It can be very difficult to determine which managed care plans to accept. Matter of fact, if you ask practitioners which plans they perceive as being the best, you will get a different answer every time you ask the question. Even though the selection criteria for an insurance plan vary a great deal from one practice to another, there are certain criteria that should always be taken in to account when choosing whether or not to accept an insurance plan.
Lose the Battle to Win the War
Often times an insurance plan is considered not to be a viable option if the reimbursement is poor. In most cases, I agree; however, there are times where it may make sense to accept some of the lesser paying plans. If you are a new practice or are trying to grow your current patient base, these types of insurance plans can serve as a great resource for expanding your new patient pipeline. It is critical that you understand exactly what that means for your practice. For example, is there value in having an increased number of patients coming into the practice? Even if these plans reimburse less competitively than other plans, there could be definite value. Keep in mind that many times these patient encounters can lead to additional revenue streams such as sunglass sales, additional pairs of glasses sold in the optical, and supplemental revenues generated from ancillary testing as a result of medical findings during the initial examination. One could argue that it is more valuable to lose the battle when it means winning the war. In other words, you may find that you could score bigger by having the opportunity to take advantage of additional revenue streams that are created as the result of your participation in these plans even though they offer lower reimbursement.
Is It Worth It?
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There are other factors that must be taken into account when considering an insurance plan in your practice. For instance, it is critical to understand the metrics of your practice. By understanding key metrics such as your chair cost and revenue generated per patient, you will have an easier time determining whether or not these plans make sense. In the event that you accept a plan that offers less competitive reimbursement, I would encourage you to continually measure the capture or conversion rate of these additional revenue streams in your practice so that you know how many of these patients are purchasing second pairs, sunglasses, or are referring new patients to you as a result of your participation in these insurance plans.
Can You Hit the Easy Button?
The ease of use of filing the insurance claims and getting paid for it is a key factor in determining the viability and longevity of the insurance plan in the practice. For example, if it is very difficult to get good customer service or if the length of time it takes to get a claim paid is rather lengthy, that could be enough of a reason to decline participation in the plan. For all practices, particularly new practices, having a tight handle on your practice’s cash flow is very important. You don’t want to limit your flexibility and create your own cash flow crunch as a result of the unpredictable nature of the payouts of “practitioner unfriendly” plans. I would encourage you to avoid plans that are notorious for this type of behavior.
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