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Bundling versus UnBundling

August 12, 2002

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Question

Please tell me about bundling versus unbundling and the advantages and disadvantages of each.

Answer

Unbundling refers to separately billing for different parts of a service package, rather than charging a lump sum (bundling) for related services.

Importantly, unbundling diagnostic services to Medicaid or Medicare is illegal. For example, you cannot bill 92553 for air and bone conduction testing plus 92556 for spondee thresholds and word recognition testing rather than billing 92557 for the comprehensive examination.

However, unbundling the cost of the hearing aid from the related dispensing services is not illegal, and may eventually be required if Medicare reimburses for hearing aid services (Loavenbruck & Fabry, 2002).

The audiology clinics at Nova Southeastern University have used partially unbundled billing for over a year now.

We charge a set service fee that includes the cost of the services related to the hearing aid dispensing, follow-up visits, and hearing aid repairs for two years. The fee also covers hearing retesting to adjust the hearing aids in the service package. This ''Hearing Care Plan'' fee remains the same regardless of the product dispensed.

The patient is also charged the actual invoice cost of the hearing aid, in addition to the fee for the Hearing Care Plan.

Other clinics use more complete unbundling. For example, one audiology private practice in Florida charges an initial dispensing fee and then charges for office visits after the initial dispensing. Interestingly, they report this protocol has reduced the total number of ''follow-up'' patient visits by eliminating some marginally necessary visits.

We have found that by reducing the price difference between the types of technology, unbundling reduces reluctance to purchase higher technology hearing aids because the cost differential is lessened. Using this model, the total cost for non-programmable analog hearing aids at our clinic is higher than at other audiology practices, while the highest technology products tend to be less expensive.

We believe unbundling allows the patient (and our AuD students) to better appreciate the true story. That is; the knowledge and skills of the audiologist are critical to the patient's success and have economic value. Further, it allows the audiologists to distance themselves from a ''salesmanship'' mentality. Our patients have responded positively to the unbundled model. We believe they have greater reason to trust our recommendations for technology, because they know we have no financial incentive to recommend a given product.

Further, by adopting unbundled billing now, audiologists may help third party insurers understand the nature of our services, should they elect to cover them in the future.

Currently, if insurers see that a hearing aid costs $1000, they may question why they should not purchase the aid directly from the manufacturer at a dramatic ''savings.'' By unbundling the service and product, it is clear to the insurance company what it is that the patient needs - professional services AND amplification products. Unbundled billing may help third party payers recognize services as important, separate and distinct from the amplification device itself, and it may foster the understanding of the professions as more than ''sales'' of hearing aids.

By: Teri A. Hamill, Ph.D.
Program Professor
Nova Southeastern University
www.nova.edu/fgse/csd


REFERENCE:

Loavenbruck, A., & Fabry, D. (2002) Ethics in Audiology: Report of the Presidential Task Force. 14th Annual Convention and Expo, American Academy of Audiology: Philadelphia, PA.


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