Learn How These Entities Can Affect Your Hearing Care Practice
“My favorite part of hearing care is navigating insurance issues!”
You’ve probably never heard that from a fellow hearing care provider. And with the rise of different middlemen — insurance brokers, third-party administrators, and more — navigating the maze of coverage options, pre-authorizations, and reimbursements seems increasingly complicated.
How do you make sure to get what you’re owed in today’s hearing care space? A big part of that involves understanding private pay, third-party payers (TPPs), and third-party administrators (TPAs), including the differences among them. We’re breaking it all down with this helpful primer.
Overview: Private-Pay Patients
Consumers paying directly for their hearing health care services and products out of pocket or through financing are typically known as “private-pay patients” or “self-payers.” They avoid much of the complexities of insurance coverage, pre-authorizations, and claims processes and may have greater flexibility in their treatment plan, including selected hearing technology.
Though a greater financial commitment, private pay may be preferred by some consumers for its direct approach, its simplicity, and the ability to make hearing care decisions without insurance-driven restrictions. With the rise of TPPs/TPAs in hearing health care, private-pay opportunities can be critical for the health of an audiology practice.
Overview: Third-Party Payers
A TPP acts on behalf of the patient (first party) and covers their qualified health-related expenses partially or in full. It reimburses the provider (second party) for care, products, and services rendered in or out of network. The TPP also manages and adjudicates claims, manages and tracks data, collects premiums, manages enrollment, and more.
This sounds like insurance, right? That’s because it is — at least in the U.S. health care realm. Third-party payers are common: Medicaid, the Department of Veterans Affairs, and workers’ compensation (publicly run); self-funded employer plans; and commercial insurance (privately run) such as UnitedHealth Group, Aetna, Cigna, Blue Cross/Blue Shield, and Medicare Advantage.
All TPPs aren’t created equal. Medicaid is run at the state level, for instance, so each state has different requirements and coverage. Workers’ compensation coverage also varies by state — some employers are even exempt.
Let’s take a closer look at TPPs via commercial insurance. Most health insurers don’t cover hearing aids. Some, however, provide coverage for hearing tests and hearing aid fittings. The insurance plans that do provide hearing aid coverage offer different variations, such as negotiated discounts or maximum allowed amounts.
Plans can vary per state. The good news is that commercial insurance is a familiar process: If hearing care is covered, you submit the claim, you’re reimbursed the contracted amount, and the patient covers any agreed-upon costs beyond the plan’s benefits if allowed by the patient’s insurance.
Overview: Third-Party Administrators
In recent years, many TPPs have begun outsourcing the administration of their hearing aid benefits to third-party administrators. A TPA is a cost-effective, turnkey solution to benefit management. This setup helps the TPP reduce costs and potentially makes hearing care more affordable and accessible for those with hearing loss.
TPAs take a lot of administrative weight off the shoulders of TPPs by providing many day-to-day operational services. These could include enrollment and eligibility management, claims processing, benefit administration, customer service, regulatory compliance, network management (for example, provider recruitment and credentialing), and the provision of devices.
But with TPAs, hearing care practices can end up on the losing end. Third-party administrators often include restrictions that don’t allow providers to fully address a patient’s hearing needs:
Technology — Many TPAs dictate the brands and models you’re allowed to offer, regardless of what would best suit your patient’s needs.
Education — Some TPAs pay just a fitting fee, meaning you’ll get far less revenue for the same amount of work. Providers often shorten these appointments because they need to see more patients to compensate for the lost revenue. Educating the patient on hearing, as well as hearing technology and maintenance, is often rushed or skipped over when time is limited.
Rapport — TPAs typically restrict office visits to the evaluation, fitting, and one or two follow-ups during the first year. If they allow extra visits, the patient must pay for each one. But with the typical provider’s bundled pricing, a history, rapport, and relationship with a dedicated hearing care provider can be built — which is key to quality hearing care.
Here’s how the TPA process typically works:
- A patient from the TPA network schedules an appointment with you.
- You evaluate the patient and discuss technology options.
- You submit your order to the TPA based on what your contract permits.
- A $900 technology copay is paid to the TPA by the patient, the insurance company, or a combination.
- You receive technology from the TPA, then fit the patient.
- Based on the device level, you’re paid a fitting fee of $800 ($400 per ear) by the TPA.
- You fulfill the requirement of three follow-up visits, and the TPA allows you to charge $70 for each additional visit that year.
- The patient pays $350 out of pocket for five extra visits.
So for one patient, you received an $800 binaural fitting fee plus $350 from the patient for follow-ups — or $1,150 for 10 appointments (including the evaluation and fitting).
As you can probably tell from the example, contracting with a TPA has the potential to create a full patient schedule; keep you, the provider (not a big-box store), in the mix; drive patients to your door with no marketing spend; make hearing care more affordable for many; lessen your costs; and provide revenue.
But there’s also potential for a TPA to fill your schedule with high-effort, low-revenue appointments; prevent you from providing customized patient care because of restrictions; turn you into an order taker, limiting your autonomy as a hearing care professional; and limit your ability to market or communicate to the patients you’ve treated due to restrictions imposed by the contracts.
The Big Difference Between TPAs and TPPs
One key distinction between TPPs and TPAs: For any given insurance claim, it’s the TPP who has the final word and issues the payment, as contracted, to cover the health care cost. The TPA receives the payment from the TPP and then pays the agreed-upon fees to the provider. Any appeals about a claim are also adjudicated by the TPP.
In other words: A TPP pays for the health care cost; a TPA manages the benefit and, from the money paid out by a TPP, disburses fees (and sometimes a reimbursement for cost of goods sold) to the provider.
To complicate matters, many TPAs are owned by TPPs or hearing aid manufacturers. UnitedHealthcare Hearing is a TPA under the UnitedHealthcare banner, and TruHearing is owned by major hearing aid manufacturer WS Audiology. But they’re still TPAs.
The TPPs and TPAs have their place, but relying solely on them isn’t a sound business strategy — it’s potentially the same amount of work for less revenue. If your practice decides to work with these companies, it’s important to have a well-balanced payer mix, including private pay.
At Audigy, our business experts can help you set up the right payer mix for your practice — and make sure you’re getting everything you’re owed. From credentialing, coding, and contracting to bookkeeping, billing, and IT and security, Audigy offers the back-office solutions to help you increase efficiency and profitability.