managed care

Navigate the Managed Care Maze

Here are six tips on how to maintain profitability with managed care plans.

Tara Rosenzweig, Contributing Editor

Managed care plans enable you, the eyecare practitioner (ECP), to attract patients — something that can increase your practice's revenues. Yet all managed care plans are not equal. Each has its own rules and levels of reimbursement that can, at times, frustrate ECPs, office administrators and patients. But regardless of how you feel about managed care plans, it's clear that such plans represent a healthy share of the patient population.

“I don't have hard numbers, but I can tell you that in the past three years, the shift from private-paying patients to third-party payer systems has been dramatic, and this is despite the prevalence of out-of-work folks without employer-based insurance coverage,” explains optometrist Kimberly K. Reed, associate professor at the College of Optometry at Nova Southeastern University, in Fort Lauderdale, Fla., who also practices privately in Davie, Fla. “The private office used to be about 70% private payers to 30% third-party payers, but in the last six months, it's been about 25% private payers to 75% third-party payers.”

Optometrist Sheldon Kreda of Advanced EyeRx in Lauderhill, Fla. adds, “Managed care does put patients in the chair. These are patients we don't have to fight for with discount inducements or high-cost advertising.”

Still, getting the most out of managed care plans can be similar to navigating a maze, in that it can be a challenge.

As a result, your colleagues offer you six tips on how you can successfully navigate this maze and arrive at both optimum reimbursement and increased profits.

1 Do your research

Be discriminating about the plans you accept, says optometrist Scot Morris of Eye Consultants of Colorado in Conifer, Colo.

“The power lies in the hands of the end users — the doctors and the patients. If you have a problem with a company — don't work with them. There is no reason that you can't build a practice around other companies,” he explains. “If you provide effective, efficient care with great customer service, the patients will come.”

Optometrist Ben Gaddie, of Gaddie Eye Centers in Louisville, Ky. warns against signing up with plans that require the use of specific labs.

“I've found that the reimbursement for using insurance-specified labs generally isn't enough to cover the optician's time and overhead costs,” he explains.

Dr. Kreda agrees. “I've personally found that very often, the labs that are specified by an insurance company take an excessive amount of time to make glasses,” he explains. “As a result, the patient winds up blaming us for poor service and ends up going elsewhere in the future.”

Dr. Kreda also suggests you steer clear of plans that require you to provide goods and services at fees that appear to all but eliminate potential profit.

“Some companies are taking second pairs and services and products that they don't cover and making it mandatory that we provide these materials and services at very deep discounts,” he explains.

Dr. Gaddie adds that you should take the time to understand the opportunities to profit more from the plans to which you belong.

“If the main metric by which you can increase your reimbursement is by upselling options on lenses, for instance, then you need to know that,” he says. “Some plans, when you upsell options, you actually end up getting penalized, in terms of reimbursement. You really have to understand the risk and rewards of how you approach patient sales in the optical as it relates to the managed care plans.”

2 Adopt the medical model

Most optometrists aren't getting reimbursed for anything other than vision insurance or ‘refractive’ services,' limiting their income, says optometrist Paul Karpecki, research director at the Koffler Vision Group in Lexington, Ky.

“The most successful practices in the country — the ones in the top 5% of income levels — receive about half their income from medical reimbursement. And this is because the optometrists in these practices have developed a medical model, in which they are on the panels of medical insurance companies and are being reimbursed for medical services,” he explains. “Keep in mind that these O.D.s don't do less business in their opticals or with their contact lens services. In fact, those services are equal to or above the average optometric practice. This is because the medical model also drives the optical and contact lens parts of the practice.”

To receive reimbursement for medical services, the first thing you must do is obtain a copy of the patient's medical insurance and vision insurance, says Dr. Gaddie.

“If you get into the exam room and determine the exam is medical in nature and not a vision exam, you have all the information you need to bill the patient's medical insurance,” he explains. “And doing so allows your patients to both recognize and realize that you provide medical eye care in addition to refractive eye care, which will likely bring them back for other ocular health issues. Adopting the medical model is really just a matter of you consciously changing your mindset.”

Optometrist Arthur Medina, founder and board president of Optometric Medical Solutions, a consulting firm that helps optometrists adopt the medical model, agrees with Dr. Gaddie: “It's all about changing your practice culture from the initial phone call, scheduling the appointment, to the exam room discussion with the patient. It's all about patient care,” he says.

(Although not every state currently allows optometrists on the panels for medical care, the Harkin Amendment — part of the Patient Protection and Affordable Care Act of 2010 — is designed to outlaw discrimination against optometrists and other providers by health plans, including self-insured ERISA plans. That said, the amendment could be repealed. The American Optometric Association, among other organizations, however, is working on preventing this from happening.)

