When the CI Processor
Warranty is Up

(Updated 2014)

By Liesel Thomas, Colorado H&V

Ed Note: This is an updated version of our article of the same title that ran in The Communicator in the summer of 2010.

Families with private health insurance face significant out-of-pocket costs after the cochlear implant sound processor warranties expire and a decision must be made to purchase extended warranty coverage or pay for repairs and replacements as needed.

Our household has two daughters with bilateral cochlear implants. I had sticker shock when our warranty was up and I discovered what the continued financial costs would be as they grew up for extended warranties and new technology. We have upgraded my oldest daughter’s processors twice now and gone through the process of obtaining extended warranties many times.

Our younger daughter has a particular talent for permanently losing processors. In a two-year period she lost three processors, (is this a record?) despite my increased vigilance. The first two were covered under the one-time loss per ear provision. With the loss of the third processor, I am fairly sure $8,500 was literally flushed down the toilet. Families with children who have hearing aids and cochlear implant processors understand the heart-dropping panic upon discovering a device is lost.  I have spent many frantic hours searching for lost hearing aids or processors and have found them in many unique places. I once found one, thankfully magnetized, in a heating vent.

As you might imagine, we have also needed processor repairs and parts replacements. When the processors are out of warranty, I have personally chosen to purchase an extended warranty plan for repair and loss because I don’t dare not to. For others with perhaps less of a loss risk, a less expensive repair only plan, or even choosing to pay for repairs and parts as needed without an extended warranty could be options.

What do parents need to know about these warranties, replacement and repair costs?  Implant manufacturers change these policies regularly. Parents are wise to ask and ask again to verify this information when making decisions about repairs, replacements and purchasing warranties.  More than one company informed me they were in the process of considering changes to their warranty plans or bringing back advanced purchase plans.

Sound Processor Manufacturer’s Warranty

A recipient has a three to five-year warranty after implantation for external parts with all three cochlear implant companies. MED-El has offered a five-year warranty since 2011, recently expanding their industry leading coverage to include subsequently purchased processors and many components. Cochlear Americas began offering a five-year warranty for implant recipients beginning February 1, 2013. Advanced Bionics occasionally offers a five-year warranty through special arrangement on older processors. Recipients implanted earlier with Cochlear remain at the three-year warranty. These first warranties include a one-time loss replacement. (This coverage must later be purchased for processors other than MED-El.) Later upgraded processors (not received at the time of implantation) have a three-year warranty with the exception of MED-El, which offers five years. All three companies offer a ten year warranty for the implant itself (the internal device).  

New Sound Processors

When a new generation of cochlear implant processor comes out on the market, parents are naturally interested in pursuing a possible upgrade. Recent changes in many insurance policies specifically exclude upgrades until a prior processor is obsolete or beyond repair, noting in some detail that waterproof or lighter weight technology does not serve as a reason for insurance to approve a new processor.  Insurance companies vary greatly on if and how much they will cover toward a new processor. While some “trade in” value may be possible through Advanced Bionics and Cochlear and through MED-El when a new processor is released, that credit is small compared to the cost of a new processor.  

The decision to upgrade to the newest processor available or to wait for future developments in processors should be weighed carefully. Parents are often frustrated after jumping through hoops and paying a significant portion out of pocket to discover the latest upgrade made a minimal impact on a child’s listening ability and function, whereas if they had waited for the next processor that came out after that it could have made a huge difference.   

After the Warranty: Repairs and Replacement Costs

After the original processor warranty period is up, a broken processor might be partially covered by private insurance. A functioning processor might be eligible for replacement by newer technology (note that the word “upgrade” is intentionally avoided here) based on each insurance plan’s criteria. Insurance deductibles and co-pays must also be factored into the cost.  

Health insurance carriers may cover and deem medically necessary replacement sound processors based on the audiologic test results for the individual child and information that predicts improved performance with the use of new technology.

As a general rule, the “useful life” of a sound processor is considered to be five years, though new processors have been approved in some instances before those five years are up. Families with a child covered by Medicaid typically are eligible for a processor upgrade after five years, although this varies a little from state to state.

Farther down the line, a processor will become obsolete and this makes a solid case for a replacement to an insurance company. Rhetzie Felton, a reimbursement specialist from Advanced Bionics, notes that families should not wait until the child’s processor is held together with duct tape to begin the process of seeking insurance coverage for a new processor. In fact, if one waits too long, a processor may become so old it does not qualify for a trade-in credit for companies offering this.

Cochlear implant processors are considered an external prosthetic or durable medical equipment (“DME”). The DME benefit on an insurance plan may cover repairs and replacement parts that are not under warranty.  If no durable medical equipment benefits exist in a given plan, some have had success with billing codes under major medical benefits.

For accurate benefits information you need the code from the Health Care Common Procedure Coding System (“HCPCS”). For example, the code for durable medical equipment is L8619. The implant audiology center typically writes the letter of medical necessity and shares the HCPCS code, though some parents are proactively submitting a draft letter to move the process along, especially when a clinic is far from home.

