Estimating Demand For Medicare Payment Of AAC Devices

A. Introduction

For the past decade, the demand for Medicare payment for AAC devices has been substantially restricted by the AAC Device National Coverage Determination. This guidance creates a strong deterrent to the filing of Medicare claims. It also deters the pursuit of appeals to Medicare Administrative Law Judge hearings, where the national coverage determination no longer has binding effect. Although as many as 47,000 Medicare beneficiaries may need AAC devices, and even though every known administrative law judge review of an AAC device appeal has approved the device, there are only 5 known Medicare ALJ decisions related to AAC devices.

For this reason, any change in demand for Medicare payment for AAC devices will depend completely on the withdrawal and/or replacement of the existing AAC device national coverage determination. Moreover, following such a policy change, there will not be an immediate increase in demand for Medicare payment for AAC devices. Both the pace and timing of the increase in demand will be controlled by the relatively small number of Medicare beneficiaries who need AAC devices and the small cadre of speech-language pathologists (SLPs) who currently provide AAC assessment and treatment services to adults. It is estimated that these factors will combine to limit the growth of AAC device demand from between 100 - 200 claims in the first year after a policy change is enacted to 500 - 1,291 claims per year after five years. Based on this estimate, the cumulative number of Medicare AAC device claims will be between 1,300 - 3,300 over five years.

1. Need and Demand are Distinct Concepts

The concepts of AAC device "need" and AAC device "demand" are distinct concepts. AAC device need is a measure of speech and/or language impairment. The need for AAC intervention arises when, due to expressive communication disability, a person is unable to meet the communication needs arising in the course of his or her daily activities. By contrast, demand for Medicare reimbursement requires consideration of a variety of additional non-medical factors. The most important is the availability of certified SLPs with expertise in AAC treatment approaches who conduct AAC needs assessments. Because AAC device need and demand may differ significantly, this section will present estimates for both factors.

B. Total Medicare AAC Device Need

It is estimated that there are fewer than 47,000 persons in the United States who are Medicare beneficiaries in need of AAC devices. This estimate is derived from demographic studies that measure the prevalence of severe communication disability among different populations of individuals with significant disabilities. Persons with severe communication impairment or disability commonly are defined as being "unable to get their message across using speech" (Bloomberg & Johnson, 1990), "as having a condition other than hearing impairment that prevents them from using speech independently as their primary means of communication" (Matas, Mathy-Laikko, Beukelman & Legresley, 1985), and/or as "non-speaking" (ASHA, 1981; 1991; DeRuyter & Lafontaine, 1987; Lafontaine & DeRuyter, 1987). Persons needing AAC devices are a sub-set of persons with severe communication impairments. Researchers recognize that clinicians further must assess people with severe communication impairments to identify those with AAC needs. (Bloomberg & Johnson, 1990). While there are precise estimates of the prevalence of severe communication impairment in the general population, there is no precise estimate of the sub-set population needing AAC devices.

In 1990, Bloomberg & Johnson reported on a study that sought to measure the prevalence of persons with severe communication impairments in Victoria, the second most populous state in Australia, which has more than four million residents. The study was based on a questionnaire and interview directed to all the health care facilities that provided services to persons with disabilities in Victoria. In total, 1,250 facilities were identified and contacted, and 85 percent responded. These responses identified 5,034 nonspeaking individuals, which equals 0.12 percent of the general population. This study also reported a rough equivalence in the age distribution of the study population: 46 percent of the persons identified as having severe communication impairments were age 21 or younger; 54 percent were older than 21 years (Bloomberg & Johnson, 1990).

The estimate provided here is based on the comprehensive 1990 Bloomberg & Johnson study, which measures severe communication impairment in the general population. Since the Bloomberg & Johnson study did not quantify the need for AAC devices within that larger population, this estimate is a "not to exceed" calculation of AAC device need among Medicare beneficiaries.

1. Calculation of Estimated Prevalence of AAC Device Need among Current Medicare Beneficiaries

Table 1 on the following page describes the calculation of estimated AAC device need among Medicare beneficiaries. There are an estimated 46,604 Medicare beneficiaries with severe communication impairments. Because persons with AAC needs are a sub-set of a class of persons with severe communication impairment, this total, 46,604, represents the estimated maximum ("not to exceed") number of Medicare beneficiaries who need AAC devices.

 

Table 1: Estimating Number of Medicare Beneficiaries with Severe Communication Impairment

Estimating Persons with Severe Communication Impairment in the United States

Prevalence of Severe Communication Impairment in the General Population

Current United States Population (Source: U.S. Census Bureau, Sept. 1999)

Estimated Number of Persons with Severe Communication Impairment in the United States

0.12 percent

approx. 273,500,000

328,200

Estimating the Percent of Medicare Beneficiaries among the United States Population

Estimated Number of Medicare Beneficiaries in the United States (Source: HCFA, June 1999)

Current United States Population (Source: U.S. Census Bureau, Sept. 1999)

Estimated Percentage of Medicare Beneficiaries among the United States Population

38.8 million

approx. 273,500,000

14.2 percent

Estimating the Number of Medicare Beneficiaries with Severe Communication Impairment

