This presentation is sponsored by Welcome to Trends and Developments Impacting the Hearing Healthcare Industry Presenters: Gary Rosenblum, President, Oticon, Inc. Doug Beck , AuD, Executive Director of Academic Sciences, Oticon, Inc. IHS Organizers Fran Vincent Esther Waldman Director of Marketing Membership Specialist and Membership 1
Housekeeping • This presentation is being recorded • CE credit is available! Visit ihsinfo.org for details • Note taking handouts are available at ihsinfo.org on the webinar page. Feel free to download now!
Housekeeping Today’s presentation is sponsored by Oticon, Inc. and represents their view on industry trends and changes. The content of this webinar has been developed especially for you by Oticon, Inc., and may not necessarily reflect IHS’ policy and stand on hearing healthcare issues.
Trends and Developments Impacting the Hearing Healthcare Industry
Contents Part 1: Medicare Part 2: OTC Update Part 3: Telemedicine Part 4: Questions 5
Medicare 6
How many people (USA, 2019) have Medicare? • Currently, 59.9 million beneficiaries — 18% of the U.S. population — enrolled in Medicare. • Enrollment anticipated at 79 million by 2030. • 10,000 people per day turn 65 and are therefore eligible for Medicare https://www.medicareadvocacy.org/wp- content/uploads/2018/05/Medicare-Fact-Sheet.pdf
Does Medicare cover hearing aids? 8
Medicare has two options for members Original Medicare (US Government Plan): (63%) is a fee-for-service health plan that has TWO parts: • Part A is Hospital Insurance • Part B is Medical/Doctor Insurance • Hearing Aids are not covered under Original or FFS Medicare Medicare Advantage (MA): (37%) • Parts A and B are both covered under MA • MA covers health care services like: Vision, Dental, Health Clubs, Chiropractor, Hearing Health Care 9
Medicare Advantage (MA) • MA is Medicare in the private sector. • The US government sub-contracts to the private sector, the government pays “per member, per month (PMPM)” to manage Medicare members. • MA plans bundle ancillary benefits - vision, gym memberships, dental, hearing, etc. directly into their plans, thus no need for a supplement (Medi-Gap) plan. • When you enroll into a Medicare Advantage policy, you get your benefits from the plan, not Medicare. You use the MA plan’s network of providers and pay co-pays. 10
Medicare Advantage Enrollment Growth 2019 -22,600,000 Members 11.6% Y/Y Growth, 36.7% Total Medicare Enrollment 25 20 TOTAL ENROLLMENT 15 10 5 0 Jan. 2015 Jan. 2016 Jan. 2017 Jan. 2018 Jan. 2019 11
Medicare Advantage Plans with Hearing Care Benefits 2015 2017 2018 47% 65% 7 3 %
Medicare Advantage Membership by Plan 73% have HA Benefit 74% of HA users are New Users
Hearing healthcare benefit companies (TPA’s) contract with Medicare Advantage plans to offer HA benefit List of Hearing Healthcare Third Party Administrators and their corresponding plans: • Tru Hearing – BC/BS plans, Humana, SCAN • HCS - Anthem, Anthem Amerigroup, CareMore, Aetna, Cigna • EPIC/United Hearing – United Health Care • Amplifon Hearing Health Care – Cigna • HUSA – Anthem, AARP, Kaiser, Well Care 14
Medicare Advantage Impact • 22M total members enrolled in Medicare Advantage • 73% with a hearing care/hearing aid benefit • Therefore 16,060,000 MA members have access to a HC benefit • Benefits range from “free” to member to $2500 benefit toward HA purchase • Utilization of about 1% = 160,000 members accessing care, or 320,000 HA’s in 2018 Must be on MC plan provider panel to have access to MA members 15
Three bills submitted to Congress for review could mean further changes • H.R.1393 - To amend title XVIII of the Social Security Act to provide for coverage of dental, vision, and hearing care under the Medicare program • Sponsor: Rep. Doggett, Lloyd [D-TX-35] | Cosponsor statistics: 8 current - includes 0 original • H.R.1518 - To amend title XVIII of the Social Security Act to remove the exclusion of Medicare coverage for hearing aids and examinations therefor, and for other purposes. • Sponsor: Rep. Dingell, Debbie [D-MI-12] | Cosponsor statistics: 7 current - includes 7 original • H.R.576 - Seniors Have Eyes, Ears, and Teeth Act • Sponsor: Rep. Roybal-Allard, Lucille [D-CA-40] (Introduced 01/15/2019) 16
