Article Date: 3/1/2003

fix this practice
Referral Rescue
Losing your patients and your money to referrals? Learn how to get them back.
Richard S. Kattouf, O.D.

Q I have a practice that generates more than the normal ophthalmic referrals. Can I get an M.D. to rent from me and examine my referrals in office? How can I generate more income from referrals?

Dr. S. T. Lorrell

A: M.D.s need your referrals more now than ever before. Surgery centers are being developed with networks of O.D.s for referrals. This leaves M.D.s in a position to court O.D.s. But before entering into an agreement, set the following rules.

Establishing the rule

If you're in a state that has a therapeutic prescribing act (TPA) law that has approved all medications necessary for performing one-day post-op evaluations, then I feel it is your professional obligation to see the patient the day after surgery unless the surgeon feels that individual complications would contraindicate this practice. Here are ways to raise net in this scenario:

You must take and maintain control of the above stipulations.

Keep in mind that the M.D. gets fees for the consult visit plus the surgery and, if he has his own surgery center, facility fees. Here's a general range of rental fees: $400 for four hours at a small- to medium-size practice that has a gross income of $500,000. For a larger practice, $800 for a four-hour rental is appropriate.

Making the point clear

Dr. Lance (not his real name), who had a large Medicare and general medical patient population, called my company. His net income was at 26% of his gross collections and it was immediately evident to me that he wasn't coding medical procedures properly and the referring M.D. was sending the cataract post-ops for refraction only.

Plus, a tech from the M.D.'s office was performing A-scans on Dr. Lance's patients. This is a pre-op diagnostic procedure that every O.D. can do and get reimbursed for as long as the medical plan isn't a closed panel. Dr. Lance wasn't getting a post-op income from the medical carrier because he was not maximizing his diagnostic licensure.

Leveling the playing field

I negotiated with the M.D. and developed the following agreement:

This consultation raised Dr. Lance's income $150,000 in medical reimbursements alone, which has a high net-to-gross ratio. Dr. Lance's practice image skyrocketed just by his learning to use his licensure to its maximum and to take control of his own patients. In two years, Dr. Lance's net income grew to 38% -- an increase of 12%.

Dr. Kattouf is president and founder of two management and consulting companies.  For information, call (800) 745-EYES or e-mail him at The information in this column is based on actual consulting files.


Optometric Management, Issue: March 2003