(1) The department will pay the lowest of the following for covered hearing aid services and items:

(a) the provider's reasonable usual and customary charge for the service or item;

(b) the amount specified for the particular service or item in the department's fee schedule. The department adopts and incorporates by reference the department's Hearing Aid Fee Schedule as provided in ARM 37.85.105(3); or

(c) 100% of the Medicare Region D allowable fee.

(2) For items or services where no Medicare allowable fee is available, the fee schedule amount in (1)(b) will be calculated using the following methodology:

(a) Establishing a fee for a service that has been billed at least 50 times by all providers in the aggregate during the previous 12-month period. The department will set each fee at 44% of the average charge billed by all providers in the aggregate.

(b) For supplies or equipment, reimbursement will be set at 75% of the manufacturer's suggested retail price. For items without a manufacturer's suggested retail price, the charge will be considered reasonable if the provider's acquisition cost from the manufacturer is at least 50% of the charge amount. For items that are custom-fabricated at the place of service, the amount charged will be considered reasonable if it does not exceed the average charge of all Medicaid providers by more than 20%.

(c) For services where utilization cannot meet the methodology outlined in (a), the fee will be set at the same rate as a service similar in scope.

(3) The provider may bill Medicaid for a dispensing fee, as specified in the fee schedule adopted in (1)(b). The dispensing fee covers and includes the initial ordering, fitting, orientation, counseling, two return visits for the services listed, and the insurance for loss or damages covered under a one-year warranty.