 101, defines medical necessity as:

“Coverage and, therefore, payment for audiological diagnostic tests is determined by the reason the tests were performed, rather than by the diagnosis or the patient’s condition. Under any Medicare payment system, payment for audiological diagnostic tests is not allowed by virtue of their exclusion from coverage in section 1862(a)(7) of the Social Security Act when:

  • The type and severity of the current hearing, tinnitus or balance status needed to determine the appropriate medical or surgical treatment is known to the physician before the test; or
  • The test was ordered for the specific purpose of fitting or modifying a hearing aid.
Payment of audiological diagnostic tests is allowed for other reasons and is not limited, for example, by:
  • Any information resulting from the test, for example:
    • Confirmation of a prior diagnosis;
    • Post-evaluation diagnoses; or
    • Treatment provided after diagnosis, including hearing aids, or
  • The type of evaluation or treatment the physician anticipates before the diagnostic test; or
  • Timing of reevaluation. Reevaluation is appropriate at a schedule dictated by the ordering physician when the information provided by the diagnostic test is required, for example, to determine changes in hearing, to evaluate the appropriate medical or surgical treatment or to evaluate the results of treatment. For example, reevaluation may be appropriate, even when the evaluation was recent, in cases where the hearing loss, balance, or tinnitus may be progressive or fluctuating, the patient or caregiver complains of new symptoms, or treatment (such as medication or surgery) may have changed the patient’s audiological condition with or without awareness by the patient.
Examples of appropriate reasons for ordering audiological diagnostic tests that could be covered include, but are not limited to:
  • Evaluation of suspected change in hearing, tinnitus, or balance;
  • Evaluation of the cause of disorders of hearing, tinnitus, or balance;
  • Determination of the effect of medication, surgery, or other treatment;
  • Reevaluation to follow-up changes in hearing, tinnitus, or balance that may be caused by established diagnoses that place the patient at probable risk for a change in status including, but not limited to: otosclerosis, atelectatic tympanic membrane, tympanosclerosis, cholesteatoma, resolving middle ear infection, Meniére’s disease, sudden idiopathic sensorineural hearing loss, autoimmune inner ear disease, acoustic neuroma, demyelinating diseases, ototoxicity secondary to medications, or genetic vascular and viral conditions;
  • Failure of a screening test (although the screening test is not covered);
  • Diagnostic analysis of cochlear or brainstem implant and programming; and
  • Audiology diagnostic tests before and periodically after implantation of auditory prosthetic devices.”
Who Determines Medical Necessity for Medicaid and Private Insurance Plans?
Medical necessity and/or what constitutes being “medically reasonable or necessary” is outlined in the provider contractual agreement and/or the provider manual of every payer source. It can and does vary payer to payer.

That being said, if an audiologist follows the Medicare guidance, they would typically meet the medical necessity requirements of Medicaid and other private insurers.

What Are the Specific Requirements When Performing and Billing for Otoacoustic Emissions (OAEs)?
Otoacoustic emissions are not warranted in every test scenario. The rendering provider must be able to document that the otoacoustic emissions are medically necessary for this specific patient.

CPT code 92587, distortion product OAEs, limited evaluation (to confirm the presence or absence of hearing disorder, 3-6 frequencies) or TEOAEs, with interpretation and report, is to be utilized when testing TEOAEs and for DPOAES, an identifiable data point at each of the 3-6 frequencies tested. You must perform 3-11 frequencies in both the right and left ears in order to bill this code as well as interpret the results of the test and include a report in the patient’s record. The interpretation cannot be merely a “pass/fail” but, instead, must clearly document the ear and frequency specific test results.

CPT code 92588, Comprehensive diagnostic evaluation (cochlear mapping, minimum of 12 frequencies), with report, is a much more extensive test that involves at least 12 frequencies in the right ear and 12 in the left and the interpretation of the test and the report in the patient’s record. This test is indicated but not limited to baseline and cochlear ototoxicity monitoring, cochlear mapping, to verify cochlear vs. non-cochlear function, and to verify functional hearing loss.

Are Acoustic Reflex Thresholds Required to be Performed Ipsilateral and Contralateral for CPT Codes 92550 and 92570?
Yes. To legitimately receive payment for acoustic reflex testing, the audiologist must perform contralateral and bilateral reflexes at 500, 1000, 2000 and 4000 Hz and for ipsilateral and bilateral reflexes, 500, 1000 and 2000 Hz and obtain thresholds for a total of 14 reflex thresholds; 4 right contralateral, 4 left contralateral, 3 right ipsilateral and 3 left ipsilateral. If you are only performing ipsilateral reflexes, you must append the -52 modifier to indicate reduced services as not all of the reflexes noted are being completed. Payers do not cover the 1000Hz acoustic reflex screening that some tympanometers are capable of performing.

Also, as noted above, acoustic reflex threshold testing is not warranted in every test scenario. The rendering provider must be able to document that the acoustic reflex threshold testing is medically necessary for this specific patient.    
As Manager of Audigy Coding and Contracting Services, Dr. Debbie Abel provides Audigy members her expertise in navigating one of the U.S. healthcare industry’s most difficult to understand aspects: The world of Medicare, coding, reimbursement, third party contracts and compliance. After years of committee work at the American Academy of Audiology (AAA), Abel naturally gravitated to the world of coding and billing and was staff at AAA prior to her time at Audigy. Dr. Abel possesses highly specialized expertise in this area and assists Audigy practices with navigating the intricacies in audiology coding and payments in order to optimize revenue.

Dr. Kim Cavitt was a clinical audiologist and preceptor at The Ohio State University and Northwestern University for the first ten years of her career. Since 2001, Dr. Cavitt has operated her own Audiology consulting firm, Audiology Resources, Inc. She currently serves on the State of Illinois Speech Pathology and Audiology Licensure Board. She also serves on committees through AAA and ASHA and is an Adjunct Lecturer at Northwestern University.