CMS plans to end Medicare coverage of bone-anchored hearing systems

David Kirkwood
July 30, 2014

By David H. Kirkwood


This post was updated on July 31.

CENTENNIAL, CO—People with hearing loss have long complained that Medicare doesn’t cover the cost of hearing aids. Now, older Americans who need help with their hearing face the loss of coverage for another type of treatment, osseo-integrated (or bone-anchored) devices, such as the Cochlear™ Baha Implant System, which have been paid for by Medicare for nearly a decade.

The Baha 4 Systems

The Baha 4 Systems

In a proposed rule document that the Centers for Medicare Medicaid Services (CMS) posted on July 11, the Baha Implant System, manufactured by Cochlear Limited, and certain other products would be reclassified as hearing aids. If approved, that would make these systems ineligible for Medicare coverage, just as conventional hearing aids always have been. That’s why Cochlear, the world’s largest maker of cochlear implants, is fighting against the proposed change in Medicare policies.



In its design and function, the Cochlear Baha system is very different from conventional air-conduction hearing aids. The Baha (which originally stood for bone-anchored hearing aid) system is osseointegrated. That is, it is connected to the bone behind the ear, thereby taking advantage of bone’s natural ability to conduct sound. In this way, it replaces the function of the outer or middle ear and sends sound directly to the healthy inner ear.

Among possible candidates for the device are patients with: (1) single-sided hearing loss, (2) conditions such as microtia or atresia, characterized by deformed or absent outer ears, that preclude the use of in-the-ear or behind-the-ear hearing aids, or (3) conductive hearing loss.

A physician must determine if a patient meets the candidacy criteria for the Baha Implant System and deems the solution medically necessary.



In its discussion of the proposed rule change, (see Section VII, “Scope of Hearing Aid Coverage Exclusion”), CMS argues that the Baha Implant System is not fundamentally different from other hearing aids, which are statutorily excluded from coverage by Medicare.

It notes that cochlear implants and auditory brainstem devices are eligible for Medicare coverage because they meet the definition of a prosthetic device in that they replace the function of the inner ear. However, the federal agency continues, “We believe, based on our understanding of how [they] function,” that “osseointegrated devices such as the BAHA are bone-conduction hearing aids that mechanically stimulate the cochlea” and not prosthetic devices “in that they do not replace all or part of an internal body organ.”

The rule proposed by CMS does not apply only to Cochlear’s Baha system. It also categorizes a range of products as hearing aids, including middle ear implants, other osseointegrated devices, dental-anchored bone-conduction devices, and other external or non-invasive products that mechanically stimulate the cochlea. Since, according to CMS, “all these devices provide traditional aid to hearing,” they are ineligible for Medicare coverage.

Because of the high cost of these systems, continuing coverage by Medicare is crucial for many potential users. Currently, Medicare pays for osseointegrated  implants (Baha) in one bundled payment  that covers the cost of the device and operating room time.  Cochlear Americas reports that the national average bundled rate for the hospital outpatient is $9732, and the national average for an ambulatory surgical center is $7987. Medicare beneficiaries are typically responsible for a deductible and co-insurance amount of the Medicare’s allowable fee schedule for each service provided.



Last week, Cochlear launched a public campaign against the proposed change to CMS rules. Anthony Manna, president of the company’s Cochlear Bone Anchored Solutions division, stated, “In 2006, CMS correctly classified the Baha Implant System as a prosthetic device which replaces the function of the middle ear and cochlea.”

Manna, who is based in Cochlear’s U.S. headquarters in Centennial, CO, warned, “If the new proposal were to be accepted, the United States would be one of the very few industrialized nations not to cover this life-changing technology for patients in need.” He added. “For many people who do not receive benefit from hearing aids there is no alternative treatment option [so] access to Baha Implant System technology is most critical.”

While the number of people using the Cochlear system is not huge—somewhat over 100,000 worldwide, and thousands in the U.S., according to Manna–among those people who do have one, in many cases other approaches have failed and the Baha Implant System “is the last resort.”

Manna advised Americans on how they can support continued access to and coverage of the Baha Implant System under Medicare. They can sign a petition or submit comments to CMS via the usual process by August 29. If they do this, Manna said, they should reference CMS-1614-P. Or, he suggested, they can contact their senators and representatives.




Oticon Medical's Ponto device.

Oticon Medical’s Ponto device.

Cochlear is not the only company challenging CMS’s action. Oticon Medical, maker of a  bone-anchored hearing system, issued a statement saying that if the proposal takes effect, “It will effectively terminate all Medicare coverage for new bone-anchored implant surgeries as well as terminate funding for replacement processors for current bone-anchored implant users under Medicare.”

Therefore said the company, part of the William Demant group, “Oticon Medical is putting all of our possible resources into fighting this proposal. We are working with our legal counsel, leading physicians, professional organizations, and patient advocacy groups to make sure CMS knows the positive impact that bone-anchored hearing systems have on the men, women and children who rely on them every day.”

Otic0n Medical also noted, “Equally disturbing is the potential ripple effect this proposal will have on non-governmental private payers and state Medicaid policies. These groups routinely look to Medicare as the standard for their policies and use Medicare coverage guidelines for justification of coverage, or removal of coverage for treatment options. It is not overstating a concern to say if this proposal passes, coverage for everyone using a bone-anchored system is threatened.”



Several non-profit organizations are also trying to persuade CMS to reverse its decision. These include the American Cochlear Implant Alliance, the American Speech-Language-Hearing Association, and the American Academy of Otolaryngology-Head and Neck Surgery



Shannon Weinberg, senior marketing manager for Cochlear Americas, told yesterday that Cochlear and Oticon Medical are scheduled to meet with CMS officials in Washington on July 31 to make their case. Basically, said Weinberg, our message to CMS is “you got it right the first time” when it ruled that bone-anchored devices are not hearing aids and are eligible for Medicare coverage.




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