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Professional Coding: Parts 1, 2 and 3

Professional Coding: Parts 1, 2 and 3
Robert C. Fifer, PhD
April 2, 2002
Editor's Note - Professional Coding: Parts 1, 2 and 3 were originally written and published as separate, concise articles. For CEU purposes, we have combined the original three articles, learning outcomes and examinations, into one larger, comprehensive document. Thanks, ---Editor

Professional Coding: Part One - Clinical Coding: CPT

In response to requests for information on procedural and diagnostic coding, I am writing the first of a multi-part series.

This first section will address CPT (Current Procedural Terminology) coding. Part Two will focus on ICD-9 diagnosis coding. Part Three will deal with V-codes, HCPCS, and the new CPT-5 and ICD-10 codes.

CPT codes are copyrighted and owned by the American Medical Association. These codes were established in the mid-1960s. The first CPT manual was published in 1983. The codes were written by physicians for physicians with no consideration of non-physician health care professionals. They were established as a first step toward standardizing health care terminology and to provide a means of objectively tracking services rendered.

As those of us who were in practice in 1983 will recall, if someone had asked you what your facility called a basic evaluation, the responses would be ''Comprehensive diagnostic evaluation'', ''Basic audiological evaluation'', ''Audiological assessment'', ''Basic evaluation'', ''Comprehensive evaluation'', and so forth. The point is, there were as many descriptors as there were clinics. Insurance companies had no standardized gauge by which to judge the value of our services. As a result, the AMA established a formal editorial panel to examine all medical procedures (of which speech, language, and hearing services were included). The AMA solicited input from various specialty disciplines. The section of the manual that covers what we do collectively is known as ''Special Otolaryngology Procedures''.

During the decade of the 1980s, the cost of health care skyrocketed. There were various reasons for this, perhaps the most famous of these was ''physician greed''. Without a doubt, that was a contributing factor, but I submit it was a relatively small part of the entire picture. Another part of the picture was ''Managed Health Care,'' which too, established a foothold in the 1980s. The first appearance of managed health care was in the form of HMOs and then various forms evolved. Several of the first HMOs were established by physician groups. The first HMOs were ''prepaid'' plans through which health care could be provided in a more cost effective manner. These prepaid plans quickly evolved into managed care plans as indemnity insurance companies became part of the picture. Also of note, through the 1970s and into the 1980s, insurance companies started to sell individual policies to single persons or to families. Employer supplied health insurance existed but was not necessarily the predominant factor in non-union situations.

And then, two things happened. Somewhere along the way, health care coverage was declared a ''right'', not an element of self-responsibility; and, more employers started to offer health care insurance as a paid benefit. As more employers joined the bandwagon offering employee coverage, insurers found this to be less expensive and more profitable because they could deal with larger volumes. Starting in the middle to late 1980s, they began to drop individual policies in favor of group plans. They also promised employers cost savings if they would select managed care plans instead of fee-for-service options.

Another factor which directly influenced our use of CPT codes was a question asked by Congress in 1986. The question was, ''How much does it cost to practice medicine?'' Congress contracted with Harvard Medical School and Harvard Business School to answer this question. They surveyed thousands of physicians' practices and determined not only the cost of medicine, but also developed a formula by which the cost of a procedure could be valued. This formula is now known as RBRVS or Resource Based Relative Value Scale. It is a multi-part formula that takes into account ''physician work'' (which includes difficulty of the task and level of decision making), ''fixed overhead'' (which includes such items as rent, equipment depreciation, administrative support personnel, etc.), ''technical or ancillary support'' (which includes support services provided by a nurse, technician, audiologist, speech-language pathologist, and others), and ''malpractice'' (which focuses on malpractice premiums for that specialty area). For some codes, this formula is broken down into two general components: Professional component (physician work) and technical component (which includes essentially all other elements of the formula). Congress adopted the RBRVS and directed the Health Care Finance Administration to use it in determining the value of various procedures for Medicare and Medicaid.

