It is critical that audiologists and hearing instrument specialists understand regulations for charging for and delivering services or items to patients with Medicaid coverage.

By Beth Kidder, MPP

Choosing to provide services and items to Medicaid beneficiaries is an important decision for hearing healthcare professionals. More than 21% of the population in the United States, including over 39% of children and youth younger than age 19, are enrolled in Medicaid. As healthcare providers, it is critical that audiologists and hearing instrument specialists understand regulations for delivering services or items to patients with Medicaid coverage. Misinterpretation of the regulations may discourage providers from participating in Medicaid programs. This decision would limit access to important hearing services and items for Medicaid beneficiaries across communities.

Inaccurate information is circulating among some audiologists and hearing instrument specialists about “best pricing” requirements associated with Medicaid participation. Best pricing in this context is interpreted to mean the amount providers charge Medicaid (or Medicaid managed care organizations) for services or items delivered is the maximum amount that they can charge other payors (non-Medicaid) for those same services or items. This misperception is resulting in a belief that providers are prohibited from charging more for services and items provided to non-Medicaid patients than they charge for those same services and items rendered to Medicaid patients. No federal regulation requires this type of best pricing, and it is highly unlikely that state regulations would require it.

Clarifying Federal Regulations

Federal Medicaid regulations require providers who deliver services or items to Medicaid enrollees to accept reimbursement from Medicaid as payment in full for Medicaid-covered patients.1 Providers are prohibited from requesting and accepting additional payment, above and beyond what they charge to Medicaid and any applicable co-pays, for a service or item that is delivered to a patient who is a Medicaid member.

A federal regulation also provides authority to the U.S. Department of Health and Human Services (HHS) Office of the Inspector General (OIG) that discourages providers from charging Medicare or Medicaid substantially in excess of their usual charges.2 More specifically:

The OIG may exclude an individual or entity that has—

(1) Submitted, or caused to be submitted, bills or requests for payments under Medicare or any of the State health care programs containing charges or costs for items or services furnished that are substantially in excess of such individual’s or entity’s usual charges or costs for such items or services.3

The OIG is the arm of the federal government that leads efforts to combat fraud, waste, and abuse in HHS programs. Providers that charge Medicare or state health care programs (Medicaid) substantially more than their usual and customary charges or costs may be excluded from these programs. Excluded providers cannot receive any federal healthcare program payment for services or items they furnish or prescribe.4

A Medicare fraud and abuse publication from the Centers for Medicare & Medicaid Services (CMS) further emphasizes this point, citing “charging excessively for services or supplies” as an example of abuse. Like the federal law and regulations, it does not require providers to accept the same reimbursement across payers.5 Thus, while it is important that providers only charge Medicaid the amount they would usually charge other payors, there are no federal requirements to restrict charges to other payers to a Medicaid rate.

To support transparency and compliance with regulations, providers who bundle services for their general patient population should itemize their Medicaid charges. This will enable a comparable comparison of charges regardless of the codes used. For example, itemizing will ensure that the comparison of total Medicaid charges for a hearing aid are for the same make, model, technology, and style of hearing aid, along with the same level and duration of care.

Medicaid Access to Care Requirements

Federal Medicaid regulations require states to ensure sufficient access to care. Under federal law, state Medicaid programs must ensure that:

…[P]ayments are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available…at least to the extent that such care and services are available to the general population in the geographic area.6

In addition, the new federal Ensuring Access to Medicaid Services Final Rule7 enacts major provisions to ensure timely access to high-quality care. The new rule requires states to demonstrate sufficient access to care in key circumstances. The existing federal law and this new rule argue against states imposing blanket payment restrictions, such as best pricing requirements, which would limit the number of providers enrolled in Medicaid or cause providers to limit the number of Medicaid patients they serve.

Most providers who participate in Medicaid also accept and bill other payors. It is rare that a provider will only accept Medicaid due to the historically lower reimbursement. If Medicaid participating providers were required to accept Medicaid’s payment fee across all payers, it would severely impact a Medicaid program’s ability to attract the providers necessary to ensure sufficient access to care for Medicaid enrollees.

