Hearing professionals who need to remain profitable can’t overlook the impact Third Party-Hearing Aid Profit Programs (HABPs) can have on their business. In today’s market, one in five patients get their hearing aid through a Medicare Advantage plan administered by an HABP, a number that can proceed to grow because the baby-boomer generation ages into Medicare eligibility.
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www.shutterstock.com. Medicare, Medicare Advantage, Hearing Aid Profit Programs, HABPs, private-pay patient.
While Medicare Advantage provides patients with access to hearing aids, it deprioritizes the standard of prolonged clinical services while limiting audiologist flexibility for services and products. The result’s that the hearing skilled earns substantially less per Medicare Advantage patient in comparison with a private-pay patient. As well as, the patient doesn’t reap the substantial advantages of the Continuum of Care model.
Nevertheless, lower contracted reimbursement rates are usually not the tip of quality service. Hearing professionals can take several steps to proceed to supply a high level of service, combat declining revenue because of HABP contracts, find solid financial footing, and thrive in today’s shifting business landscape, all while creating good health outcomes for his or her patients.
MARKET CHANNELS ARE CHANGING
Just 31% of today’s patients receive their hearing aid via direct pay independent hearing care offices; 26% are fit through retailers, 18% through VA programs, and 22% through Medicare Advantage and Medicaid programs. In keeping with the Kaiser Family Foundation, 42% of current Medicare enrollees have a Medicare Advantage plan, and 72% of the plans have a hearing aid profit.
As well as, today’s fastest-growing channel is Managed Care. The Independent channel is the fastest shrinking.
THE RISE OF A FALSE NARRATIVE
As hearing devices have turn into available through channels outside of direct pay to a hearing care skilled, a false narrative has arisen around hearing loss treatment. This narrative purports that treating sensorineural/age-related hearing loss involves only getting a hearing test and a hearing aid. That’s since the insurance policy rarely cover other vital services, reminiscent of auditory training, ongoing hearing device services, monitoring hearing changes over time, or screening for comorbidities.
With all of the emphasis on the product and minimal attention on services, this case leaves hearing professionals wondering in the event that they’re being forced to desert the service side, which is critical to patient outcomes, patient satisfaction, and the practice’s success. To reply that query, we want to look at the Value Equation identified within the Service Profit Chain Theory.
ALTERING THE VALUE EQUATION
In keeping with the Service Profit Chain Theory developed by researchers from Harvard Business School, satisfied, loyal customers provide the “three Rs” of business profitability: Repeat business, Related purchases, and Referrals of family and friends.
Creating satisfied customers requires the Value Equation, a tool developed from the Service Profit Chain Theory, to be certain that what a business offers matches or exceeds the client’s value expectation. A consumer must consider they received an appropriate return on their investment for what they spent.
The Value Equation for a private-pay treatment plan that features hearing aids with services:
Private-pay patients incur costs directly out of pocket, they usually expect a positive end result, which incorporates a high quality product and an incredible experience (service and competence/expertise). They expect the result and end result to have a worth equal to or greater than what they paid (plus the trouble to accumulate the products and services).
However the Value Equation for the Medicare Advantage looks different: the cash portion within the denominator of the equation is an “expected value” created by the patient and never merely the “out-of-pocket” expenditure. This “expected value” or “entitlement” has been anchored in the patron’s mind by historical industry delivery models. The patient expects to get a hearing aid via the described profit, they usually expect it to work without understanding the essential services within the Continuum of Care that result in great long-term outcomes of their hearing journey. Their belief is anchored within the false narrative that hearing loss plus a hearing aid equals the very best treatment. Nevertheless, what the insurance firms contract and pay to their network of providers shouldn’t be what’s provided within the historical medical model. The HABPs most frequently pay for a test, the hearing aids, the fitting protocol, and one yr of undefined product services. Hence, the disconnect and the necessity for change.
A hearing health skilled’s clinical protocol for Medicare Advantage patients must be different due to reduced revenue, which implies they have to reduce the period of time they spend with a patient and the way and once they approach them. The patient’s expected end result and experience have to be modified in order that the Value Equation’s ratio isn’t out of balance, creating an unhappy patient. The secret is knowing the contract and educating the patient to create the suitable expectation for the Value Equation.
HEARING AID BENEFIT PROGRAM CONTRACTS
Providers need to grasp which services are and aren’t covered under their HABP contracts. Medicare Advantage insurance firms contract with the HABPs to manage hearing health advantages, but the advantages vary by plan. You need to read your provider contract and the defined plan profit.
