Yes, there is a name for that problem. It may be that he has a central auditory processing disorder, as it sounds like he has difficulty with foreground/background auditory discrimination. (But you'll want an actual auditory processing evaluation to properly diagnose that--from an audiologist.) It is not unusual for children with auditory processing disorders to have difficulty with phonetic decoding, as auditory discrimination of the phonemes of language is a necessary prerequisite for acquiring fluent phonetic decoding skills. It's also not unusual for kids with CAP to be misdiagnosed with ADHD (or sometimes to be co-morbid with ADHD), as it can be hard for them to focus and follow directions, since they can't readily identify which speech sounds in their environment are the important ones. CAP diagnosis would definitely need to be from the medical route, as it is a rare school that has the necessary equipment for the evaluation (almost always, it's hospitals).