State Medicaid and Managed Care Organization Regulations May Vary

Providers should always follow the specific guidance of the state Medicaid program in addition to carefully reviewing the coverage specifics of managed care organizations with which they participate. Each state may establish its own pricing within federal guidelines. Although the Medicaid access to care federal mandate described earlier makes it unlikely any individual state will have a best pricing requirement for Medicaid participating providers, the rule does not explicitly prohibit it. 

One example of state-specific pricing is Michigan Medicaid. Michigan obtains a reduced price for hearing aids through contracting with one vendor to provide hearing aids for the entire state. Another example is Florida, where the law governing Florida health maintenance organizations (HMOs)8 confirms that these entities do not have to reimburse providers at the same payment rates a provider receives from Medicaid or Medicare or otherwise limit the amount an HMO can pay. In fact, the Florida law ensures flexibility in provider reimbursement. It prohibits an HMO from requiring a contracted healthcare practitioner to accept the terms of other healthcare practitioner contracts with the HMO, other insurers, or another HMO, under the management and control of the HMO, including Medicare and Medicaid provider contracts. This provision includes contracts with audiologists.

Conclusion

Federal regulations require providers who participate in the Medicaid program to:

  • Accept payment from Medicaid as payment in full for Medicaid-covered patients
  • Not charge Medicare or Medicaid substantially in excess of usual and customary charges

A thorough examination of federal regulations demonstrates that there is no regulation or requirement that providers participating in Medicaid must apply the same Medicaid rate across other payers. In fact, imposing this restriction would limit the number of providers available to Medicaid patients and therefore hinder access to care. This would hamper a state’s ability to comply with federal access to care laws and regulations.

Of course, state regulations vary and, though it is unlikely, no explicit regulation prevents a state from imposing a best pricing requirement. Providers should check state-specific regulations to verify that their state Medicaid program does not restrict the amount providers charge for services or items delivered to non-Medicaid payors to the amount charged to Medicaid (or Medicaid managed care organizations) for the same services or items.

Beth Kidder, MPP, is the managing principal for the Health Management Associates Florida Office located in Tallahassee. She has more than 20 years of experience supporting state Medicaid programs across the country, and as Florida’s former deputy secretary for Medicaid, she has subject matter expertise in all aspects of Florida’s Medicaid program. Correspondence can be addressed to Beth Kidder at [email protected].

References

1.  Code of Federal Regulations. Acceptance of State payment as payment in full. 42 CFR 447.15. Published 2024. Available at: https://www.ecfr.gov/current/title-42/chapter-IV/subchapter-C/part-447/subpart-A/section-447.15. Accessed October 21, 2024.

2.  Code of Federal Regulations. Amount of payment if customary charges for services furnished are less than reasonable costs. 42 CFR 413.13. Published 2024. Accessed October 27, 2024. Available at: https://www.ecfr.gov/current/title-42/chapter-IV/subchapter-B/part-413/subpart-A/section-413.13.

3.  Code of Federal Regulations. Excessive claims or furnishing of unnecessary or substandard items and services. 42 CFR 1001.701. Published 2024. Available at: https://www.ecfr.gov/current/title-42/chapter-V/subchapter-B/part-1001/subpart-C/section-1001.701. Accessed October 21, 2024.

4.  Office of the Inspector General. Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs. U.S. Government Accountability Office. Update issued May 8, 2013. Available at: https://oig.hhs.gov/exclusions/files/sab-05092013.pdf. Accessed October 21, 2024. 

5. Centers for Medicare & Medicaid Services. Medicare Fraud & Abuse: Prevent, Detect, Report. Available at: https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/Downloads/Fraud-Abuse-MLN4649244.pdf. Accessed October 21, 2024. 

6.  Social Security Administration. State Plans for Medical Assistance. Available at: https://www.ssa.gov/OP_Home/ssact/title19/1902.htm. Accessed October 21, 2024.

7.  Centers for Medicare & Medicaid Services. Final Rule: Medicaid Program; Ensuring Access to Medicaid Services. Federal Register. May 10, 2024;89(92). Available at: https://www.federalregister.gov/documents/2024/05/10/2024-08363/medicaid-program-ensuring-access-to-medicaid-services. Accessed October 21, 2024.

8.  Florida Legislature. Stat. § 641 (2024). Available at: Chapter 641, Florida Statutes. Accessed October 21, 2024.

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