Insights From Our Editors

5 Tips to Profit in a Managed-Care Environment

By Mark Wright, OD, FCOVD,
and Carole Burns, OD, FCOVD

August 21, 2019

The dominance of managed care in healthcare has greatly impacted practices’ ability to maintain profitability.

Don’t just complain about managed care, do something about it. Managed care gives access to patients. Access to patients is valuable. It puts patients in your chair. Studies have shown that patients return to your office more frequently when they have managed care than when they do not have coverage. Follow these tips to maximize your interaction with managed-care patients.

TIP 1: Build Your Frame Board for Managed Care
The frames on most frame boards are not chosen very well. To design a frame board well for managed care you need to make sure there are no “zero dollar” frames on your frame board. A zero-dollar frame is one that the managed-care company only covers the cost of the frame for, and does not permit additional money beyond the frame cost.

What causes a zero-dollar frame to exist is a combination of your formula for pricing the frames on your frame board and the pricing scheme of the managed-care company. You can ask the managed-care company, your frame companies, your practice alliance and your opticians to help you fix this problem.

Put frames on your frame board that permit you to maximize your reimbursement from managed-care companies. This is a priority-one problem that must be addressed.

TIP 2: Use a Minimum Frame Pricing Strategy for Frames on Your Frame Board
A minimum frame pricing strategy sets the lowest price for frames on your frame board. Let’s say that price is $175. This does not prohibit you from offering in-office discounts and packages. The key is to know that a patient who comes in with a managed-care plan can choose to either use your in-house discount or their managed-care plan. They cannot use both together.

A patient who walks in with a managed-care plan and wants to use it to purchase your in-house discounted $99 bundle of a frame and lenses will need to be told they can either purchase the $99 frame and lenses package out-of-pocket or they can use their managed-care plan. The moment they want to use the managed-care plan, the frame in that bundle becomes whatever your minimum frame price is for billing purposes. In our example above it would be $175.

TIP 3: Sell Multiple Pairs Plus Additional Services and Products
Train your staff how to handle patients who say, “I just want what the plan covers.” The answer should never be, “OK.” A better answer is, “Let’s first find out what improves your quality of life at home, school, work and play, then we can find out what your benefits contribute.”

Don’t forget to use all the tools at your disposal to help patients. Would polarized sunglasses for driving also help this patient? How about corneal refractive therapy? Don’t forget myopia management? What about nutraceuticals? This list goes on and on.

TIP 4: Code Appropriately
Do not under-code or over-code. Simply, code appropriately. This means you need to keep up with the coding changes that occur every year. This also means you need to self-audit at least five records per carrier every year to make sure your documentation supports your coding. And while you are doing this review, look for lost opportunities.

Did you prescribe everything the patient could have gotten and if not, why not? What changes do you need to make going forward to maximize the care given to all patients on every visit?

TIP 5: Bill correctly
Billing correctly has at least four components.
Bill Today
Most third parties have a deadline on billing. If you submit a bill beyond their deadline, they will either reduce the payment or deny it altogether. Waiting until sometime after today to bill third parties just asks for mistakes to be made. The best way to handle this problem is to make sure that at the end of every day, every managed-care company has been billed for every managed care patient that was in the office today.

Collect All Co-Pays and Deductibles Today
As part of your managed-care patient pre-certification process, your staff should know before the patient comes into the office what deductibles and co-pays are due today. If the patient does not know how much of their deductible has been met (or you cannot get this information from the third party) then assume none of the deductible has been met. It is a waste of your staff’s time and an ineffective way to manage your practice to chase patients for money after the patient leaves the office.

Check Your Reimbursement for Accuracy
Whenever we lecture on this subject, we always like to ask the audience if anyone has ever found a problem with the amount of money reimbursed by third parties? Most of the time a large portion of the audience will say, “Yes.” Then, we ask:

o Was the problem in the insurance company’s favor (i.e.: they paid you less than they should have)? About 95 percent of the people will say yes.

o Was the problem in your favor (i.e.: they paid you more than they should have)? Five percent, or fewer, of the people will say yes.

This tells us clearly that people need to check their explanation of benefits forms for payment accuracy.

Check Your Reimbursement for Payment Level
It is important to remember that third parties are not paying you what the service or product is actually worth, they are paying you a discounted fee. The agreement you made with the third party is that for the potential of seeing more patients, you will give the third party/patient a discount on services and materials.

That means if you bill a third party a fee and the third party pays the entire fee, you are billing less than the maximum amount the third party permits. To say that another way, you are giving a discount on top of a discount. This situation is a clear indicator that your fee for that service or product is too low and you need to raise your fees.

Follow these tips to make sure you are keeping your practice financially strong in a managed-care environment.

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