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 By Neil B. Gailmard, OD, MBA, FAAO, Editor March 21, 2007 - Tip #270 
 Contact Dr. Gailmard | Subscribe | Archives | Print this issue Visit: optometricmanagement.com 
Response to the Ten Misconceptions Expanding on Medical Billing

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Additional Information

I received an outstanding response from readers on my article two weeks ago on the top ten misconceptions in practice management. One reader said I really opened a can of worms and another said she hoped I was ready for the storm I probably created. Many of you simply said you wanted me to expand on all ten items while others listed a few by number that piqued your interest. At any rate, your interest is truly gratifying to me professionally and I will definitely be expanding on all ten concepts in future tips. Many readers noted (correctly) that I was probably happy to have ten weeks of future topic ideas.

I listed the ten items in an order loosely based on my view of the impact each one has on revenue production. Of the items that were identified by readers, however, here is how the interest ranked from most to least:

  • Medical billing and preappointing (tied)
  • Staff bonus system and employee evaluations (tied)
  • Associate OD
  • Frame inventory
  • Scribes
  • Saturday hours
  • One hour glasses
  • Fee increases

Medical billing

So, let's tackle them in the order you want. This week, we'll cover medical billing. The statement in my article was: #2. Medical billing and coding are the keys to financial success in optometry today and it's smart to have a higher fee for medically-based examinations.

This misconception, like a few of the others on the list, is not based so much on the premise that I don't believe in the concept, but more that the concept is often taken too far in a practice at the loss of something else that is more important.

Here are my thoughts on the trend of billing medical insurance and having a higher fee for medically based examinations.

  • Patient satisfaction is still the most important factor in practice success. I think it's easy to lose sight of that when the doctor thinks he is dealing with a corporate third party like an insurance company. The patient still has a strong interest even if it appears that a third party is paying. The whole area of fees and payments has a huge potential to upset patients.
  • Many practices work too hard to find a medical diagnosis or to justify a higher fee. Patients are very smart people and they know a business strategy when they see one. Strategies that may call integrity into question can cause more harm than good.
  • Most optometric practices (not all) provide a high percentage of routine exams and refractive care. To base fee decisions on a small percentage of cases does not make sense. I know many practitioners who proudly say their exam fee is $250, but they only charge that in less than 10% of the cases. Eventually the patient gets to the "real" fee, but it shouldn't feel so convoluted.
  • There is no harm in billing medical plans for legitimately covered services, but if the patient is put out because he has a high deductible and just wanted an eye exam, or he wanted to use his vision plan but the doctor insisted that it was a medical problem, or any other annoyance that may arise when a patient does not get what he expects, harm could result. The invisible harm that doctors aren't even aware of is the number of people who decide to go somewhere else for eye care next time. That is a significant loss that occurs in some practices much more than others and it is very hard to track.
  • Assuming that private pay routine patients will not pay $150 for an eye exam, therefore the fee must be altered for that group in some way, is an expensive mistake. People will pay that fee or more for eye exams and I think the nature of the service is worth fees in that level. Why don't most optometrists think they are worth it?
  • Many practices would be better off improving their level of care and service and increasing their routine fees to the level paid by Medicare or other major medical insurers. Having a higher fee for medically-based eye exams is the same thing as having lower fees for non-medical exams. I don't like offering low fee eye exams.
  • Patients really like to know what the fee will be for a service they are buying (an eye exam) and they want to know what their insurance will pay. It may influence their decision on where they go for eye care. If an office can't tell a caller exactly what the fee will be for an eye exam and if an insurance plan (vision or medical) is accepted, then I think there is a good chance of upsetting some patients. I have trouble with the concept that the fee varies based on the diagnosis. I do all the same tests in a comprehensive eye exam and I have medical decision making even if the eye is healthy. Of course, additional procedures and follow-up visits will vary based on the diagnosis, but those are extra services that only need to be explained to people who need them. I have some patients with binocular disorders that require prism in their glasses who take an inordinate amount of my time in an examination, but it is not medical. And I have senior patients, who have 1+ nuclear sclerosis, but they take very little time or medical decision making and they could be called medical. Some exams will always be easier than others, but for practical reasons, a system with one fee for a specific service works very well.

Medical billing and coding are not the keys to financial success in optometry. High fees in general for excellent service and a high percentage of revenue from optical dispensing are the keys.

Best wishes for continued success,

Read Past Tips Neil B. Gailmard, OD, MBA, FAAO
Editor, Optometric Management Tip of the Week

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Send questions and comments to neil@gailmard.com.

Dr. Gailmard offers consulting services to eye care professionals through Prima Eye Group; information is available at www.primaeyegroup.com.

Please Note: The views expressed in Management Tip of the Week do not necessarily reflect those of the sponsor.

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