As a result, each and every CPT code is evaluated for its relative value by HCFA with assigned value used as the basis for reimbursement by both Medicare and Medicaid. The difference in reimbursement between the two is based on the dollar multiplier assigned by Congress for Medicare and by each state for Medicaid. For example, the dollar multiplier used for Medicare this year is approximately $36.00. If a CPT procedure has a relative value from the formula of 2.83, then the reimbursement for that procedure from Medicare would be $101.88. If another code had an assigned value from the formula of .92, then the Medicare reimbursement would be $33.12. Medicaid works the same way except the dollar multiplier is usually lower than the one set for Medicare. The moral of this story is that Medicare drives the value of all procedure codes, either directly or indirectly. Remember this as the story continues to unfold.

CPT codes are 5-digit codes that describe much of what we do. They are predominantly in the Special Otolaryngology Procedures section of the CPT manual and are today used as a common language for procedures among all physicians and other health care providers, all third party payers, for patients, and for the government (both state and federal). We view CPT codes primarily as having a billing purpose, and indeed they do. But they are also used for tracking service utilization, establishing monthly premiums, monitoring referral patterns, and for demographic health care statistics.

The procedure to establish a new CPT code can be rather long and arduous. The general guidelines that a new code must adhere to are: 1. It must describe a unique service or procedure that is not covered by another code; 2. The procedure must not be investigational; 3. The work involved in the procedure must be measurable; 4. Presentation of the procedure to the CPT Editorial Panel must have the backing of a member academy or association (e.g., physician specialty academies); 5. Whenever possible, a procedure should be universal, meaning that more than one health care discipline can use it on a routine basis; 6. The procedure must have relatively common use (meaning that it is not a procedure performed only 5 times a year across the country); 7. The procedure must not benefit a single manufacturer of equipment whenever possible (this was one reason posturography testing was delayed for so long - only one manufacturer made the equipment). I have frequently been asked, ''Why don't we get a new CPT code for _______.'' Each proposal for a new code must meet these criteria in order to receive procedure code designation.

Interestingly, I frequently encounter CPT code numbers from individual facilities with descriptors that are quite different from the descriptors in the CPT manual. In such instances, the facility may not be fully aware of what it is billing when it deviated from the manual. There are also many facilities that use ''in-house pseudo-codes'' that look like CPT codes -- but are not. These often evolved by virtue of the computer billing system used by that facility over the years or are used to designate the correct procedure code according to whether the payer is private (e.g., HMO), Medicaid, or Medicare. Each clinician should speak with their billing department (if they work in a large facility) to know first-hand exactly which code is being billed, and why.

Once the AMA approves a code, it is assigned a 5-digit number and a descriptor. But it is still without value. To assign the value, the code and descriptor are then presented to HCFA for their Relative Value Utilization Committee (RUC). The RUC determines value based on surveys and example vignettes. Assigning the value of the new code can be a ''Catch-22'' at times. Congress has designated that Medicare will be budget neutral. This means that if a new code is added to an already existing series of codes, then the value of the older codes may go down to accommodate utilization of the new code. If a facility uses the new code extensively and was not being reimbursed for that procedure previously, then it is a ''win'' situation for the ''biller.'' However, if a facility rarely uses the new code, and indeed, elects the older codes more often, its level of reimbursement may decrease, based on the introduction of the newer code. Therefore, overall utilization of the code is an important consideration.

Also note, values are assigned based on the ''average'', taking into consideration short contacts and periodic extended contacts. I am sometimes asked whether a facility can bill extra for extended contact time. The answer is usually no. Periodic extended contacts are typically taken into consideration when establishing the value of the procedure.

Importantly, each third party payer determines which codes are allowed. For example, Medicaid in Florida has a specific list of CPT codes that audiologists can use. In a pediatric situation, if the audiologist performs Visual Reinforcement Audiometry, the professional cannot bill Medicaid for VRA because it is not an allowable code. At our facility, the closest we can get to the truth is to code Pure Tone Audiometry - Air Only. Many third party payers do not allow audiologists and speech-language pathologists to use Evaluation and Management (E/M) codes. These are predominantly physician office visit codes the include duration of contact, level of complexity, and level of decision-making. However, there are some HMOs that will reimburse for using E/M codes and desire audiologists and speech-language pathologists to do so. Using this as one example, and because all third party payers are unique, each professional or group should contact the respective payers to find out which codes are acceptable and which are not.

