Putting Unbundled Pricing into Action in a Medical Audiology Practice

An Interview with Dr. Meagan P. Lewis of Wake Forest University Hospital

A 2014 survey1 published by the American Speech-Hearing and Language association indicated the three-quarters of audiologists worked in healthcare settings, with 25.1% employed in a hospital and 47.3% working in nonresidential health care facilities, such as private physicians’ or audiologists’ offices. Given the large number of audiologists working in medical settings, it’s imperative they stay current in their credentialing, coding and billing practices.

One important aspect of administrating an audiology practice within a medical setting is setting fees. As many readers know, historically, audiologists have included several components, including device, service and fitting fees into a single price charged to the patient (or third-party payer). For a variety of reasons, including the rise of Medicare Advantage programs and looming over-the-counter hearing aid purchases, audiologists are exploring alternatives to the traditional bundled pricing model.

Transitioning from a bundled pricing model to one that unbundles fees for individual services can be risky. For the consumer an unbundled model adds complexity to the transaction. In addition to adding more choices, which can be overwhelming for some consumers, an unbundled model has the potential to incentivize individuals to not get the follow-up care they might need. After all, who doesn’t want to save money or avoid what may seem like unnecessary visits to the clinic.

For the clinic, switching to an unbundled pricing model has the very real potential of losing money for the practice. In almost any unbundled pricing scenario, patients are pre-paying for service that is rendered over several years. In the unbundled pricing model, the relatively large margins associated with the initial hearing aid transaction is narrowed, and the practice counts on making up the reduced margins, paid upfront, with a smaller, incremental stream of revenue tied to the follow-up visits over many years. For an unbundled model to yield revenue like the traditional bundled model, the practice needs patients to attend all their scheduled follow-up appointments over the course of several years. These follow-up appointments are usually scheduled every six months, and in a completely unbundled model, a fee would be associated with them.

Practices can very easily begin to lose money when they unbundle because it is extremely difficult to make up all the initial pre-paid revenue generated in the bundled model with incremental revenue over time. Many patients, for a variety of reasons, simply do not maintain a regimented follow-up schedule in which they are expected to pay for the services in a more piecemeal fashion.

Dr. Meagan Lewis, director of audiology at Wake Forest University Hospital, has managed to strike a balance in the way her clinic unbundles fees. She keeps it relatively simple for patients while simultaneously charging fees for services that stand-alone for the use of hearing devices. In her approach she has managed to strike this balance by accounting for the office culture of her clinic and focusing on the transactional aspects of a fee-for-service program that attempts to maintain a healthy profit margin for the business.

BT: Could you share with us why Wake Forest Audiology started to unbundle?

ML: There are many reasons-both external and internal factors. Some of the biggest drivers were external, including recent legislation officially introducing over-the-counter hearing aids and more and more PSAP type devices. There was discussion among our staff about why patients would seek our services versus other devices that could buy without seeing an audiologist. Our staff wrestled with the idea of what differentiates us from our competition. Our team agreed that we should be perceived as more than sellers of a device. To do that, we agreed that we needed to spend more time discussing the services that we provide and the benefit of those services to the patient. The collective “we” have spent years discussing the newest technology but not necessarily how the professional optimizes that technology to improve patient satisfaction.

BT: It sounds like you conducted some strategic planning into unbundling and you started by thinking about the office culture. How did you go about doing this?

ML: It may seem as though the change to itemization should be simple- you just break out your services, right? But it is actually a shift in mindset. As our staff discussed the driving factors behind change (change nationally as well as in our clinic) we wanted to be perceived as the professionals that individuals on our community seek to improve their hearing, not the place they can buy a device.

We started with a task force charged with providing a best practice protocol for fitting adult hearing aid patients. The group was comprised of seven of our audiologist, who mainly see adult patients. There was a round of healthy, sometimes lively discussion regarding what should comprise a hearing aid consult, a fitting, and a follow-up. Each person was then assigned a topic to research and report back to the group. We surveyed hearing aid literature in peer reviewed journals and clinical guidelines offered by AAA.

BT: Sounds like a relatively long and exhaustive process. How long did this take?

ML: Much discussion centered around our clinical protocol for adults. While everyone agreed, for example, that there was compelling evidence to perform Real Ear measures on the date of the fitting for every patient, there was concern about cognitive screening and less compelling evidence to perform the screen effectively and what to do with the data.

