Managed Care

6 Steps to Profitably Drop Managed Care Plans

By Barbra Dey, BSc Optom, COE

June 29, 2022

Practices are already facing significant challenges from optical chains and online retailers. Low reimbursements from managed care, along with requirements to sell specific products and use specified labs, can be the final straw for some practices.

For that reason, many independent practices are successfully pivoting away from a dependence on managed care. Here’s how to do it so your patients and profitability are not adversely affected.

Ask Yourself These Initial Questions
What is your mission or value statement? Does seeing a high volume of patients with low reimbursement enable you to deliver on your mission and value statement? Or would seeing a smaller number of patients with higher reimbursement make it more likely you will be able to do what you said you wanted to do?

Who is your target market, and does the community you are serving support dropping vision plans?

Can you provide the services a patient would expect to receive from their optometrist when you are part of a specific vision plan?

When you truthfully answer these questions, you will know whether you should keep none, some or all of the current plans you accept in your office.

Analyze Reimbursements from Managed Vision Insurance Plans
Start by examining the vision insurance plan with the lowest volume of patients in your office. Look at the number of patients you saw in that plan over the past year and then examine the income you received from the insurance company for those patients for services and then products. Also look at the total payments made on the patient side for overages, co-pays and other expenses.

Depending on the plan, you may need to calculate your cost on the products you supplied and remove that amount from your income. Some of this can be complicated due to challenges understanding how the vision plan calculators work on the practice’s side (you’re not alone, they are tricky). A good way to do it is to pull 20 percent of a week’s worth of the vision plan’s claims up to a maximum of 50 claims, and analyze them. Be sure to include percentages of single-vision, progressive and occupational lenses that reflect your practice’s typically sales.

From your analysis, you will come up with the average gross revenue per vision insurance plan patient. Now, repeat for your private insurance or private pay patients. Note the difference in average gross revenue per patient. Once you know your gross revenue per patient you can multiply this by the number of patients you saw that year for the vision plan.

The final step is removing your cost of doing business. You can get this from your income statement. If this vision insurance plan is, for example, 20 percent of your total patient volume, then attribute 20 percent of your costs to your calculations. Now that you know your average net revenue, you can make an informed decision of the best way to move forward.

Ensure You Are Not Losing Money on Patient Visits
Each practice owner must decide what the lowest acceptable dollar profit per patient is, along with the number of patients per hour they can see without burnout and continuing to adhere to their own mission and values. If you have a wide-open schedule every day, then perhaps seeing patients on a vision plan is better than an empty slot, but perhaps it’s not. It is never a good idea to lose money on a patient visit.

At Rocky Mountain Eye Center, which I serve as a consultant, calculations showed the practice was losing money on one of the plans they were contracted with. This loss was multifaceted in that their frame markup was lower than the industry standard and their reimbursement from the insurance company was less than they were paying for their frames. In addition, the reimbursement from the insurance company was consistently $10 less per claim than the online payment calculator indicated.

We immediately course corrected and increased the markup on the frames, but it was not enough. With a lack of response from the insurance company, and a thorough analysis of their data, it was time to cut their losses and start the process of becoming an out-of-network provider.

Launch Specialized Care With Out-of-Pocket Services
Consider developing a new line of business to grow the private pay portion of your practice. Myopia management is a growing treatment option in the eyecare market, others have looked at developing their dry eye practice by introducing Intense Pulsed Light (IPL) treatment, while an optometrist passionate about sports could consider launching a specialized sports vision clinic.

Communicate the Value of Your Services
If your practice’s truth is that you provide exceptional care to each patient regardless of their insurance plan, then every decision you make should go back to this. If remaining on a certain vision plan means you have to increase the number of patients per hour to make a profit, and this no longer aligns with your values, then the decision is made for you.

When you are passionate and believe in your “why,” it comes down to communication. A consistent story and message will bring the patients who value your services and products around to your way of thinking. With staff training, and reinforcement of your message, the patients who value your expertise can become your greatest referrers of other potential patients who have similar values and desire quality care and products over “what their insurance covers.”

Here is a sample script of what you could tell patients about your decision to become an out-of-network provider:

We can now take all vision discount plans; however, we now bill as an out-of-network provider. By supporting an independent relationship with vision discount plans, (Practice name) has the freedom to offer the highest quality and most technologically advanced eye health services, unique curated frames and the highest quality digitally surfaced lens designs available. We believe that quality matters and that everyone deserves to see their best through lenses that are customized to their individual needs. In addition, by providing out-of-network vision services, it allows us to offer direct-to-consumer discounts on eyewear that rival (and sometimes exceed) in-network savings.

Train Staff to Manage Patients With Questions & Concerns
For a patient who is angry and loud at the front desk, I recommend training staff to hand off the patient to a supervisor or more experienced staff member to calm them down. The most successful strategy is to acknowledge and be empathetic toward the patient’s predicament. You don’t have to agree with with what the patient is saying. You can still honestly tell the patient that you understand that your office’s new out-of-network provider status is difficult for them.

I typically train employees to guide the patient to a quieter area in the clinic like an office or open exam lane to listen first, empathize and then, once the patient has deescalated, ask them for permission to provide a solution. Sometimes the solution may be to refer them to a different provider, but more often it will be to explain the details of what being an out-of-network provider means specific to this patient by including your private pay discounts and the opportunity, if it exists, to bill the patient’s exam medically.

You also can offer to help the patient with the process of submitting claims for reimbursement. Anagram is a technology that can help you do this.

Bottom Line: The Right Strategy+ Effective Communication = Success
When you have crunched the numbers to find that it no longer makes sense for you to remain an in-network provider, you have effectively communicated the value of your services, and you are ready to address patient concerns, you have the greatest chance of success in dropping vision plans. You are able to continue providing a high level of care while building, rather than subtracting from, your profitability.

Barbra Dey, BSc Optom, COE, is the president of  Dey Ophthalmic Consulting. Barbra served as CEO of a major practice from 2010 until August 2021 when she decided to embark on a new journey to take her experience and knowledge to grow private eyecare practices across the U.S., and show them how to thrive in today’s competitive market. To contact her, e-mail:

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