The AMA recognized that special circumstances could exist, so they developed a series of modifiers to the CPT codes. Of these modifiers, the one we encounter most often is ''-52''. This is the modifier for abbreviated procedure. Examples would be a speech and language screening in lieu of a full evaluation (92506-52) or an ABR screening in lieu of a full evaluation (92585-52). However, each provider needs to check with their billing section to determine if the submission process (or software) will accept modifiers.

The last note on coding is documentation. For any procedure performed, if the documentation is not in the chart, the procedure did not occur. Documentation is vital to ensure the service was delivered and to justify the use of a particular code. My final thought until next time: Document, document, document.

EDITOR'S NOTE: Although Audiology Online strives to publish exclusively original papers, we have on occasion found papers which are so important and noteworthy, that we seek permission to republish these fine papers. The above paper is one such example. We are grateful to the FLASHA Forum and to Robert C. Fifer, Ph.D., for allowing us to edit, revise and reprint this manuscript. Thank you very much, Douglas L. Beck Au.D., Editor-In-Chief, Audiology Online. September, 2000.

Professional Coding: Part Two. Clinical Coding: ICD-9

This is the second of a three part series on clinical coding. The first article focused on CPT coding. In that article, I discussed the origin of CPT codes as being owned and copyrighted by the American Medical Association and how they are used to describe medical, surgical, and medically related procedures. In this article, I will direct attention to the International Classification of Diseases (ICD), 9th Edition.

The ICD series of codes was established approximately 400 years ago by physicians in Europe. These codes were useful in categorizing disease symptoms and assisting in diagnoses during a time when medical science was more an art than a science. The ICD code series currently belongs to the World Health Organization and is used, still, to group and classify diseases. On a worldwide basis, the diagnostic classification of diseases provides a basis for tracking and monitoring outbreaks, progressions and regressions of disease processes in various regions.

As practitioners, we sometimes view these codes from the restrictive perspective of reimbursement only. However, in the United States, the ICD code series is used in combination with the CPT code series to establish a common language of diseases and for tracking treatments and procedures for statistical analysis, for the determination of incidence and prevalence of disease and trauma, for utilization of services analysis, and of course, for reimbursement and cost analysis reasons.

Through the early and mid 1980's, diagnostic procedures and diagnoses were both described in narrative terms. The narrative terms had no commonality or universality and varied dramatically across professionals who used them. Although both CPT and ICD codes existed during those years (and earlier), their common use was not adopted until the mid to late 1980's when much attention was given to discovering how much it costs to practice medicine. As a result of increasing costs, changes in health care delivery models, interest on the part of Congress (due to the cost of Medicare and Medicaid), all parties recognized the need for a common language to describe, and allow analysis of, what was done and what was found. Hence, the formal adoption of the diagnostic codes of the ICD system.

The ICD-9-CM actually contains two sets of codes. The first part of this discussion will focus on the diagnostic codes. The second part of this discussion will direct attention to the "V" codes which are often confused with CPT codes.

Diagnosis codes are composed of three to five digit identifiers intended to describe a disease entity with significant precision. Beyond reimbursement issues, these codes unify the language of diseases among professionals, government entities, third party payers, and statisticians.

For example, let's look at the diagnosis of conductive hearing loss. Under the simple heading of "conductive hearing loss", the implication is made that a mechanical problem exists impeding the entry of sound into the cochlea. However, from a clinical perspective, there are various types of conductive hearing losses; disarticulation, perforation, impacted cerumen, otosclerosis etc. They may arise from the middle ear, from the ear canal region, or both. A conductive hearing loss may also be combined with a sensorineural hearing loss to produce a mixed hearing loss.

Rather than relying on one's verbal description, the numerical designator specifies the region of involvement of conductive hearing loss in a manner that is much more precise and can be tracked statistically. In an example of conductive hearing loss of middle ear origin, the designator of "389" specifies hearing loss and the suffix ".03" specifies middle ear origin. Hence the complete code "389.03" describes hearing loss of middle ear origin.