The HABP contracts will typically cover testing, fitting, follow-up (up to a few visits), and one yr of service. While the fit and follow-up portions spell out what services are included, what’s included within the one yr of service shouldn’t be defined. HABP contracts typically don’t cover device reprogramming, receiver substitute, Redux drying, cleansing ears, HIT box testing, cognitive screening, tinnitus management, aural rehabilitation, or auditory training. Remember, it’s not what the contract pays the skilled that matters. It’s what the contract asks you to do for what they pay that matters. Don’t provide additional services outside the contracted language without charging the patient, AND don’t charge the patient for non-contracted services without properly educating them about covered versus non-covered services.
You desire to ensure the very best health end result in your patients, and the continuum of hearing services is invaluable in achieving that. You furthermore mght need to be certain that you’re doing the very best thing for your corporation by keeping your patients completely happy in order that they’ll offer you the “three Rs.” Developing a multifaceted strategy for managing HABP patients can assist you stay profitable and patient-focused.
MANAGING HABP PATIENTS
Determine Which Contracts to Participate In: You’ll be able to resolve whether or not you ought to be in a contract based on the reimbursement and what you’re required to do to get that reimbursement. Estimate how much time it is going to take for you to satisfy the necessities to receive the reimbursement. Then use this formula to find out your margin per clinical hour:
Next, compare this to the clinic’s margin per hour based on annual revenues or by comparing it to the hourly rate of other clinical services. Then resolve to be “in-network” or “out-of-network.” When reviewing your HABP contracts, bear in mind that they provide different reimbursement amounts based on the product type. Do the “margin per clinical hour” calculation for each product tier. Most practices might want to dispense advanced or premium products most continuously to take care of a healthy bottom line. That being said, there are a lot of other clinical strategies and tactics to bolster profitability.
Create a Competitive Treatment Plan “B”: Offering your clinic’s premium treatment plan, treatment plan “A,” as a substitute for an HABP profit or a big-box retail offer will be difficult due to price gap. As a substitute, a clinic can compete by making a secondary treatment plan, treatment plan “B,” that mirrors the essential services provided by the HABP and features a inexpensive, high-performing product with one yr of straightforward services.
In case your treatment plan is inside an inexpensive range of the out-of-pocket expense for the HABP, then the patient will often stay together with your clinic. Estimates of what’s “reasonable” range between $750 and $1,000. But remember, you modified the offer to a one-year service plan to be comparable to the HABP. You might have to charge or get the patient right into a service agreement after one yr, or you’re impacting the clinic’s profitability.
Educate the Patient: Create patient materials detailing what services are covered and aren’t covered by their HABP, with clear language on how they will access those non-covered services and the expected out-of-pocket expenses. Also, educate the patient about their hearing health journey, the importance of monitoring age-related hearing loss, the comorbidities they could face, and the way the medical model operates to assist manage their chronic hearing condition. Once patients understand the larger picture, they’ll be more willing to pay for essential out-of-pocket services.
Create a Superbill: A superbill should list every coded and non-coded service you provide to make sure patients understand what they’ll pay for all out-of-network items. This document shouldn’t be only essential for transparency for the patient; it’s critical for insurance compliance.
Develop a Service Contract: That is an incredible alternative to “pay-as-you-go” clinical services. List services that aren’t covered by the patient’s plan that you just’ll provide over a set timeframe, typically a two-, three-, or four-year period, for a bundled fee.
Implement a Business Strategy Based on Clinical Metrics: The next is a really loose rule of thumb for HABP participation for single provider clinics.
In case your annual clinical revenue is below $500,000 and/or your appointment schedule is just booked out for about every week, it’s good to have as many reasonable HABP contracts for your corporation as possible. Clinics on this category are in growth mode, and the HABPs can function a pipeline for brand spanking new patients, allowing them to grow revenue. Clinics can grow their private-pay patient base by leaving scheduled blocks to work in recent or existing patients in order that they don’t overfill your schedule with HABP patients. With block scheduling, you get your private-pay patients/physician referral patients in sooner, while your contracted patients might want to wait just a few extra days.
If the annual clinical revenue is $500,000 to $750,000 and your appointment schedule is booked out for about two weeks, you may be more selective about which HABPs you’ve contracts with and concentrate on growing the private-pay patient side of your corporation. Block scheduling, assigning HABP patients a selected time that’s less popular with private-pay patients, is a great strategy. Also, consider utilizing an audiology tech to offer as many services as legally possible to HABP patients to free you as much as see private-pay patients.
In case your clinic’s annual revenue is $750,000 or greater and your schedule is booked out for roughly three weeks or more, you may most definitely concentrate on private-pay patients and physician referrals only and judge to be out-of-network for the HABP contracts.
Above all else, remember which you can’t give away your services without cost and expect to stay in business. You don’t need to cut back your level of service, but you do need to teach patients and ask them to pay for non-covered services. This implies using planned materials, planned talk tracks, staff training, and good execution. Developing a solid technique to manage HABP patients effectively while still providing them with the choice of the medical model of care is essential to keeping your patients’ hearing and your practice’s funds healthy.
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