Article Date: 12/1/2005

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The Problem of Basing Fees on the Medicare Schedule
Matching fees with the "original discount healthcare plan" is no way to run an optometric practice.
BY WALTER D. WEST, O.D., F.A.A.O., Chief Optometric Editor

As we approach the end of 2005, many optometrists across the country can't wait to get the new Medicare fee schedule so that they can raise their fees (egad!). If this sound's familiar to you, please read on.

The long road

Optometry has invested countless hours visiting with legislators and attending certification courses to qualify for the ability to provide medical care in every state. In addition, we've invested thousands of dollars in the pursuit of the expansion of optometry's scope of practice in all 50 states. Since April 1, 1987 optometry has enjoyed parity with medical doctors within the Medicare system. This ability to participate in Medicare has perhaps been one of the most important opportunities in optometry's entire history.

Yet, many optometrists don't appreciate the advantages that participating in Medicare provides. Nor do they recognize that Medicare fees are based on what the "original discount healthcare plan" is willing to pay. For example, for the year of 2004, while optometrists were focused on getting their fees up to the level designated by a conversion factor of 37.8975, the mean conversion factor utilized by medical practitioners was approaching 68.0000.

What does this mean? It means that optometrists who set their fees based on the Medicare fee schedule are placing a value on their services that is 56% of what the vast majority of physicians believe their time and expertise are worth.

It seems to me that for all the aggravation, time and effort we put forth so that we could provide medical eye care and gain parity under Medicare, we're selling ourselves short. Surely we didn't invest sizable amounts of money and years of hard work just to demonstrate that we value our services at almost half the amount as those of a medical practitioner.

A larger issue

So far I've limited my comments to Medicare but there is a farther-reaching effect, which is potentially a larger issue relative to optometric earnings. Setting fees only at the Medicare reimbursement level means the optometrists who do so are leaving significant amounts of money on the table every time they file a claim with many health insurance carriers that cover patients who are not on Medicare.

Here's your wake-up call

This is not an attempt to encourage you to charge any specific fees. But rather, it is a wake-up call to all those optometrists who see Medicare fees as premium reimbursement instead of the discount reimbursement that they are.

By the way, those of you who set your fees based on the Medicare fee schedule, get ready to reduce your fees by about 4% beginning in 2006. That is, unless you and the other Part-B providers can get together and convince your legislators in Congress to reconsider the 2006 budget for Medicare.

Happy New Year! OM

Optometric Management, Issue: December 2005