Optometrist Gary Gerber, founder and senior consultant of the Power Practice, a practice-building consultancy based in Franklin Lakes, N.J., says building a medical model practice can result in you making the same amount of money on far fewer non-insurance patients as patients belonging to insurance plans.

“The challenge is: Can you set up your office as such that you can get one out of every eight or nine patients to pay out of pocket?”

Dr. Kreda says his practice always offers the patient the option of getting their medical care through his practice, and that some do choose to pay out of pocket. He adds, however, that it also discourages patients who would like to remain with his practice, but can't because it isn't economically feasible for them to do so.

Further, he says that the “no-insurance” approach isn't necessarily feasible for every practice.

“If you're very strongly dependent upon just a few large employers, you almost have to accept insurance to stay in business, he says. “If, however, you're in an area that has very few competitors, you can probably say, “I don't accept insurance, but if you want to get reimbursement, I'll give you a bill, and you can submit it to your insurance company. It's very practice- and area-dependent.”

Optometrist Ted McElroy of Tifton, Ga., says you could offer your own “vision benefit plan” to businesses in your community as a means of building a medical model practice.

“You go in, and you offer a sort of ‘in-house’ vision service plan, where you give a certain percentage or dollar amount off of services or materials,” he explains. “Offering that to the employer — at no cost to that employer — you've also given them a value-added benefit they can offer to their employees and their families.”

(For further tips on how to adopt a medical model practice, see “10 Steps to Building a Medical Model Practice” at www.optometric.com/article.aspx?article=104933.)

3 Outsource your coding and billing

It's almost impossible for small practices to hire a staff member to exclusively handle billing and claims, due to the costs involved, says Dr. Karpecki.

“A coding and insurance expert might require a salary of $50,000 to $60,000 a year,” he says. “A person who can effectively submit claims, verify insurance and follow accounts receivable or update credentialing can be a full-time job.”

Dr. Medina also acknowledges the challenge optometrists face in handling medical billing and coding. Specifically, he says it's very difficult for any one practice to have the resources, professional knowledge and volume of cases to justify having a medical coding professional or department for medical coding and billing in the practice.

The solution: Outsourcing your medical billing.

“Companies exist that allow doctors to practice medicine and get high reimbursement for their services,” says Dr. Medina.

4 Drop low-paying plans

Look at the net cost of the managed care plans to which you belong (including administrative costs) annually, and rank the plans from the lowest net to the highest net. Then, drop the lowest-netting plan, says Dr. Gerber.

Dr. Gaddie says optometrists will be surprised when they take the time to learn the mechanics of insurance payment, which are very complicated.

“I've been shocked that some plans that I thought were my best plans were my worst, and some plans I thought were terrible turned out to be not nearly as bad as I had judged them to be initially,” he says.

Dr. Gerber says he can't think of a single client who said ‘I dropped the lowest netting plan, and it was a mistake, and I had to rejoin.’ “It's never happened,” he says.

Instead, he says, they report seeing fewer patients and making just as much — or more — money.

5 Provide patient education

Because several patients don't understand their managed care plans, some express anger over fees, which can prevent reimbursement for your services. As a result, be sure a staff member obtains the patient's insurance information before the patient arrives for his appointment. This way, he can be told well in advance what their plan(s) covers, says Dr. McElroy.

“I think when patients hear about their coverage via phone instead of at the front desk when presenting for the appointment, it gives them a chance to calmly mull it over, and it makes them more accepting,” he says.

He adds that it's important to let patients know you understand their point of view and want to help them, should they display dissatisfaction or anger with their coverage.

“Make sure you or your staff member says, ‘I understand you’re frustrated, but be assured we'll be happy to work with you to ensure your coverage benefits you the best it can,” Dr. McElroy says.

Dr. Gaddie adds, “Let the patient know you'd be happy to get a representative from the insurance company on the phone, and that you'll provide the patient with the best care under the circumstances.”

Dr. McElroy says he's found that letting patients know all their options and the limits of their plans upfront can lead to patient loyalty, should their insurance change.

Dr. Reed says she has her staff provide patients with printouts of the specific benefits to which the patient is entitled.

“It's fairly easy to interpret the benefits forms, and once the patients see them in black and white, they gain a more clear understanding of their benefits,” she says.

6 Upsell

Offer patients options beyond what's included in their managed care plans, recommends Dr. Morris.

“Would you rather make $5 on 10 patients via their insurance coverage or $50 on one patient?” he asks. “If you outline the specific benefits of a product or service to a patient, that patient will see value in it, making them likely to pay out of pocket. The bottom line is that you don't have to sell only ‘covered’ products and services.”

It's more than likely that managed vision care plans are responsible for delivering patients to your practice. Yet in order to get the most out of these plans, you must learn how they impact patient care as well as your practice's operations and finances. Knowledge of the six aforementioned tips should help you to understand the impact and ultimately weave through the managed care maze. OM