Also, our team felt that, based on best practice clinical guidelines there were some procedures that they would not feel ethically that they could omit- for example, verification procedures using Real Ear on the day of the fitting. As a result, our itemized model is somewhat hybridized. The consultation, fitting and follow-up is priced, but procedures after that time are itemized. We do share the itemized pricing with patients during the consult to discuss the importance of the care they are receiving as well as some of the science behind the procedures we are doing. Again, the emphasis is less on the product and more on the service.

BT: What best practices did the audiologists agree to do?

ML: Rather than talk about the procedures, let me share with you a docket of all the components of a hearing consultation. On the next page, in outline form (so it is easy to read), is a breakdown of professional services we agreed as a team provide at Wake Forest University Hospital.

  • Hearing Abilities Questionnaire: Download [PDF]
  • Considerations for Choosing a Hearing Aid: Download [PDF]
  • COSI (note if patient participated, or communication partner was involved)
  • QuickSin (speech-in-noise testing)
  • UCLs/-MCLs
  • Co-occurring activity limitations and participation restrictions – i.e.., previous medical determination of cognitive challenges refer to medical record (patient or family report) and discuss/ potential usage of MOCA (cognitive assessment) developed for patients with hearing loss
  • Selection of Hearing Aids
  • Purchase Agreement Reviewed and Signed (complete model to be ordered and accessories)
  • Ear Impressions, if indicated
  • Cerumen Removal before ear impression, if needed
  • ElectroAcoustic verification of Aid in the Test Box upon arrival
  1. Otoscopy- Cerumen Removal if needed
    -Hearing Aid Orientation Checklist: Download [PDF]
  3. VERIFICATION (Electroacoustic Analysis for ANSI compliance)
    -Probe Microphone Verification (Speech Mapping)
III. HEARING AID FOLLOW-UP (fine-tuning and validating benefit)
  1. Make adjustments as needed based on patient/family input
  1. Make adjustments/modifications as needed
  1. Assess and adjust as needed
  2. Add telecoil or phone program if needed and adjust
  3. Discuss communication strategies and any recommended accessories or assistive devices
  1. Discuss services available under warranty
  2. Review cleaning of aid and changing wax guards
A. Every 6 months for check of ear mold tubing/mic filters/domes/earhook filters/retention locks/wax traps.
B. Annual Communication check with dispensing audiologist:
  1. Ask about overall hearing status- is hearing evaluation needed?
  2. Check ears for irritation or wax accumulation- remove wax if possible or recommended wax removal
  3. Ask about benefit/comfort of hearing aids in patient’s different listening situations
  4. Ask about telephone ease or difficulty
  5. Adjust hearing aids/create new programs/suggest assistive devices/discuss communication strategies
  6. Clean hearing aids- biologic check and electroacoustic check
  7. In warranty clean and check of aids

BT: Let’s shift gears a little and examine the creation of a bill of services (aka super bill). What services and accompanying codes could be added to a super bill, if a clinic was interested in unbundling their hearing aid service fees?