Implications for us… If Fee-for-service Medicare covers hearing aids… • What will the reimbursement rate be? • Will it still allow me to be profitable? • Will patients be able to top up? • Will it be featured as a DME or a specialty product? • Will hearing aids fall under a competitive bidding? • Will OTC hearing aids be covered by Medicare? • Why does Medicare need to cover HAs if OTC is now a reality? HIA will be monitoring these issues closely and will be sharing our opinions! 17
OTC Overview 18
Defining “Over-the-Counter” • Patients purchase products over the counter or “off the shelf” with no interaction with an HCP • FDA regulates via defined regulatory approval process to ensure patient safety and efficacy • Assumes patient can self-diagnose, select and self-fit 19
OTC Hearing Aids: 2015 – 2019 Developments October 2018 Bose March 2017 November receives October 2015 OTC Hearing Aid 2016 approval for PCAST Act of 2017 Senators July 2017 self-fitting recommends introduced in propose OTC Legislation HI OTC Senate and bill passes House House June 2016 2019 August 2017 April 2017 NASEM produces December Legislation FTC 12 2016 Nov release of passes Senate workshop recommendations FDA commits to Draft assessing President Trump for hearing aids, "considering" Guidelines consumer signs bill into law including OTC OTC device protection PCAST = President’s Council on Science and Technology 20 NASEM= National Academies of Science Engineering and Medicine
Likely timing for approval of final guidelines… June, 2020 21
Penetration by severity of hearing loss: 70% wear hearing aids Profound (6%) 50% Moderate (28%) wear hearing aids 10% Mild wear hearing aids (67%) 22
3 reasons why OTC concerns may be over-stated In Switzerland, where OTC has been available for years, the majority of consumers prefer to go to specialty retailers. 23
3 reasons why OTC concerns may be over-stated In Japan, OTC hearing aids are readily available, yet penetration is at 15% vs. 30% in the US; & satisfaction is at 40% vs. 90% in the U.S. 24
3 reasons why OTC concerns may be over-stated OTC Readers has had a negligible impact on consumer demand for prescription lenses and eye-care professionals. 25
Recent Developments: Recommendation for OTC safety and effectiveness sent to FDA from AAA, ADA, ASHA, IHS, and HIA (July ’18) 26
Recommendations to FDA: Focus on Safety and Efficacy • Establish product requirements (gain limits, SPL limits, etc.) • Define out of the box labeling appropriate for OTC, (intended use, medical device language) • Define inside-the-box labeling appropriate for OTC medical devices (lack of benefit should trigger need for HCP) • Define name category easily comprehensible by consumers (“self-fit OTC” to distinguish between OTC and HCP; should require 510k) • Adequate provisions for consumer protections, in coordination with FTC (strong return and refund policies, claims should be verified) 27
Recent Developments: Bose receives Class II approval to market a self-fitting hearing aid (October ’18) 28
De Novo Process: • The De Novo process provides a pathway to classify novel medical devices for general controls 1 alone, or general and special controls 2. • Provide reasonable assurance of safety and effectiveness for the intended use, but for which there is no legally marketed predicate device. • De Novo classification is a risk-based classification process and it is confidential. 1. General Controls basic provisions by which FDA regulates products 2. Special Controls are regulatory requirements for Class II devices 29
Recent Developments: July 24, 2018 FDA letter to hearing aid manufacturers stating OTC does not exist until the regulations are finalized, so don’t advertise OTC 30
FDA Letter highlights: • “The OTC hearing aid category, as defined by FDARA section 709, does not exist until the effective date of a published final regulation” • “Until that time, no products that are claimed to address hearing loss are, or can claim to be, OTC hearing aids within the meaning of FDARA section 709” 31
Recent Developments: HIA Meeting with FDA on the topic of DTC hearing aids 32
HIA / FDA Meeting highlights: • FDA stated does not view this behavior as currently illegal, as long as certain criteria are met. • FDA says if the product says “DTC” instead of “OTC,” FDA considers the sale lawful, without any review of the DTC hearing aids. • FDA says it is permissible to sell DTC if the hearing aids are promoted as DTC, conform to the labeling requirements and remaining conditions of sale and are sold to patients 18 years or older. • FDA believes hearing aids are NOT OTC but can be sold DTC. 33
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