Purchasing Extended Warranties

Once the manufacturer’s warranty is coming to an end, you may purchase an extended warranty. It is important to not allow your warranty to lapse or your extended warranty plan options may be limited. For example, one may not be allowed to purchase a plan including loss with some companies.

The cost of the extended warranty can be weighed against the cost of repairs if you were going without a warranty. It might be more economical to pay for a repair if a processor breaks, than pay in advance (often more than the cost of a one repair) and perhaps not need that coverage.  There is also the possibility of medical insurance covering repairs, although that greatly varies and should be verified before a decision is made.  There is a warranty on repairs that would prevent multiple repair payments in one year.

However, the cost of an extended warranty that includes loss would be vastly cheaper than purchasing a new one out of pocket if the processor is lost.

Parts covered by the extended warranty aside from the processor vary between companies and can be factored into if an extended warranty is worth the money. (See chart.)

Advanced Bionics

Advanced Bionics has both one and two-year extended warranty plans, as well as plans for repair and loss or repair only coverage. Advanced Bionics allows recipients out of the original manufacturer’s warranty up until 60 days past to purchase any extended warranty plan desired.

A family plan discounting the costs of extended warranties is available for two or more people in the same household.

Advanced Bionics bills all insurance companies directly and will assist with insurance pre-authorization and appeals. Reach AB’s Reimbursement Services and Insurance Authorization Team at 877-779-0229 or insurance@advancedbionics.com.

Cochlear

On Cochlear’s website there is a one-year or two-year extended warranty plans, which may include repairs and one-time loss or repairs only.  There is a third option called the Cochlear Care Protection Plan for $330, which covers one-time loss or catastrophic damage.  This option is not advertised on the website, although it is included in the information sent to the recipient when their coverage is expiring.  A Cochlear representative gave an example of a processor being run over by a car as what would qualify for catastrophic damage.  They do not recommend this plan because it does not cover other repairs and parts. Parents need to call and request the form for this option as it cannot be purchased online at this time.    

If a recipient is within 60 days of the manufacturer’s warranty lapsing, one may purchase a plan that includes loss for a fee of $75. If the lapse is greater than 60 days, the only plan available would cover repairs only.

There is a family plan available if there are at least two recipients and four processors that starts at about $2,000 per year.  

Cochlear does not bill private insurance directly, aside from the new addition of Kaiser. They do bill Medicaid, Medicare, and TRICARE.  With a private insurance plan, a recipient must pay up front and then be reimbursed afterwards by their insurance. In some cases, an audiology clinic agreed to receive the equipment and hold it until the insurance reimbursed, to save the family out of pocket costs they could not afford. It is even more important to check if pre-authorization is required and be certain of the terms and conditions, or a family may be left paying entirely out of pocket. A third party DME business may be available with a given insurance plan. (See “Out of Network.”)

The Cochlear Replacement Team dedicated number is 1-866-586-8083 and the website is www.cochlearupgrade.com

MED-EL

MED-EL has just released the most comprehensive warranty plan in the industry, featuring a five- year warranty covering every component of the patient’s multiple processors even rechargeable DaCapo batteries. A one-time theft, loss, and damage claim is included within the original five years of manufacturer’s warranty coverage on all Patient Kit purchases. The maximum allowed claim is one full unit (one audio processor, one coil, one battery pack frame, one coil cable, and one FineTuner). 

Individually purchased components including D coil, D cables, battery pack frame, FineTuner, and DaCapo Chargers are warranted for five years from date of shipment. PowerPacks and other accessories carry a one-year warranty if individually purchased. P Coils, cables and related accessories, as well as disposable batteries, drying bricks and tablets carry a 90 day warranty.

Options for additional warranties after the original five year warranty expires include an extended service contract and a Theft, Loss & Accidental Damage service contract. These are offered one year at a time and cannot be purchased retroactively.

MED-EL has a reimbursement department for the sole purpose of providing reimbursement support to clinics. Reach MED-El support at 888-633-3524 for more information, or email implantsusa@medel.com.

What if the Implant Manufacturer is Out of Network?

Parents may also appeal the “out of network” designation whenever an insurance company has no “in network” option. Another option is to investigate whether an insurance company contracts with a third party durable medical equipment dealer. Businesses like Access Mediquip contract with a variety of insurance companies to provide “in network” contract pricing for Advanced Bionics, Cochlear Americas and MED-EL billed specific insurance plans. These third party dealers are more commonly used for items like artificial joints or pacemakers but they have been used for processors as well. Parents would order the processors or processor kit once approved by insurance through the third party dealer and the dealer than bills the insurance, giving the family “in network” pricing. Consider this if your child’s equipment is approved but will be billed as an “out of network” rate. Ask your benefit specialist through your employer. Note that Access Mediquip is contracted with Cochlear Americas to bill a limited number of insurance plans, not including Aetna, Blue Cross Blue Shield in most states, and United Health Care.

Implant manufacturers change these policies regularly. Parents are wise to ask and ask again to verify this information when making decisions about repairs, replacements and purchasing warranties.