Some Insurance Companies Refusing to Pay for Cochlear Implants

Following are extracts from a May 5 article by John Williams, Businessweek columnist on assistive technology.

See http://www.businessweek.com/bwdaily/dnflash/may2000/nf00505c.htm for full text.

A cochlear implant is an electronic prosthesis which, when surgically placed in the inner ear, partially performs the functions of the cochlear. That's the part of the inner ear that turns sound waves into coded electrochemical signals sent to the brain. The operation is expensive. It can cost as much as $50,000 -- and thousands more with the addition of post-operative speech therapy. But the results are phenomenal. Whole new worlds open up for deaf people who receive cochlear implants. They can take advantage of educational opportunities and join the workforce effortlessly.

Medicaid, Medicare, ChoiceCare/Humana, Aetna, and Anthem Blue Cross & Blue Shield are among the many health-care insurers who now cover cochlear implants. There's a strong economic argument for this. Researchers from Johns Hopkins University in Baltimore recently did a study that found that profoundly deaf children who receive a cochlear implant are more apt to be fully mainstreamed in school and to use fewer support services than similarly deaf children without an implant. The Johns Hopkins study estimated that for a three-year-old child who receives the operation, cochlear implants can save $30,000 to $50,000 in special-education costs for elementary and secondary school. Plus, a hearing child will have an easier time finding a skilled job than a deaf child -- and an employed person becomes at least a partial health-care payer.

Almost 8,000 people in the U.S. have received cochlear implants, including several thousand children. Ninety percent of all health-care providers that work with Englewood (Colo.)-based Cochlear Corp. -- the world's largest manufacturers of such devices -- now cover the operation, says John McClanahan, head of reimbursements for the company. Is Benicorp so different from the other health-care insurance companies?

If Benicorp persists in fighting the case in the courts, it will have paid huge legal fees, perhaps exceeding the cost of the implant. Is this good business practice? Isn't it a better policy to expand the coverage to include the cochlear implant, an expensive but rare specialized operation?