Tuesday, December 29, 2015

Do Insurance Companies Determine Unreasonable Rates For Cochlear Implant Equipment?

By Eric Sherman

When your cochlear implant equipment is out of manufacturer’s warranty period and you need a new sound cable, headpiece (coil) or processor, often people will go through their health insurance to help cover part of the cost.  Not all health insurance is the same, so be aware as your insurance company might reimburse you for less than you expect. This was the case with us when we purchased a CI sound cable for $125.00 and the insurance reimbursed us $5.81, less than 10% of the cost.
 
Cochlear Implant Sound Cord
After receiving our reimbursement check and Explanation of Benefits (EOB), we noticed the “Allowable Amount” (the amount the insurance company will pay for service or medical equipment) was substantially less than the cost of the equipment ($125.00 compared to their allowable amount of $11.62).

When inquiring about the allowable amount and how it was derived, the insurance company’s own definitions, terminologies and explanation were as confusing, ambiguous and misleading as credit card offers you receive in the mail.  Under “medical supplies, equipment and footwear benefits” in our plan it stated our responsibility is “all charges in excess of 50% of the Negotiated Fee Rates,” for non-participating providers.  The negotiated fee rate is the rate negotiated for in-network providers and is synonymous with “allowable amounts.”   Our implant manufacturer is not a participating provider, but we received an in-network provider waiver, meaning we would receive the in-network rate (60% coverage based on our plan).

Here is the problem with cochlear implant equipment; it is proprietary to each manufacturer’s device.  Parts cannot be mixed and matched between manufacturers.  Finding a compatible sound cable at the cost of $11.62 is not possible.  In our grievance filed with state regulators, we argued this point and requested the insurance company explain their methodology in how they derived at $11.36, in this instance, to determine their allowable amount.

Based on the definition outlined in our policy, we reasonably believed that the insurance company would cover 60% of the cost of the sound cord.  The insurance company responded to our inquiry and grievance describing five different methods of determining allowable amounts and none of it made sense in relationship to our claim. In some instances, their explanation directly contradicted what was outlined in our policy.  Eventually, the insurance company claimed the amount was determined by a “customary and reasonable rate of reimbursement and not at billed charges.”

A "customary and reasonable" is a term used by insurance companies to cap their exposure on certain medical equipment and procedures. Paying less than 10% of the billed amount didn’t seem to be reasonable.   The insurance company refused to divulge the methodology used to determine what was customary and reasonable and thus settled on the rate of $11.62.  Under this terminology, insurance companies decide the rate they will pay. 

In the end, state regulators didn’t have the legal authority to compel the insurance company to reveal how they came up with their rates. An adjustment was made to our claim and the rationale behind the adjustment was equally confusing.  We were reimbursed more on our claim, but the amount was substantially less than what was billed.  

Clearly, the power in the health care industry lies with the insurance companies and not the consumer. Right now is open enrollment for health care insurance (it’s the law, you must have health insurance).  If you are looking for a new health care plan, you may want to contact the insurance provider you’re considering to find out their coverage on your cochlear implant equipment.  (Here are links to billing codes for different cochlear implant manufacturers Advanced Bionics, Cochlear, Med El).

Final thought, be an informed voter when it comes to your health care.  Avoid the temptation of negative ads and political bias.  Unfortunately, in our state, the voters missed an opportunity to gain more control over their health care.  The insurance companies ran a huge negative ad campaign with no opposition which helped defeat a health care proposition.  The bill would have helped make health care costs more transparent.

More about Ci Wear
Ci Wear is a patent pending shirt designed for cochlear implant processors and other listening device.  Use as an exercise shirt, rash guard or swim shirt during sports activities. The shirts have pockets that add a layer of security to your device. Made in the USA and sells direct to consumers via online store.  Shop at www.Ciwear.com. 


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