The time has finally arrived. The Food & Drug Administration’s new over-the-counter (OTC) hearing aid regulations are now in effect and health plans are starting to explore what it means for them. Among the many questions they may need to grapple with, a few are particularly salient:
– How will the new rules impact their benefit offerings?
– What new opportunities will arise?
– What potential pitfalls should they be aware of?
Introducing OTC hearing aids
First, let’s examine the new regulatory framework the FDA established. For the first time, all hearing aids will fall under two categories: prescription hearing aids and OTC hearing aids.
– Prescription hearing aids will require a consumer to have a prescription for a hearing aid from a physician, audiologist or a licensed hearing instrument specialist.
– The other – brand new – category of hearing aids will be available over-the-counter to people 18 and older with perceived mild to moderate hearing loss without the involvement of a licensed hearing care professional. These OTC hearing aids do not require a prescription.
This OTC category breaks down further into two types of products: self-fitting OTC hearing aids with a few preset settings that users can control either through an app or volume control wheel; and the second type, which is not self-fitting – basically an amplifier with volume control.
As of now, there are no OTC hearing aid products on the market since the rules didn’t go into effect until October 17, 2022. Beginning later this year and continuing into the first half of 2023, however, these products will likely start to appear.
The availability of OTC devices is expected to increase awareness of hearing care in general and encourage more consumers to address their hearing health needs. These are vitally important goals. Approximately 40 million people have some degree of hearing loss, yet it is widely undiagnosed and untreated. In fact, of the 35 million Americans who could benefit from hearing aids, only one-third use them.¹
The new rules don’t require health plans to offer OTC hearing aids to their members. It’s up to each health plan to make that decision. Thus, it is vitally important to evaluate the pros and cons carefully.
In determining how to respond to the rules, health plans must make several key decisions:
– Benefit design: If an OTC hearing benefit is offered, should it be a stand-alone OTC benefit or integrated with a prescription hearing aid benefit?
– Product safety and efficacy for members: How to confirm medical necessity of OTC products for members – such as in-person or virtual assessments – to improve the quality of care?
– Delivery model: Whether to ship OTC products to a hearing clinic where the consumer can receive professional diagnosis, fitting and support, or ship directly to the consumer’s home thereby providing convenience but no professional support (and increased fraud risk), or offer both options?
– Testing: Whether to require members to complete a hearing test (in-clinic or virtual assessment) to certify that the hearing loss is compatible with the OTC solution, or severe enough to require prescription hearing aids?
– Aftercare service: Whether to offer virtual support and/or an optional care package purchased by members at a clinic?
The regulations may provide an opportunity for health insurers to attract new members – and retain existing ones – with hearing loss. The potential market is huge – an estimated 25.4 million U.S. residents aged 12 years or older have mild hearing loss, and another 10.7 million have moderate hearing loss.2
Health plans could, for example, consider covering OTC hearing devices as part of the hearing benefits package provided to their Medicare Advantage plan members. Their message: members now can receive an expanded hearing benefit which includes an OTC hearing aid for those who qualify at a nominal or no out-of-pocket charge. Additionally, members who would prefer a prescription hearing aid could be covered for prescription devices, which would likely include an out-of-pocket expense.
Health plans offering the OTC benefit can also leverage the opportunity to educate members about the significant role hearing aids can play in improving their overall health. Enhanced hearing ability may lead to several positive health outcomes such as improvements in cognitive ability, mental health and balance, and a more active social life.
Untreated hearing loss, on the other hand, is associated with social isolation and loneliness and can be a gateway for many comorbidities including dementia, depression and increased risk of injury-causing falls.
All these comorbidities result in higher healthcare costs. Individuals with the untreated hearing loss incurred, on average, 46% higher total health care costs — $22,434 per patient— versus their ‘normal’-hearing peers over the course of a decade, with health plans covering $20,403 of this amount, according to a Johns Hopkins study. 3
Health plans can also combine an expanded hearing benefit with member education on how to use hearing aids and the importance of wearing them at least eight hours daily. Under-utilization is a significant problem – slightly more than one-third of people with hearing aids wear them less than eight hours a day.4 And compliance decrease over time.
– Fraud. Health plans should be on the alert for potential pitfalls arising from the new regulations. For example, in furtherance of the laudable goal of enhancing access and affordability of hearing healthcare, the FDA does not require that a hearing health professional verify a member’s hearing loss to be eligible for an OTC device. That creates the potential for misuse of the benefit by members who get an OTC aid, even though they don’t have hearing loss so that they can give it to a family member or friend in need.
– Unclear coverage requirements. The regulations limit the OTC hearing aid category to individuals with “perceived mild to moderate hearing impairment.” But the regulations don’t define or explain what that term means. Rather, they rely on consumers to determine whether their perceived level of hearing loss is mild or moderate based on having experienced common symptoms such as difficulty hearing while on the phone. Basing a diagnosis entirely on consumers’ subjective assessments can be inaccurate and may lead to potential problems.
Consider, for example, a member who thinks she has moderate hearing loss and receives an OTC hearing aid under her insurer’s benefits plan. Her hearing loss, however, is actually in the moderate to severe range, which is beyond the capability of OTC aids. The device improves her hearing only marginally, and after a few months, she is still having trouble, especially in restaurants and other noisy environments. So, she requests a prescription hearing aid that could substantially improve her hearing. This puts the insurer in a difficult situation, since she previously exhausted her hearing benefit for the year when getting the OTC device.
– Potential for overamplification. The regulations reduce the overall maximum output limits in recognition of the need to make OTC hearing devices safer. Nonetheless, without clinical oversight by hearing care professionals, consumers may still be subject to an increased risk of overamplification of loud sounds by these devices. Instead of improving the hearing health of the consumer, the result may be additional hearing damage.
– Impact on member satisfaction. Member satisfaction is key for health plans to stay competitive. For Medicare Advantage plans, a positive member experience is critical in achieving 5-star ratings. With the introduction of the new category of OTC hearing aids, there is lack of clarity in coverage requirements and clinical oversight in members selecting the most appropriate hearing aids on their own. Additionally, not all members can adjust hearing aid settings by themselves to address their unique needs, leading to disappointment. Health plans can design hearing benefits that can mitigate this potential issue while maximizing member satisfaction at the same time.
Hearing loss is the third most chronic physical condition in the U.S. yet is largely untreated. By allowing retail sales of affordable hearing aids, the FDA regulations go a long way in helping consumers address this challenge yet could result in risk to health plans. For health plans, now is the time to carefully weigh the potential value of an OTC offering against the risks and concerns.
About Thomas Tedeschi
Thomas J. Tedeschi, Au.D. is the Chief Audiology Officer for Amplifon Hearing Health Care. Dr. Tedeschi, the author of numerous articles in clinical and practice management publications, is primarily responsible for Amplifon’s governmental affairs. Amplifon partners with health care organizations to administer hearing benefits to their members.
- MarkeTrak 10:Hearing Aids in an Era of Disruption and DTC/OTC Devices, https://tinyurl.com/yyy64gaz
- Goman, Adele M, Am J Public Health 2016 Oct;106(10):1820-2. doi: 10.2105/AJPH.2016.303299. Epub 2016 Aug 23. Prevalence of Hearing Loss by Severity in the United States
- Johns Hopkins Bloomberg School of Public Health (2018), “Patients With Untreated Hearing Loss Incur Higher Health Care Costs Over Time,” news release (November 8), https://tinyurl.com/ychlw2yc
- EuroTrak UK 2018, BIHIMA