ML: I would encourage anyone interested in unbundling to take a look at the CPT/HCPCS service codes that are the most commonly used to represent hearing aid services. For example, many of these procedures used during a hearing aid consultation are reimbursable, by either the patient or the third-party payer, when the following codes are used:
  • Hearing aid evaluation and selection = 92590/1 or V5010. This is typically covered if the patient has a hearing aid benefit; otherwise this can be bundled into the cost of the hearing aid and/or is the financial responsibility of the patient.
  • Earmold impression, each (if applicable) = V5275. This is typically covered if the patient has a hearing aid benefit; otherwise this can be bundled into the cost of the hearing aid and/or is the financial responsibility of the patient.
  • Communication needs assessment and other questionnaires or inventories that evaluate satisfaction, motivation and perceived hearing handicap (e.g., COSI, HHIE, IOI-HA and/or ECHO = 92626). This is the financial responsibility of the patient; if this took less than 30 minutes of testing, add the -52 modifier to indicate a reduced service.
  • Speech-in-Noise tests (e.g., Quick-SIN and/or HINT) included in 92626. This is paid privately by the patient; if testing took less than 30 minutes to conduct, add the -52 modifier to indicate a reduced service.
I probably don’t have to remind audiologists that is very important to read and analyze each individual third-party payer contract and its associated fee schedule with the payer, specific codes or families of codes that are not mentioned or listed in the contract or fee schedule. Each third-party payer addresses the hearing aid process differently. There are several possible codes that can be used to bill for various tests and procedures that might be conducted during the hearing aid fitting appointment, such as:
  • Electroacoustic analysis = 92594/5. Directional microphone test included in 92594/5. This code is typically covered if the patient has a hearing aid benefit; otherwise it can be bundled into the cost of the hearing aid and/or is the financial responsibility of the patient.
  • Fitting and orientation = V5011. This code is typically covered if the patient has a hearing aid benefit; otherwise it can be bundled into the cost of the aid or is the financial responsibility of the patient.
  • Dispensing fee = V5190-. Aided loudness testing is included in V5020. This is often covered if the patient has a hearing aid benefit; otherwise it can be bundled into the cost of the hearing aid and/or is the financial responsibility of the patient.
  • Probe microphone verification = V5020. Aided loudness testing included is included in V5020. This is typically covered if the patient has a hearing aid benefit; otherwise it is bundled into the cost of the hearing aid and/or is the financial responsibility of the patient.
  • Earmold, custom, each (if applicable) = V5264. This is typically covered if the patient has a hearing aid benefit; otherwise it is bundled into the cost of the heairng aid and/or is the financial responsibility of the patient.
  • Mold/insert/dome, each (if applicable) = V5265. This is typically covered if the patient has a hearing aid benefit; otherwise it is bundled into the cost of the hearing aid and/or is the financial responsibility of the patient.
  • Battery, each = V5266. This is typically covered if the patient has a hearing aid benefit; otherwise it is bundled into the cost of the hearing aid or the financial responsibility of the patient.
  • Hearing aid supply or accessory, each = V5267. This is typically the financial responsibility of the patient unless specifically covered by the third-party payer.
  • Hearing aid check = 92592/3 or V5011. This is typically covered if the patient has a hearing aid benefit and the benefit has not been exhausted at the hearing aid fitting; otherwise it can be bundled into the cost of the hearing aid and/or is the financial responsibility of the patient.
BT: Could you provide some insights on calculating your revenue per hour, a critical number if you want to start changing a fee for specific services?

ML: We began with our overall cost of business per hour (audiologist salary, benefits, time off, overhead) and then the amount of time each procedure was estimated to take, for example, 15 minutes to clean a hearing aid. The average cost per hour was divided by the time per procedure. Each procedure is assigned a standard amount of time, 15 minutes, 30 minutes, 60 minutes or longer. (For more details on calculating revenue per hour values, see Taylor & Zelski in March 2018 issue of Audiology Practices).

Once we calculated a revenue per hour number, we looked at the average number of visits for returning patients (looked at all audiologists and averaged the number of follow-ups by patients) We then took our hourly rate and multiplied by that number of visits over the course of one year, 3 years, or 5 years.

BT: When you mention multiplying the number of visits over 3 to 5 years, are you referring to patients who purchase hearing aids?

ML: Yes, instead of one bundled fee, the idea is to estimate how much time they will come back for follow-up care and charge accordingly.

BT: One last question. I am curious. How do you talk about service packages with patients who might be conditioned to pay a bundled rate for unlimited service over a period of 2 to 3 years?

ML: For many patients, it is the discussion that after their initial 45 days they do not need as much service as they did immediately after fitting and that if they return once a year they will be charged for a clean/check and maybe a conformity/adjustment charge. However, if they anticipate that they will want to return more frequently for cleaning or program changes they would perhaps want a service package. It is interesting to note that over the past year we have only had three people purchase service packages.

BT: Any final words of advice on unbundling?

ML: In a changing healthcare environment, the delivery of service is changing. For our practice, that means adjusting to meet the needs of the patient at whatever stage of the process they find themselves. For example if a patient comes in with an OTC being able to appropriately and fairly charge to tell them what they are and are not receiving from the device. It also means improved portability of care for patients who may have moved to the area with existing devices. While there may be some patients who come back less often for follow-up, the itemized model also means that patients will not fill your schedule with unnecessary visits, maximizing your time with patients who may need evaluations or new devices. We want to touch base with our patients- when they need it- not to scheduled them for unnecessary follow-up. While it is a diversion from our traditional service model to charge for repairs and follow-up after the warranty period, it often saves the patient in the long run.    
Meagan P. Lewis, Au.D. is Director of Audiology in the Department of Otolaryngology Head and Neck Surgery at Wake Forest University Hospital. She can be contacted at melewis@wakehealth.edu.
Where Do Audiologists and Speech-Language Pathologists Work?
The ASHA Leader, May 2014, Vol. 19, 24. doi:10.1044/leader.AAG.19052014.24