CONTACT LENS FEES

Determining Contact Lens Professional Fees

Your contact lens fees should strike a balance between the value of your services and cost concerns.

By David L. Kading, OD, FAAO

Dr. Kading has two practices in Seattle, Washington. Both practices emphasize the fitting of irregular corneas and corneal reshaping. Dr. Kading conducts studies for several manufacturers and lectures internationally on issues related to dry eye, allergy and contact lenses.

Over the past several years, I've had the distinct pleasure to work in several eyecare practices before initiating my own practice. I've also attended many local and national optometric meetings and talked with practitioners about their method of determining professional contact lens and material fees. What is apparent is the great diversity within our profession when it comes to billing contact lens services. Nearly every practitioner I talked with and practice I worked in had a different method or philosophy for professional fees, but each was rational in its own setting.

This article will outline various methods practitioners use when determining their contact lens professional fees. In addition, it will discuss the various types of contact lens fitting fee philosophies, variations between medical and vision insurance plans, and cosmetic versus medically necessary contact lens services. In reality, it would take several texts to fully cover all of these topics in detail, but I will attempt in this article to create a basic overview of these complex issues.

Explaining Fees and Insurance Coverage

As a general rule, practitioners try to avoid discussing fees with their patients. Some find this unprofessional, salesman-like or distracting from the care of the patient. If you don't discuss fees with your patients, it's important to have a system in place for providing patients with a basic understanding of what the charges will be.

When it comes to the cost of services, it's best to tell patients up front, figuratively and literally. Some of the best practices and practitioners that I've observed have the front desk staff provide patients with a form that explains exactly what their insurance plans will cover. You can generally obtain this information by phoning the insurance carriers or through the carriers' Web sites. This form also outlines a range of what the contact lens services will cost.

The front desk staff then asks patients whether they have any questions regarding their insurance. When all their questions have been answered, patients sign the form to confirm their understanding and the form stays with the patients' chart for the remainder of their visit. Although this is not a binding document or a contract, it shows patients the good will of the practice and can be referenced later if there are questions.

Some practices communicate fees to patients through their contact lens technician. Throughout the course of pretesting, a technician may note that there is a significant over-refraction, subjective complaint or what appears to be a physiological concern with the patient's contact lenses. These findings often result in the need for a change in contact lens material, brand, parameters or modality. In more efficient practices, the technician can initiate the discussion of fees and the importance of the contact lens fitting and follow-up process during pretesting, then follow up with more detail once the patient is examined by the practitioner.

Understanding Insurance Plans

Undoubtedly an important topic that arises when discussing contact lens professional fees with patients is insurance. As Clarke Newman, OD, FAAO, indicated in his April 2008 Coding Strategies column, each practitioner who signs on to an insurance plan has signed a contract agreeing to an allotted reimbursement. It's our responsibility as practitioners to understand what we are being reimbursed. It's a courtesy to our patients that we help them understand the fees they are responsible for.

Vision Insurance Plans In general, vision insurance plans have driven consumer vision and health education. Patients who understand that their vision plan allows a yearly or bi-yearly comprehensive eye examination will typically seek care within that time frame. Initially, some new patients to our practices come in for a "refill" of their contact lens prescription so they can use their hardware benefits. This drives patients into our offices and provides us the opportunity to emphasize the importance of regular eye health examinations and contact lens follow-up care. Of course, we also evaluate patients' current vision and eye health needs and make the recommendations best suited for them.

Insurance plans can be very confusing to patients and even to your staff. It's not possible to speak to every insurance carrier or about every plan, but generally, contact lens benefits consist of a dollar amount allotted toward the purchase of contact lenses. This may include a combination of professional and material fees. Unless educated, many patients do not understand the need or value of a contact lens evaluation and fitting process. After all, their insurance covers an eye examination, and if they purchase spectacles they generally do not have to pay a spectacle lens and frame fitting fee. At the initial visit for new patients and revisits for established patients, it's essential that your staff can competently explain the fee breakdown including fitting, follow up, evaluation fees and material fees. Although this can be time consuming, especially with the variability in lens modalities, it can save time in the end.

Additionally, it's beneficial to explain insurance coverage to patients before charges are incurred. Many patients have a basic understanding of their vision insurance, but may not understand the nuances of the contact lens coverage. By describing the insurance coverage and the importance of the services provided prior to the evaluation, the patient will understand the value of what you offer.

Medical Insurance Coverage Medical insurance plans will cover the cost of contact lens professional fees and materials only in the case of medical necessity. Depending on the plan, this may or may not be the case. Again, it's important to read each contract thoroughly to determine which plans provide coverage for medically necessary contact lenses. Some contracts do not specify which patients fall under this category, and some specifically indicate that they will not cover medically necessary contact lenses. In these cases, it may be helpful to send a standard form letter to the insurance carrier outlining the importance and medical necessity of contact lenses and requesting prior authorization for a particular patient. An example of this standard form is available with the online version of this article at www.clspectrum.com. Place a copy of this letter in the patient's record and provide a copy to the patient. Patients are loyal to you and appreciate it when they know that you are working on their behalf for insurance reimbursements prior to charging them directly.

Explain the importance of the contact lens evaluation to patients and remind them that if their insurance plan does not cover the professional and material fees, they'll be responsible for the balance.

Professional Fees

Contact Lens Evaluation Fee The contact lens evaluation fee allows you to bill for assessing the current contact lens fit for patients whose ocular physiology, comfort and vision does not necessitate any changes to their current lens parameters. Some still bundle this service in with a comprehensive eye examination, but you can bill it in addition. These patients leave with the same contact lens prescription that they entered with. Because no refitting occurs, this fee tends to be less than that for a contact lens new fit or refit. Additionally, these patients do not require any follow-up visits, which significantly reduces overall chair time.