In like manner, "sensorineural hearing loss" also comes from the "389" (hearing loss) family of codes. The suffix ".1" specifies the broad category of sensorineural hearing loss. Hence the appropriate diagnosis code for generic sensorineural hearing loss is "389.1". But one could be more specific if you knew for sure that the loss was strictly sensory in nature. Then the diagnosis code would be 389.11. If the loss were strictly neural in nature, then the code would be 389.12. Nonetheless, since our diagnostic tools do not let us differentiate sensory from neural very often, we typically use the code 389.1 which literally means, "sensorineural hearing loss, unspecified."

Neural hearing loss of central origin carries this example one step further. One would still use a code from the "389" family and the suffix ".14" to identify the symptoms as involving the neural system or central origin. Therefore, the diagnosis code for central auditory processing disorder or central (cortical) hearing loss could be "389.14".

The Medicare standard of diagnosis coding specifies that a professional will provide a diagnosis code to the "highest possible level" which means that we will use more than the three-digit designator (i.e., 389: hearing loss). We are required to use the greatest specificity possible to designate the type of hearing loss or the anatomical region of involvement for abnormal auditory function. Most often this means using 389.1 for sensorineural problems, 389.03 for conductive hearing losses of middle ear origin, 389.01 for conductive hearing losses involving the external auditory canal (i.e., aural atresia), or 389.2 for mixed (conductive and sensorineural) hearing losses.

The question often arises, "What code do I use when I don't know what kind of hearing loss a child has? I only know that the child probably has hearing loss." An allowance is made for this situation in that the code "389.9" means "hearing loss, unspecified." Once hearing loss is confirmed and the type of hearing loss is known (i.e., conductive or sensorineural), then the diagnosis code can be changed to reflect with greater precision what type of hearing loss is being described.

Another common question is, "What diagnosis code do I use then the hearing evaluation turns out to be normal?" Many clinicians have attempted to use the code, "V72.1" (hearing test) for lack of a better code. Unfortunately, they are often not reimbursed when using that code.

See Author's Note Below

AUTHOR's NOTE: There are two issues. First, there is no code for normal hearing. One must use a hearing code somewhere in the 389 family of diagnosis codes. Attempts to use V72.1 are not appropriate as it is not a diagnosis of normal hearing, it is a designation of a procedure that was done and was not medically necessary relative to the primary purpose of the patient's visit. Secondly, "normal hearing" is a range and not an absolute value. There are occasions when one's thresholds are still within the general range of "normal" but are not as good as they should be due to an entity like otitis media. In that case, many audiologists use the term, "slight hearing loss" to designate that the drop in hearing thresholds is not great, but the thresholds are not where they should be. Audiologists must use a diagnosis code that matches who they are and what they have done. If a hearing evaluation procedure was done, the diagnosis code must be in the hearing family of codes. Generally, it is not within the realm of audiologists to diagnose "otitis media" despite a slight drop in hearing sensitivity and flat tympanograms, because there are other entities besides otitis media that can produce that same pattern of results. Therefore, we must use a code that deals with some element of physiology and location. For otitis media, even with thresholds still within normal range, I submit that the appropriate ICD-9-CM code would be 389.03 on the basis that it reflects abnormal mechanics of the middle ear.

If the patient has a history of otitis media and currently has totally normal findings, then I believe the correct diagnosis would be 389.9, hearing loss; unspecified. As stated above, there is no code for "normal" in the ICD-9 book. Therefore, following the precedence of medicine, the coding model is to use the code for the primary complaint or symptom and the ".9" suffix for unspecified.

The reader is urged to seek the advice of their own billing and reimbursement experts, the American Medical Association, Medicare, Medicaid, the private and commerical insurance companies they work with, and other authoritative sources for their interpretation and guidance on these issues.

Medicine, in general, has wrestled with this dilemma for years. Simply, one is not allowed to be "normal" in the ICD coding system. This system assumes that one is seen in the health care system because of illness (real or perceived) or is displaying symptoms that may require medical evaluation and intervention. The generic standard that the field of medicine has adopted is to list the diagnosis code from the family of codes describing the primary symptom and then to use the suffix ".9" , indicating unspecified.

