“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, things seem to get more and more complicated.
What’s a clinic owner or administrator to do? It can feel like alphabet soup researching these issues — just to hope for adequate revenue.
Let’s get you back on firm ground. We’ll unpack some of these terms and see how these organizations work together (if they do).
Private-Pay Patients
This is the most straightforward definition and relationship. A private-pay patient (also known as a private payer or self-payer) pays for your services and products out of pocket or through financing.
Third-Party Payers (TPPs)
A TPP acts on behalf of the patient (first party) and covers their qualified health-related expenses partially or in full. A TPP reimburses the provider (second party) for care, products, and services rendered in or out of network.
A TPP also manages and adjudicates claims, manages and tracks data, collects premiums, manages enrollment, and more.
Wait a second — this sounds like insurance, right? That’s because it is, at least in the U.S. health care realm. Third-party payers are familiar to us: Medicaid, the VA, and worker’s compensation (publicly run); self-funded employer plans; and commercial (private) insurance such as UnitedHealth Group, Aetna, Cigna, Blue Cross/Blue Shield, and Medicare Advantage.
Third-Party Administrators (TPAs)
In recent years, many TPPs have begun outsourcing the administration of their hearing aid benefits to companies known as TPAs. A TPA is a cost-effective, turnkey solution to benefit management. This setup helps the TPP reduce costs and makes hearing care more affordable and accessible for those with hearing loss.
This sounds great, but it often comes at the practice’s expense — which is why ensuring your payer mix is the right balance between TPP/TPA and private pay is key to your practice’s success and growth. More to come on that in a later section.
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.
Why Providers Should Be Cautious About TPAs
The loser in this setup is usually the hearing care practice. TPAs 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 only pay 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.
The Big Difference Between TPAs and TPPs
One key distinction between TPPs and TPAs is this: 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.
Working With TPPs
All TPPs are not created equal. Medicaid is run at the state level, so each state has different requirements and coverage. Worker’s compensation coverage varies by state — some employers are even exempt!
To streamline, and to use a TPP you’re most likely already familiar with, we’ll look at commercial insurance.
Most health insurers don’t cover hearing aids. Some do, however, provide coverage for hearing tests and hearing aid fittings. The insurance plans that do provide coverage for hearing aids offer different variations, such as negotiated discounts or maximum allowed amounts. And of course, it varies from state to 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.
Working With TPAs
A More Detailed Look at TPAs
Let’s revisit TPAs for a moment before getting into how to work with them. A TPA is an organization that processes benefits and claims on behalf of another entity — in our case, a TPP — and disburses a fee to the provider from the claim payment.
A big piece of the confusion about hearing care TPAs is they’re often referred to as TPPs. Plus, the TPAs that disburse only fitting fees are, in some circles, called hearing benefit managers (HBMs) or hearing aid referral networks (HARNs).
TPAs offer some or all of these:
- Hearing evaluation fees
- Hearing aid fitting fees
- Batteries
- A specific number of follow-ups within a specified period
For example, one TPA might pay only a fitting fee, whereas another pays a fitting fee and requires a year of follow-ups. But both are still called a TPA.
The patient’s premiums might technically go to their insurance company, but if the insurance company uses a TPA to handle the hearing aid benefit, that’s who you, the provider, will be interacting (and contracting) with.
How the TPA Process Works
Let’s look at an example of how this might work at a fictional TPA.
- 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 of both.
- 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 they allow you to charge $70 for each additional visit that year.
- The patient pays $350 out of pocket for five extra visits.
With this TPA, 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).
Pros and Cons of Including TPAs in Your Patient Mix
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 just as much 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
- Limit your ability to market or communicate to the patients you’ve treated due to restrictions imposed by the contracts
The TPPs and TPAs have their place, but relying solely on them isn’t a sound business strategy — it’s 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.