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Tackling a Tough Insurance Issue

Here's how your practice can get its insurance department under control.

Richard S. Kattouf, O.D., D.O.S.

Q You have written that allied health employees stay with the doctor, on average, for two years. Having been in private practice for 22 years, I have found this short tenure has the greatest impact on the position of insurance coordinator. I find it difficult to oversee their work, and when they leave, I find a disaster in their wake. How can I get this department under control?

Dr. R. L. Marcelo
via e-mail

A: To answer this question, let us first examine the issues that impact reimbursement:

► While optometry is the only allied health profession that is not primarily fee-for-service (FFS), we are moving toward an FFS model.

► Managed care vision insurance significantly lowers your usual and customary fees on products and services. The workload with the patient is not changing, yet net income is reduced.

► Commercial and corporate optometry has captured more than one-third of the vision market.

► Internet opticals are projected to grow rapidly, taking business from the private O.D. This same phenomenon has occurred with contact lenses.

The conclusion? Doctors who maximize their TPA license find that medical reimbursements can garner the highest net income because little or no cost of goods are associated with these services. And, much of the collection of this data can be delegated to ancillary personnel.

Not the same $10,000

Here is some food for thought: In the same 30-day period, an office receives $10,000 in managed care reimbursements and $10,000 from various medical insurance carriers. Which $10,000 delivers the higher net income? The net from the managed care insurance is about 14%. The net from the medical insurance could be as high as 50%. Keep in mind the cost of goods. Plus, if you are charging at the level of ophthalmology, you will receive the usual, customary and reasonable rates for the region. By employing an experienced coder and biller, medical insurance reimbursements should be your greatest profit center.

Now that we've examined reimbursement issues, let us consider two common real-life scenarios:

► A doctor allowed his trusted manager/medical biller to work unchecked for almost two decades. The employee embezzled tens of thousands of dollars annually. How can you prevent such a disaster? Awareness. Implement check-and-balance systems that enable you to keep a pulse on this department on a daily basis. Never allow employees to open office mail. Be aware of explanation of benefits (EOB) notices. Otherwise, you enable disastrous results.

► Going through the papers of one practice's former employee, we found numerous EOBs that requested a response, where no action was taken, checks attached to several EOBs and paper claims that were never submitted (and are now too “old” to submit).

In my experience, I have found that outsourced coding and billing services do provide a check-and-balance system.

There are some excellent billing and coding employees. Unfortunately, most owners have a bushel of excuses not to be aware of the insurance department. This is a formula for huge setbacks.

The bottom line: Each of us must manage with a system of checks and balances as we maximize the use of the medical model in our practices. OM