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If everything about fees and payments always runs smoothly in your office, you may not need to pay much attention to this tip article. But if your staff hears complaints from patients about exam fees, insurance billing and out of pocket costs, you really should take it seriously and fix the problem. Unhappy patients simply find another eye care practitioner; they usually leave quietly and you never really know it happened. If patients actually reach the point of anger, they often tell friends and relatives about their shady experience. Building a thriving, high-grossing practice depends on strong patient loyalty and good will, so let's look at the frequent causes of dissatisfaction about fees.
Two price lists
This has become extremely prevalent in eye care and I believe it's a big mistake. As a review, there are three main ways providers structure fees to achieve different fee levels: S-codes, time of service discounts and downcoding. Either way, the strategy is to charge a lower fee when the exam is routine (meaning no medical diagnosis) and when the patient has to pay for it out-of-pocket. If the doctor can come up with a medical diagnosis and the patient has medical insurance, then a higher fee applies. This concept has swept the profession by storm and in many circles is believed to be the smartest practice management approach possible. I disagree with it because there are many flaws, such as:
The premise that private pay patients must have a lower fee or they will go elsewhere is not correct. It's based on fear and the practitioner has most likely never actually tested the ability of patients to accept a higher fee, which they usually will. Of course, a higher fee should be accompanied by excellent service, but that should not be that difficult to provide.
When two fees exist, it becomes impossible to quote the exam fee in advance. If the fee is based on the diagnosis and that's not known until after the exam, it's impossible to state the fee in advance. Doctors and staff members think the explanation they have dreamed up for that is perfectly plausible, but it really sounds like bait and switch to the average consumer.
Not quoting fees in advance is a bad business practice and it creates many problems. People have a right to know what they will have to pay before they incur the service! Providers expect patients to just trust them to take care of the insurance billing, but they forget that patients have a financial stake in the matter. There are co-payments, deductibles, non-covered services (like refraction) and others. People have a right to play a role in their medical testing and billing and trying to take over the billing options creates bad will. Even patients who seem to just go along with the office policies may harbor resentment that they don't share with you.
Confusion abounds. When a patient hears the low routine exam fee mentioned over the phone and then sees a much larger fee being billed to his insurance, he may become suspicious of fraud, no matter how much explaining the staff does.
When the practitioner works too hard to find a medical diagnosis, such as pressing for symptoms or finding a physical sign that is really rather insignificant, and then a higher fee results, some patients perceive that a game is being played to create higher billings. These patients often do not return to the practice.
I believe practices having two fee levels causes more loss of patients (because of dissatisfaction) than would be lost if the practice just had one higher fee for all! And the practice would certainly earn more income with the higher fee. One fee is the way to go, but don't lower your medical exam fee... raise the routine exam fee!
Which insurance to bill?
Dissatisfaction also occurs when the patient has both a vision plan and medical insurance. Since eye exams can often be billed to either type of insurance, it's natural for the provider to prefer to bill the one that pays better. Many providers become so focused on the higher fee that they take the patient out of the process and attempt to bill the medical plan. While this may result in some higher fees being generated, there can be a loss of patients that's worth even more.
Providers try to present a scenario that vision plans will not pay for exams that have a medical diagnosis and that the bill must go to medical insurance, but that's really not true. Vision plans will pay for exams even if the diagnosis is cataract. Granted, they don't pay as well, but they will cover the service and the patient doesn't care about the contractual arrangements.
If patients want the provider to bill their vision plan and if the provider accepts the plan, I think it's in the provider's best interest to do so. Of course, if a medical problem exists and if a follow-up visit or additional testing is needed, then those should be ordered and those fees billed to medical insurance. But if a choice exists of two types of insurance, I would ask the patient which one he would rather bill.
Having one fee level, as discussed above, helps get around the problem to a large extent, because the fee will not change depending on the diagnosis. The same exam fee is entered for the patient without regard to which insurance plan is used or if it is private pay. It's all the same. The business office staff can work out the insurance billing with the patient with an eye on customer satisfaction.
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.