the basics of HCPCS

HCPCS is the acronym for HCFA (Health Care Financing Administration), a Common Procedure Coding System. This system is used to bill specific procedures, services, and supplies that are not defined or outlined in the CPT coding system.

HCPCS codes are used by hearing healthcare providers to bill hearing aids and supplies to third party payers. The insurance carrier will specify if they want a bundled or unbundled hearing aid price package. HCPCS codes consist of a letter followed by four digits. Hearing services are classified as a V followed by the number 5000-5999. Cochlear implants, bone anchored hearing aids and their supplies are often classified for third party payers by an L code followed by four digits.

HCPCS coding changed markedly in 2002; therefore, it is highly recommended for healthcare professionals use the latest HCPCS reference book, available for purchase on the AMA website.

HCPCS TIPS: DO's & DONT'S

• In order to use HCPCS codes for hearing aid billing, practices must create an unbundled hearing aid cost package.
• Do not forget to bill for the hearing aid itself (please consult the HCPCS codes to find the code that best describes the hearing aid scenario), the conformity evaluation (V5020), the fitting/orientation/checking of hearing aid (V5011), the assessment for hearing aid (V5010) and batteries (V5266), as well as the aid itself, any earmolds (V5264), the earmold impression (V5275) and the dispensing fee (V5241 or V5160).
• Unless restricted by a contractual obligation which requires an actual manufacturer’s invoice cost, bill insurance companies for the single-unit price of the hearing aid rather than any discounted price. The insurance plan should not get the benefit of a provider’s volume discount; it will also increase the audiologist’s profit margin.
• Contact the insurance company, prior to seeing the patient to determine coverage and amounts.
  • 99% of the time insurance carriers do not cover 100% of the cost of binaural, digital hearing aids; if an insurance carrier will not provide you with a benefit amount, assume the maximum benefit amount is $500 per ear.
  • Implantable hearing aids are typically non-covered.
• It is essential to perform an insurance verification; create a standard form.
• Contact the insurance carrier to determine if the specific carrier wants you to use the CPT code (i.e. 92590) or the HCPCS code (i.e. V5010) when there is a CPT code and HCPCS code that cover the same service.
• It is very important to ask if you can balance bill the patient the difference between the insurance coverage amount and your usual and customary fee for the specific hearing aid. (Never provide a discount to any patient who is accessing an insurance benefit.) If you can balance bill, do not worry about determining a specific coverage amount from the carrier; instead, ask the patient pay the difference between $500 per ear (based on an historical review of insurance coverage amounts) or the coverage amount specified by the insurance carrier during the insurance verification process and your usual and customary charge for the hearing aid(s). This amount should be paid at the date of fitting. If the insurance carrier pays more than previously noted, promptly refund the patient the difference.
• If you cannot balance bill the patient, be aware of your wholesale cost of the hearing aid(s) fitted so that you do not end up in a negative revenue situation with a capped reimbursement amount. Consider restricting the product offered to the patient for the sake of prudent business practices. In these cases, also ask if the hearing aid evaluation, dispensing fee, earmold, conformity evaluation, and fitting and orientation are paid separately.
• If you are contractually prohibited from balance billing the patient, you should consider restricting the level and price of the product(s) offered to the patient in order to keep from incurring a loss. See examples below: EXAMPLE (unrestricted hearing aid cost) Hearing Aid Benefit (no balance billing allowed) Wholesale cost of hearing aid fit Net revenue to the practice before overhead $900.00 $1000.00 $100.00

Note: The dollar amounts in the above examples are for illustration of the concept only and not necessarily representative of any industry standard.

• If a patient wants to waive his/her insurance coverage, you must have them sign an insurance waiver indicating they are waiving their insurance coverage. The insurance waiver also indicates that they are responsible for payment in full and that you will not be submitting a claim to their carrier. An insurance waiver should be created specifically for your practice and its unique needs.
• As of December 2005, Medicare covers bone anchored hearing aids as long as they meet the Medicare criteria for coverage. Contact Cochlear Corporation, the manufacturer of the BAHA, at 1-800-523-5798 for more information or for billing assistance. They provide billing assistance free of charge to all of their clients .through Otologic Management.
• Bill of Sale must be up to date and legal for the state in which you practice. Do not have any insurance coverage amounts reflected on the bill of sale. Only apply the usual and customary charge, less any adjustments, such as deposits, discounts or trade-in allowances. For updates to state law, contact your state’s licensing board.
• Be familiar with the terms of the managed care contracts you have signed so you can determine if you are contractually allowed to balance-bill the patient if they opt for more advanced hearing aids. (Balance-bill refers to billing the patient for the difference between their insurance coverage and your office’s usual and customary fee for the hearing aid they have selected.)
• If the coverage sounds too good to be true, it probably is!
• A pre-determination letter is never a bad idea when dealing with hearing aids in a managed care environment.

If you have any specific questions, visit the reimbursement forum or send an e-mail to the ADA Help Desk.

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