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The fee for a refraction can seem tricky from a management point of view, but it really is pretty simple once you adopt a few rules for your office. To set the framework, here is a recent question from a reader: I have never charged for a refraction separately because I've felt that this was part of a comprehensive exam. When and why do you charge a separate fee for refraction and does a patient ever question this?
Always charge and itemize
It is best to always charge for a refraction (assuming the test was done, of course) and show it as a separate line item fee on the patient's ledger and receipt. I would do this in all cases: private pay, vision plan coverage or medical insurance coverage. The refraction fee can then be billed to a third party or may be collected from the patient, depending on the coverage, but I believe the fee should always be entered. It is simply good policy.
It avoids confusion. Because some third party programs include the refraction in the definition of an eye exam (vision plans) and some do not (Medicare and some medical plans), if you don't show the charge, it is not clear if the service was performed and not billed – or if it was omitted.
If an insurance audit is performed and the patient record indicates that a refraction was done, but none was charged, it is possible for the carrier to assume that the fee was bundled into the exam fee. If the insurance policy states that refraction is a non-covered service, the carrier could make a case that you overbilled and it may deduct an average fee for refraction from all past exam billings. You could have to pay back past fees plus penalties.
Medicare could view writing off the refraction fee as an inducement to use government services, which is a violation.
It is confusing for staff to know when to charge the refraction and when not to charge it. It seems to lack integrity. It's pretty hard to explain if a patient asks why he was charged but a friend was not.
It has become standard practice in eye care to itemize the refraction. If people ask around or inquire about it to the insurance plan, it is viewed as standard.
The best reason of all: you need to generate income and refraction is a service that is valuable and people will pay for it. If it's a non-covered service and the patient must pay out of pocket for it... all the better! We need more non-covered services! Charge for it and collect it at the time of service. Explain the fee in advance over the phone (if necessary based on the type of insurance coverage) and no one will object.
Many doctors simply drop the refraction fee when they know it is not covered by insurance because they think it's a smart marketing move and they think the patient will object to the fee. In reality, these doctors are simply missing out on thousands of dollars per month in revenue. Patients do not object to refraction fees in my practice; they just pay them.
If the refraction fee is covered by the insurance plan, or if it is included in the definition of a comprehensive eye exam, there is no benefit at all to not charging for it. Even if it exceeds the maximum exam fee by a vision plan, you may as well enter the charge and just write it off later. At least the patient sees the value of the test.
How to quote the fee
When verbally quoting the exam fee to patients I train my staff to add the eye health exam fee and refraction fee together and state the one overall fee. We do this for simplicity. We always write up the two fees separately on the patient's visit slip and enter them separately into our computer system, but since the total comes out as quoted, we have zero complaints. Since refractions are required in our office as part of a complete eye exam (the patient can't opt out of it), we simply quote it as one fee. This is just my opinion, but I find it too cumbersome to explain two fees.
Perform a refraction with most exams
I view the refraction as a critical part of a complete eye exam and, as such, I do the test most of the time. If the patient has not had an exam in the past year, or if he is new to my office, I do a refraction even if there is no visual complaint. We have all seen significant refractive changes when there is no complaint. I gain useful information by knowing the true best corrected visual acuity, even if glasses are not prescribed. I don't think we are doing the patient a favor by not doing the test in order to save him the fee.
There are certainly some valid reasons to not perform a refraction and we all use our judgment about that. Many interim visits at three or six months do not need a refraction (but some do such as follow-up on a child). In some cases of infection or injury, the eye may not be in physical shape to allow a useful refraction.
When to not charge for refraction
The only time I do a refraction without charge is when I see a patient to troubleshoot a complaint about glasses or contacts.
Best wishes for continued success,
Neil B. Gailmard, OD, MBA, FAAO
Editor, Optometric Management Tip of the Week
Dr. Gailmard's new book, Practice Management in Optometry: A Blueprint for Success Based on the Optometric Management Tip of the Week, is now available on Amazon.