Article Date: 6/1/2004

Let's Talk Money
Getting paid shouldn't be a struggle -- but it does require some open dialogue with yourself, your staff and your patients.
By John M. B. Rumpakis, O.D., M.B.A.

The financial health of your practice affects almost every aspect of your life. How you determine patient fees, achieve patient acceptance and deal with third-party payers influences your profitability, which in turn, impacts your life.

The good news is, you can control your profitability. You can ensure that your finances are healthy by honestly assessing your value to patients, creating a clear financial policy and communicating the policy to staff and patients.

Understand your value

You understand the value of your role in patients' ocular health. Yet in my experience, many optometrists undervalue their work in financial terms. Many are either unaware of how much money their services are worth or more commonly, are unwilling to request the maximum reimbursement from their insurance carriers. (See "What Are You Worth?")

Currently, optometrists charge about $75, on average, for evaluation and management code 99203. This is $17 less than the national average maximum Medicare reimbursement (nearly $92). What's more, the average third-party medical carrier allows a maximum reimbursement of about $125, which translates into an additional 67% of net income per visit. By not setting their fees as high as the maximum reimbursement, practitioners are depriving themselves of well-deserved revenue.

Of course, it's tough to keep up with constantly changing insurance reimbursement guidelines. One way to stay current and maximize your insurance revenues is to invest in a software program, such as Reimbursement Plus ( or Accufee (, which compares your fees with the maximum allowable reimbursement rates offered by your carriers.

Although these programs are helpful tools, you'll only realize your full financial potential if you firmly believe in the value of your services and successfully convey this conviction to patients.

Establish ground rules

Small businesses need working capital. If you have a high accounts receivable balance, a growing list of delinquent patients and excessive dependency on third-party carriers, you should know these are telling symptoms of a deeply rooted financial problem. To cure those issues for the long term, you should establish and enforce a solid financial policy.

To begin, consistent cash flow requires a credit policy that clearly defines when and how you expect to be paid for services. Over the years, I've seen many practices whose financial difficulties could be traced to misinterpreted policies and poor staff-patient communication. By instituting a simple credit policy that's easy to explain and execute, you'll avoid these financial pitfalls and keep your financial health.

Set clear payment expectations

A good financial policy clearly communicates your expectations to patients. In other businesses, such as the grocery store, you expect to pay for your purchases before you leave. The rules are clear, which eliminates stress and uncertainty and makes each shopping trip routine.

You can take a cue from the local grocery store by setting up a financial policy that patients clearly understand. Your patients should have a good idea of what they'll be paying for in terms of services and materials.

The best way to let patients know how much they owe you for an office visit is to have them read and sign a copy of your credit policy as part of the registration process. By giving patients clear instructions when they arrive, the staff will ensure that they won't have any surprises when it's time to pay.

Train your support staff

Your staff handles much of your practice's financial interaction with patients. To get the payment you deserve, you and your staff must be confident and comfortable with asking patients and your carriers for appropriate payment. Your desk staff will need to be comfortable answering any questions and asking patients to sign credit agreements.

You and your staff also should be well versed in each of your carrier's co-pay policies. Carriers will stipulate what the patient owes at the time of service, and then you and your staff need to follow the billing guidelines to get timely reimbursement.

Inadequate training can be expensive. Many practitioners lose revenue when their staff gives patients the wrong payment information.

For example, it's customary for patients to pay for 100% of all services and 50% of materials (eyeglasses and contact lenses) at the end of their appointment. In a common error, many staff members mistakenly collect 50% of the total charges. For a patient who should pay $190 (100% of the $90 exam fee plus 50% of a $200 material fee), this would mean you'd receive only $145. The impact of one transaction -- the difference of $45 -- may seem trivial, but it can make a significant difference in your bottom line for an entire month of patients, especially when you're dealing with third-party co-pays and contact lens-related services.

To reinforce the importance of efficient collections, keep in mind that in a market of shrinking margins and once-yearly contact lens evaluations, the $10 co-pay your staff collects can represent nearly 20% of your total reimbursement for routine vision services. Now, more than ever, establishing reliable cash flow depends on you and your staff following your financial policy to the letter.

Get comfortable

Remember, most patients are like us. They're more than willing to meet our payment expectations as long as we present them clearly and confidently. So feel comfortable discussing fees with your patients. And in the future, both your patients and practice will benefit from good health.

Dr. Rumpakis is the founder, chairman and CEO of Practice Resource Management in Lake Oswego, Ore. He is the author of Reimbursement Plus, a Web-based software application.


What Are You Worth?

This is a question that makes many optometrists uncomfortable. We're often reluctant to discuss fees with patients, yet we become distressed about our income or our practices' dependence on materials sales. In our profession, it's essential to look honestly and practically at the financial value of our services.

How do you start? Fees encompass such obvious services as examination and dispensing, but they should also reflect these 'hidden' factors that enhance the quality of care you deliver:

  • Primary optometric education
  • Continuing education
  • License renewal
  • Equipment costs
  • Staff training

Although this kind of analysis can be awkward at first, it's important to become confident with it and revisit your fees regularly. Don't be shy -- your service is worth every penny.


Optometric Management, Issue: June 2004