HearUSA Reports Expanded Managed Care Contracts for 2011

October 2010

Expected to Increase Revenues by $3 Million in 2011

HearUSA, Inc. (NYSE Amex: EAR), the recognized leader in hearing care for the nation's top managed care providers, reported that several of its contracted health partners have expanded or reinstated hearing benefits for their members, effective January 1, 2011.

Several plans have enhanced their Medicare offerings for 2011, including Preferred Care Partners (Florida), BCBS Horizon Medicare Blue (New Jersey) and BCBS Medicare Blue HMO (Florida). In addition, Humana Inc. (NYSE: HUM), one of the nation's largest health benefits companies, has reinstated hearing benefits in its 2011 senior HMO product in Florida.

The new agreements will provide hearing aid benefits to an additional 400,000 members who are located in HearUSA's major markets, including Florida and New Jersey. These new agreements are expected to increase revenues by approximately $3 million in 2011 and will bring the total number of enrollees covered by HearUSA's exclusive capitated and fee for service contracts to 2 million. The new and expanded managed care contracts are capitated contracts.

HearUSA has contracts with more than 400 payors in the health plan market, including agreements with the nation's top five largest insurance companies and eight of the top 10. HearUSA also has national partnerships with several major health plans, including Kaiser Foundation Health Plan, Humana Health Plans, and WellCare Health Plans, and has expanded its service agreements to keep pace with the growing managed care Medicare market. The company is also a hearing care provider for the Veterans Administration, providing hearing services to thousands of qualified veterans.

"Partnering with health plans that seek quality care and value for their membership continues to be a key strategy for HearUSA," said Stephen J. Hansbrough, HearUSA's Chairman and CEO. "We have added several new plans for 2011 that will be serviced by our Hearing Care Network, as well as key accounts in our company owned territories. This represents an important segment of our business in an area where HearUSA is generally regarded as the industry leader. We estimate that these enhancements for 2011 will result in a $3 million increase in revenues from the increased directed business and related capitation payments."

Independent studies, like those from the National Council on Aging, have demonstrated the negative impact of untreated hearing loss on quality of life and independence - factors very important to seniors and their families. Despite concerns over reimbursement levels related to national healthcare reform, many plans are continuing to offer important ancillary coverage, including hearing. Full or partial hearing aid coverage helps to defray out of pocket costs and is an important benefit for the Medicare population.

According to Dr. Cindy Beyer, audiologist and senior vice president of professional services at HearUSA: "These plans recognize the important role that hearing plays in our overall health and well-being. By making hearing aids more affordable, plans enable their members to benefit from today's advanced digital technology."

The Better Hearing Institute reports about 10% of Americans, or more than 36 million people, have some degree of hearing loss. Fifteen percent of adult baby boomers (age 45-64) and almost one third of those over age 65 have hearing loss. Increased exposure to noise is cited as a primary cause of hearing loss, which is most often found in males (60%) compared to females.

HearUSA is uniquely qualified to partner with managed care organizations because of its company-owned centers' accreditation by URAC, a leader in promoting health care quality through its accreditation, education and measurement programs (www.urac.org). URAC offers a wide range of quality benchmarking programs and services that keep pace with the rapid changes in the health care system, and provide a symbol of excellence for organizations to validate their commitment to quality and accountability. By contracting with an accredited and qualified hearing care provider network, the health plan ensures that their membership receives quality care, consistent delivery of services and products, and added value features, including discounted rates.

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