Cochlear Americas Obsolescing 3G and Sprint Processors

January 2010

Editor: It's a fact of life in today's world that technology marches on and older products become obsolete. That's just what happened with Cochlear's 3G and Sprint processors. Here's the story, courtesy of Bob MacPherson's bhNEWS.

~~~~~~~~~~~~~~~~~

Cochlear America's philosophy of lifetime commitment to our recipients means we strive to bring improved sound processor technology to all of our customers. We are now approaching the final lifecycle phase of two of our products: the NucleusR SPrintT and the Nucleus ESPritT3G Sound Processors. The design of these products incorporates various components that are in short supply, and that we anticipate will no longer be commercially available in the near future. As a result, it is necessary for us to obsolete them in the United States and Canada. Therefore, today we're announcing the obsolescence of the SPrint and ESPrit 3G Sound Processors to be effective June 30, 2010.

As you know, discontinuing a sound processor can take various forms including cessation of the sale, the service, or both the sale and service of the device. Today, in the United States and Canada, the SPrint and ESPrit 3G Sound Processors are no longer offered for sale, nor have they been available for 5 years. Today, almost 65% of our recipients who have used these products have already upgraded to newer technology. For those recipients who have not yet upgraded, Cochlear will continue to provide service and support for these devices through June 30, 2010. New Cochlear service agreements are no longer available for these products; however, current service agreements and product warranties will be honored for their remaining terms.

Many have asked about the release of our newer technology for Nucleus 24 and Nucleus 22 recipients. While release dates are not yet known, we anticipate the potential release of the next commercially-available technology for the Nucleus 24 recipients may occur in approximately 18 months. For Nucleus 22 recipients, the next commercially-available technology may become available in approximately an additional 12-24 months thereafter. These estimates are just that, and depend upon a lot of variables, including FDA approvals. Please do not make any promises or commitments based upon these estimates.

We recognize this obsolescence, in some cases, may require patients to upgrade to technology that is not the newest on the market. Due to technology constraints, we regret that this may be the situation for some. We understand that this may be a difficult time for many individuals. To help them during this period, we have developed several assistance options.

1. Discount for future technology: With the upgrade to the Nucleus FreedomT, a recipient will receive a $2,500 coupon that can be applied towards their next future sound processor upgrade. Note: This offer is not available to recipients with Medicare, Medicare Advantage, Medicaid, or any other federal health care program coverage.

2. Medicare/Medicaid support: For those patients with Medicare or Medicaid (in the states we are contracted with) coverage, Cochlear can process the order and submit the claim on the recipient's behalf. As a Medicare provider since 1992, Cochlear complies with existing Medicare coverage guidelines which provide for replacement of a sound processor if the original is lost, stolen or irreparably damaged. When the SPrint and ESPrit 3G Sound Processors are officially obsolete, and in need of repair, they become irreparably damaged and may be subject to replacement by Medicare, Medicare Advantage, and in most cases, Medicaid.

3. Commercial insurance support: These plans generally follow similar replacement guidelines as Medicare. To assist recipients, we've partnered with Access MediQuipR for upgrade sales and insurance support. For most private health insurance carriers, Access MediQuip will help the recipient with the commercial insurance process.

4. Financing plans: Through our partnership with CareCreditR, recipients can take advantage of low monthly payment plans and financing options which may make upgrades accessible.

5. Sound Lending Option: If all of the above options have been exhausted, and recipients find themselves out of sound and without service options, after July 1, 2010 they will have access to the Sound Lending Program, a generous loaner program. Further details on how recipients will access this program and apply for this service will be available prior to July.

We realize that transitions can be difficult. Our goal in this transition is to make certain our recipients have options to obtain access to new technology and are always "in sound".

For Cochlear Americas Recipient Services assistance programs, click here.