The justification for patients is that their eyes tend to change over time and thus it's important to evaluate the fit, power and health concerns related to contact lens wear before the patient can receive a medical prescription for another year of lens wear.

Global Fees A global fee is reminiscent of a contact lens service agreement. It's a bundled package that may include the comprehensive examination, lens fitting, contact lens follow-up visits and, occasionally, an annual supply of materials. Some practices include a year's supply of contact lens solutions in this fee as well. This is a favorable way for practitioners to encourage patients to use the contact lens cleaning and disinfection system prescribed and to purchase an annual supply of contact lens materials from the practice. The global fee may disguise the cost of services versus materials with this method.

One of the many drawbacks to global fee determination arises from the diversity of contact lens fitting types (GP, extended wear, toric, presbyopic, etc.). Some practices limit themselves to one global fee that covers all lens fits, while others may have different fees depending on the type of lens a patient needs. You may underestimate your chair time and the value of more time-consuming specialty lens fits with this type of fee structure.

Service-Based Fees A more common method of structuring professional fees is to separate out each lens modality and charge for fittings based on the lens type. For example, you would charge different fees for fitting spherical, extended wear, toric, daily disposable and multifocal lenses. Frequently this fee covers the fitting process and follow-up visits but does not include the cost of the comprehensive eye examination, contact lens supply or solution. This allows for varied charges for more complex fitting modalities. Practitioners generally have an idea as to the complexity of the fitting system and the number of follow-up visits that may be anticipated when setting the value of their professional fee. However, exceptions occur with some patients requiring more visits and some less.

According to the CPT definition of a contact lens fitting fee, it includes the prescription of optical and physical characteristics, with medical supervision of adaptation. The fitting also includes instruction and training as well as incidental revision of the lens during the training period. An additional fitting fee should be billed if you have performed more than one incidental revision of the lens.

With this fee structure you should also bill patients for the appropriate office visit such as a comprehensive eye examination, evaluation and management visit or consultation visit. Other billable services or procedures may include the refraction, topography, anterior segment photography or wave-front aberrometry. Table 1 lists common office visit procedural codes and Table 2 lists procedural codes you can use for a contact lens examination in addition to those for the office visit.

Market-Based Versus Value-Based Fee Setting

What's the appropriate fee for my service? You can answer this question in two ways. The first pertains to the market in which your practice is located. The second is to base fees on the perceived value of the service. The basics of business teach that every practice can have, at most, two of the following: quality products, exceptional service and low costs/charges/fees. It's important to select two and stick with them.

Fee-Based Services Fee-based services that are highly competitive in the marketplace will attract more cost-conscious shopper clients. These clients may select a practice based solely on price and may not be loyal if they find a better deal. When you set your professional fees to compete with significantly less expensive practices or retail operations, it decreases your contact lens profit potential because you must perform additional examinations and contact lens evaluations to create the same revenue.

Value-Based Services Set value-based fees depending on the worth of the service. For example, suppose a patient is frustrated with his bifocal spectacles and would like the option of multifocal contact lens wear for evening outings. This patient noticed on your Web site that your practice offers these services and has presented to the office requesting this specialized product. This is a classic supply and demand scenario. Value-based practices excel in creating a demand for their quality products and exceptional service. Through marketing, patient education and staff interaction (opticians, technicians, front desk staff), the patient will present in the examination room asking for the service. When this type of demand has been created, you won't have to sell to patients — they'll make a decision based on value. Cost-conscious consumerism applies and will undoubtedly create questions related to cost. Value-based practices present the cost knowing that the service is worth the fee.

The Right Professional Fees for Your Office

I strongly believe in a combination of fee-based services and value-based services. We need to remain competitive so that existing patients do not leave our practices. However, practices that charge higher than standard fees continue to stay in business even when they lose a portion of their patients to practices that charge less. The reason: loyalty to the value offered. Patients who place importance on service and quality will spend money where they see value.

A simple starting point for calculating fees relates to the gross of the practice and the overall chair time spent with each patient. First calculate the value of one patient in your practice by dividing the practice gross by the number of comprehensive eye examinations performed per year. This number represents the approximate value of one patient's encounter into the office and is an estimate for the overall value of examinations (comprehensive eye examinations, medical office visits, contact lens services, etc.), ancillary tests (GDX, HRT, OCT, etc.) materials (contact lens materials, solutions, etc.) and spectacles (frames, lenses, etc).

Next calculate the average chair time spent with a patient. This would include face-to-face, practitioner-to-patient encounters including comprehensive examination, contact lens services and medical office visits over the course of a year. The gross per patient divided by the time spent per year with a patient will determine the rate per minute (or hour) and provide an estimate of what you should be charging.

When selecting the value of contact lens services, start by determining how much face-to-face decision-making is necessary to complete a lens fitting visit, follow-up visit, etc. Don't compromise your practice by accepting less for your contact lens services per hour than you do for your examination services. I'm a proponent of charging more for more complicated, value-driven services. A toric or bifocal lens fitting may take the same amount of time as a spherical fitting, but is more complex and requires more decision-making. Justifiably, you should offer these services at a higher professional fee.

Setting professional fees for contact lens services is difficult. The determining factor in deciding on fees relates to patients' cost concerns and perception of value. To initiate the fee determination process, calculate the amount of time required to perform a service and then add a fee for decision-making complexity. When patients understand the value of their contact lens evaluation and fees are charged appropriately, contact lens professional fees and associated services can generate a healthy profit margin. CLS