Under this circumstance, an adult being evaluated for possible hearing loss or a child receiving a follow-up audiological for otitis media would receive a diagnosis of 389.9 (hearing loss, unspecified) if, indeed, the diagnostic findings were normal. Another critically important point is that the diagnosis code must match the discipline rendering the diagnosis. This means that if an audiologist receives a child for hearing evaluation with the presenting diagnosis of "status post-meningitis", the primary diagnosis used by the audiologist MUST NOT be "status post-meningitis". The primary diagnosis must be a hearing or balance related diagnosis consistent with our discipline and our scope of practice. A secondary diagnosis could be the meningitis code, but we get paid and are tracked for service utilization based on the primary diagnosis.

Moreover, a patient is referred to the audiologist for a consultation. Of course, it is not within our scope of practice, using the meningitis example (above), to affirm that the child really had meningitis. In this case, our primary purpose is to determine if the child had hearing loss associated with the meningitis. A similar point is made for the patient referred with the diagnosis of acoustic neuroma. Again, it is beyond our scope of practice to diagnose an acoustic neuroma. However, it is within our scope of practice to diagnose the presence of abnormal auditory function and to specify the anatomical region(s) of origin for the hearing loss (middle ear, cochlea, retrocochlear, etc.). Consequently, the diagnosis codes we use must match our professional identity.

The remaining portion of this article is devoted to the use of "V" codes. Please note, ICD-9-CM "V" codes must not be confused with the "V" codes used by Medicaid and Medicare. "V" codes used by Medicare and Medicaid will be discussed in the third article in this series.

The "V" codes listed in the ICD-9-CM manual are part of a supplemental code section of specific procedures. The most commonly used code for audiologists in this series is "V72.1" (hearing evaluation). These codes are used when a procedure is done that is unrelated to the primary purpose of a physician visit. For example, if a patient came to a physician for the purpose of monitoring high blood pressure and requested a hearing test while he was there, V72.1 would be the code used to reflect that this was a service rendered apart from the primary reason for the patient visit. As such, it is often considered "not medically necessary" by third party payers and, therefore, non-reimbursable. This code would be appropriate for use in public school screenings where the service should be documented with the realization that insurance companies will not reimburse. In contrast, this code would not be appropriate for use with a patient who was referred out of concern for possible hearing loss, but who indeed had normal auditory function. Following the example of medicine, the diagnosis code 389.9 would be more appropriate in that situation.

My summary for both the CPT coding system and the ICD-9-CM system is that we must describe numerically what we did and what we found. There will be occasions when we will not find a code which describes exactly what we did or what we found. In those instances, we must come "as close to truth as possible" remembering that these codes comprise a common language that is sometimes not sufficient in each and every situation.

The other caution is the use of "home-made" codes. These sometimes are created by hospitals and other large health care settings. In those instances, the descriptor of the code may be abbreviated or changed to reflect common usage for that facility. To alleviate that possibility, I encourage all professionals to purchase or arrange access to CPT-4 and ICD-9-CM manuals. The CPT-4 manual can be purchased from medical book stores or from the American Medical Association. The ICD-9-CM manual can be purchased from medical book stores, the American Medical Association, or can often be special ordered through Barnes and Nobel, Borders, or Each manual will be a tremendous asset to help assure accuracy in procedure coding, precision in diagnosis coding, and to improve reporting and reimbursement efforts.

Professional Coding: Part Three - HCPCS

This article is the third in a special series on coding. Parts one (September, 2000) and two (December, 2000) are available online via AudiologyOnline, in the 'Article Archives.'


In the first two parts of this series, I presented the more common aspects of procedural coding, the use of CPT codes to describe what you did and the use of ICD-9 codes to describe what you found. In this article I will describe another coding system, designed to complement CPT codes.

HCPCS (HCFA Common Procedural Coding System) is a series of codes developed by the federal government and specifically the Center for Medicare and Medicaid Services (CMS) (formerly known as the Health Care Finance Administration (HCFA)). CMS uses these codes primarily for Medicare and Medicaid to describe procedures or items not listed in the CPT manual.

'What is the difference between CPT codes and HCPCS?'

CPT codes are owned and copyrighted by the American Medical Association. They describe common procedures used in the course of health care delivery and are oriented to physician use in one way or another. HCPCS are codes generated by the federal government to describe procedures that have special significance to either the Medicaid or Medicare programs.

There is some overlap between CPT codes and HCPCS. This is because level 1 HCPCS codes are, in fact, CPT codes. Level 2 HCPCS codes are unique codes that, for us, begin with a 'V' or a 'W'. There also exists a level 3 series of codes that I will address below.