Estimated Number of Persons with Severe Communication Impairment in the United States

Estimated Percentage of Medicare Beneficiaries Among the United States Population

Estimated Number of Medicare Beneficiaries with Severe Communication Impairments

328,200

14.2 percent

46,604 persons

C. Demand for Medicare Reimbursement for AAC Devices

At present, demand for Medicare reimbursement for AAC devices is severely constrained by the AAC Device National Coverage Determination. Any future change in demand for Medicare reimbursement for AAC devices will depend completely on the withdrawal and replacement of the current national coverage determination. Even after Medicare adopts a new AAC device coverage policy, there will not be an immediate increase in demand. Rather, if the new policy reflects current standards of professional practice, as outlined in Section 3 of this Formal Request, there will be a slow and steady increase in demand over a period of years.

Both the size and timing of any increase in demand is controlled by the relatively small number of Medicare beneficiaries who need AAC devices and the small cadre of SLPs who currently provide AAC assessment and treatment services to adults. The small number of SLPs who provide AAC assessment and treatment services, particularly to adults, is the most significant factor that will prevent an immediate increase in demand for AAC devices, since there is a significant gap in the United States and in other countries between the number of people with severe communication impairments that could benefit from AAC assessment and treatment services and the supply of SLPs and other professionals who can provide those services (NIDRR Consensus Report (1992); Bloomberg & Johnson, 1990; Collier & Blackstein-Adler, 1998). This inequality in services-distribution largely reflects the historically greater availability of payment for AAC assessment and treatment through public school programs and Medicaid. Many SLPs are located in public elementary and secondary schools where they are unable to serve adults. (Simpson, Beukelman & Bird, 1998). In addition, communication needs of adults, particularly those with acquired communication impairments are different from those of children and adolescents with congenital communication impairments (Hirdes, Ellis-Hale, & Pearson-Hirdes, 1993). While these statistics are changing (i.e., the number of SLPs who provide AAC assessment and treatment services is steadily increasing), these factors are not susceptible to immediate change and as a result will not contribute to an immediate increase in AAC device demand following a change in Medicare policy.

Another contributing factor that will constrain change in demand for AAC devices is the very strong deterrent effect of the current AAC device national coverage determination. For example, during the past two years, based on the uniform success that has been achieved by those beneficiaries who pursued Administrative Law Judge hearings, SLPs have been encouraged to consider filing Medicare claims for AAC devices. Notwithstanding those efforts, the demand for AAC devices remains almost non-existent. Based on this experience, it is anticipated that a significant effort will be required to educate SLPs about a change in Medicare policy permitting payment for AAC devices. Only a few of the SLPs who provide AAC assessment and treatment services to adults are expected to quickly take advantage of a positive policy change and submit AAC device claims. The majority is expected to wait until they are able to assess the implementation of the new policy by Medicare decision-makers. Taken together, these factors will contribute to a slow, small, steady increase in demand for AAC devices over a period of years.

Attempting to quantify future Medicare AAC device demand necessarily requires a degree of speculation. However, based on the factors discussed above, it is reasonable to estimate that in the first year after Medicare announces a change of its coverage policy, approximately 100 - 200 AAC device claims will be submitted by Medicare beneficiaries. If those beneficiary claims for AAC devices are not denied, it is estimated that AAC device claims will increase by 50% each year for the first five-year period. Table 2 on the following page estimates demand for AAC devices over a five-year period.

 

Table 2: Estimating Change in Demand for AAC Devices after Withdrawal or Replacement of National Coverage Determination

 

Year

Prior Year Total Number of Claims

Total Number of Claims assuming a 50 % increase in demand per year

1

n/a

100 - 200

2

100 - 200

150 - 383

3

150 - 383

225 - 574

4

225 - 574

337 - 861

5

337 - 861

500 - 1291

Based on the foregoing, it is estimated that demand for AAC devices may increase from 100 - 200 in the first year after Medicare coverage policy changes, to 500 - 1291 per year in the fifth year. Over this five-year period, it is estimated that there will be approximately 1,300 - 3,300 AAC device claims.

D. Annual Cost Estimates of Medicare AAC Device Coverage

The total cost to Medicare of a policy change supporting AAC device coverage will be very small due to the exceedingly low number of Medicare beneficiaries who are estimated will file AAC device claims. In addition, this Formal Request seeks to establish four categories of AAC devices each of which would be assigned a unique reimbursement rate. It is anticipated that demand will to be divided among the devices in each category.

E. Summary

There are fewer than 47,000 Medicare beneficiaries with AAC device needs. By withdrawing and replacing the current AAC device national coverage determination with guidance and decision making practices that are consistent with the professional literature related to AAC treatment, the Medicare program will experience a slow, small, and steady increase in AAC device claims by these beneficiaries over a five year period. It is estimated that in the first year approximately 100 - 200 AAC device claims will be filed, and that this annual total will increase to 500 - 1,291 devices per year in the fifth year. Thus, it is estimated that over a five-year period, a cumulative total of approximately 1,300 - 3,300 AAC device claims will be filed. Based on this exceedingly low demand estimate, the cost impact to Medicare of AAC device coverage policy reform will be minimal.