To help you judge which managed care plans are for you, Luxottica released the results of this detailed Cleinman Performance Report on managed care to the readers of Eyewear Business. Based on surveys and interviews with eyecare providers, it reflects the current trends in both plan participation and selection.

Though eyecare professionals have gotten smarter about judging one plan against another, the offerings can still be confusing. Every month brings another announcement: "XYZ Vision Administrators has created a new vision plan and will begin marketing its innovative benefits programs and provider-friendly administrative systems."

Most likely, All providers receive a steady flow of solicitations to participate in vision plans like these. And also quite likely, many of these solicitations turn out to be a waste of time and effort, and sometimes money.

It's difficult to sort through the promotion and get to the bottom-line issues: How will the "XYZ" vision plan help grown my business, increase my bottom line numbers, and minimize my staff's time dealing with non-revenue generating administration? Sadly, most vision plans don't and won't.

Despite the common assertion that a program will benefit your practice and allow you to profit significantly, in many cases it's no more than a sales pitch. Often, those who benefit most are the plan administrators and owners who sell these plans to insurance companies, employers, affinity groups, and HMOs.

Problems And Concerns

The physician, optometrist, or optician seeking entry into a vision plan commonly faces several difficult issues. Typically vision plans include some or many restrictions.

For example, a vision plan might only be open to:

• Optometrists, or only to optometrists with TPA certification
• Ophthalmologists or their employed optometrists, and a few optical shops by invitation or proxy
• Those providing both exam and dispensing services
• Optometrists or physicians who own an on-site optical shop (medical groups, retail chains, non-dispensing practices, contact lens only practices, and all independent opticians are excluded)

Or, the plan may require you to:

• Install and sell from a special display
• Use a lab owned by the sponsor, or select from a list of labs chosen by the sponsor
• Use the sponsor lab's choice of lens brands or types
• Bill on non-standard claim forms
• Jump through complicated eligibility verification hoops
• Provide frame and lens upgrades at price levels which virtually eliminate any profit opportunity

What Do Providers Want?

While providers have complained about these restrictions, there has been little reliable data to indicate just how problematic they are. For the purposes of this report, surveys and personal interviews of more than 1,100 eyecare providers across the United States were conducted. Though the responses are believes representative of the overall attitudes of those providers with high volumes of managed care business, the responses cannot be considered representative of a national average of providers.

Approximately 65 percent of respondents accepted five or more plans, with the majority accepting five to nine plans. Less than 3 percent of respondents did not accept any plans.

Some 64 percent of respondents have on-site edging labs. While 29 percent did some form of manufacturing (surfacing or casting), 25 percent of respondents did not have an on-site lab.

Respondents were asked to rate eight specific features of a vision plan in terms of its importance to their practice. The four most important features were timely reimbursement to the practice, the ability to up-sell the patient (to offer premium frame or lens products/options), the ability to use an optical lab of the provider's choice, and the plan's active promotion of the provider's practice to patients.

When asked to rate the same eight specific features against one another, the respondents rated the features as follows (from most important to least important):

1. Timely reimbursement

2. Ability to up-sell

3. Ability to use optical lab of provider's choice

4. Promotion of the provider's practice

5. Ability to verify eligibility online

6. Ability to calculate benefits and co-payments online

7. In-service training for the provider's staff

8. Plan transmits payments directly to provider's bank

Just over half of respondents receive 20 percent to 50 percent of practice income from vision plans, and 20 percent of respondents receive more than half of their practice income from vision plans.

The importance of vision plans will only increase, according to respondents. An overwhelming 70 percent felt their participation in managed care is growing.

When asked what makes or breaks the provider's decision to participate in a plan, the most common answer was the amount of reimbursement. It's easy to understand why this is so important. The average respondent's usual and customary exam fee is generally much higher than that accepted from managed care plans. That response makes the second most common answer logical: the ability to up-sell. Many respondents won't accept a plan that limits them to deliver on the needs and wants of their patients.

Respondents indicated that, aside from reimbursements, administrative burden placed on them by plans is a very big problem. They observed that each plan requires different forms, procedures, benefit calculations, and so on. A growing amount of staff time is needed to verify eligibility, learn how to calculate benefits, and to accurately file claims and pursue reimbursements.

Many respondents also complained about the impact of many plans on quality care. They indicated that managed care interferes with providing quality care, and that plans often prohibit or limit them from recommending what's best for the patient. Another common complaint was about the lack of patient education by the plans; the patients often come to the provider with virtually no understanding of what is covered by the plan. In these cases, the provider must often be the bearer of bad news about limited plan coverage and invest considerable staff time in patient education about their plan benefits.

Survey Conclusions

Few providers are accepting plans because they are promised a steady stream of new patients, or because they fear losing patients. A majority understand about break-evens, chair costs, and the wisdom of accepting plans that force them to lose money.

Many respondents will not accept plans that limit their ability to up-sell, and will greatly resist restrictions regarding plan labs and plan frames. The respondents also are looking to the managed care industry to standardize filing procedures and reimbursement formulas, and to provide staff training and patient education.

Plans developed and marketed by administrators often have significant geographic variation, making direct economic comparison difficult and averages misleading. Indeed, every provider should review individual plans against their own costs structure to ascertain profitability potential. (See sidebar to determine how your current plans stack up.)

The Bottom Line

These are turbulent economic times for vision care providers. All providers should stay aware of the changing healthcare delivery dynamics in their local marketplace and across the nation. When managed care makes a move it generally moves very fast. As providers carefully evaluate plans that come across their desk, it becomes clear that the differences among plans are astounding. It really is a world of "the good, the bad, and the ugly."

Signing up with plans to increase patient volume and fill excess capacity is one thing. But if signing onto a plan pushes better paying patients out of appointment slots, that makes no business sense, especially if it also increases administrative costs and strips away margins. Furthermore, plans which motivate the delivery, directly or indirectly, of a different level of service to one patient vs. another are to be avoided at all cost.

Providers must carefully measure and monitor the results of any plans joined. They should develop a team strategy to integrate the clinical and business side of healthcare. The proof is in the plan's contribution to bottom-line performance, the administrative and stress impact of the delivery team, and the provider's overall professional satisfaction. EB

Gil Weber, MBA, is the managed care advisor to Cleinman Performance Partners, Inc., and Alan H. Cleinman is president of the Oneonta, N.Y.-based company. Luxottica and its EyeMed Vision plan retained Cleinman Performance Partners to produce this report and offer it to readers as a service in helping them analyze and select managed care plans.