If the procedure is used in the course of providing medical diagnostics or treatment to a Medicare or Medicaid patient, then a CPT code is used to describe what was done. If what was done to and for the patient goes beyond diagnostics and treatment and into the realm of therapeutic intervention, then a level 2 HCPCS code is often chosen to describe what was done.

As a case in point, the code V5010 describes a diagnostic audiological evaluation (similar to 92557). But V5010 also has a specific connotation of an evaluation that was performed for the primary purpose of selecting appropriate hearing aid amplification. Hence, if a patient were seen for a hearing evaluation to support an otolaryngology visit in the process of diagnosing hearing loss, then the audiologist would use the CPT code 92557. In contrast, if the patient were seen for the primary purpose of obtaining an audiogram for hearing aid selection, then the code V5010 would be appropriate. As a word of caution, there is sufficient overlap between the two codes that both 92557 and V5010 should not be used for the same visit. That may constitute double billing and cause difficulties down the road (i.e., audit).

There are other codes that are commonly used for audiological procedures for which no CPT codes exist or are generally not reimbursable by most third party payers. Examples include V5090 (hearing aid evaluation and fitting, monaural), V5110 (hearing aid evaluation and fitting, binaural), and V5900 (earmold). In the case of V5090, there is a corresponding CPT code (92590). But most commercial third party payers do not recognize this CPT code as a procedure eligible for reimbursement. For the other two examples, the CPT code 92599 (unlisted otolaryngological service or procedure) would be the only option. Obtaining reimbursement under 92599 is extremely challenging, at best! In general, the 'V' codes are used only with Medicare and Medicaid patients, and typically only Medicaid patients, since Medicare does not reimburse for any procedures related to hearing aids.

Each state is different with regard to which codes are allowed for use by audiologists versus physicians. For example, one state may permit the use of 92557 for audiological evaluations such as annual hearing rechecks and V5010 for audiograms specifically oriented toward hearing aid fitting. Other states require the use of V5010 for all diagnostic audiological procedures and deny access to 92557 for use by audiologists.

The determination of which codes are accessible to audiologists depends on three factors: the authorization of hearing services by the legislature of that state and the dollar allocation allotted to support Medicaid services; budget neutrality issues for statewide Medicaid services; and the willingness of Medicaid consultants and staff at the state level to allow access to additional codes.

For each of these factors, audiologists must remember that Hearing Services under Medicaid are optional services. If a state legislature so chooses, federal guidelines permit the elimination of Hearing Services for adults, children, or both. Additionally, the scope of services within the Hearing Services category is optional and may vary from one state to another.

If a new code is authorized and the state is under a 'budget neutrality' guideline, the value of the older codes may be reduced slightly to reflect both the availability and quantity of use of the new code. As a result, 'more' is not always 'better' with regard to reimbursement!

As an additional reminder, the 'V' codes used in the HCPCS listings should not be confused with the 'V' codes, which are part of the ICD-9 series of codes. The difference between the two 'V' code sets is that the ICD-9 'V' codes describe hearing procedures unrelated to the primary purpose of a patient's office visit. For example, if a patient arrives at a physician's office for a blood pressure check, and, while there, asks to have his hearing tested, the hearing test would be considered 'unrelated' and therefore, not medically necessary. The corresponding code would be V72.1. In contrast, the 'V' codes on the Medicare and Medicaid lists are for medically necessary procedures to be coded specifically for Medicare or Medicaid.

Using these codes appropriately can be a daunting task. If ever a question exists about which code to use for the respective payers, the best advice is to call the provider services representative for that payer and ask! Additionally, I certainly recommend that the audiologist document the name and phone number of the provider services representative, and also document the time and date of the call in case a procedural issue is contested at a later date.
Sennheiser Hearing - June 2024

robert c fifer

Robert C. Fifer, PhD

Director of Audiology and Speech Language Pathology at the Mailman Center for Child Development at the University of Miami

Robert C. Fifer, Ph.D. is Director of Audiology and Speech Language Pathology at the Mailman Center for Child Development at the University of Miami.  Dr. Fifer represents ASHA on the AQC. 

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