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Take systematic approach to assessing insurance plans

October 13, 2013

The enactment of the federal Affordable Care Act (ACA) and changing conditions in the insurance market are spurring introduction of numerous new health insurance plans as well as revisions to existing insurance programs, according to the AOA Third Party Center.

Practicing optometrists may be receiving offers to participate in new health insurance plans as well as revised provider agreements for programs under which they already provide care, noted Charles Brownlow, O.D., who frequently writes and lectures on third-party payer issues in addition to serving as a consultant to AOAExcel™.

Although optometrists have now been providing eye and vision care under third-party plans for more than 30 years, many still take what Dr. Brownlow considers to be a somewhat haphazard approach to relations with insurance plans.

“As matter of sound practice management in an increasingly competitive health care environment, each optometrist should carefully and systematically evaluate all provider agreements, just as they would an investment opportunity or a major purchase,” Dr. Brownlow said.

In addition to not properly reviewing provider agreements, many optometrists still do not realize that the terms of those agreements may be negotiable, Dr. Brownlow said.

“In many cases, insurance plans will consider changes in their provider contracts to accommodate the needs of individual practices,” Dr. Brownlow said. “However, many practitioners simply never bother to ask.”

Health care groups or associations cannot use professional bargaining agents when dealing with insurance companies because, unlike union laborers, licensed health care practitioners do not have authority to negotiate collectively under federal law. Individual practices, however, may be assisted by consultants or agents in their negotiations with insurers.

“Every practice is unique,” said Dr. Brownlow. “The needs of one practice will be different from the next. Health care practitioners stand to benefit from individually negotiating contracts that meet the specific requirements of their respective practices.”

The real problem is that many optometrists lack a systematic approach to insurance plan relations.

Steps to take in plan evaluation

Dr. Brownlow suggested the following steps during his presentation at the AOA State Legislative and Third Party National Conference:

1. Meet with the practice accountant and other advisers to develop parameters for acceptable provider agreements for the practice. The parameters should be based on the individual practice’s established fee schedule, scope of practice, needs of patients, and other considerations in the practice. In order to legal comply, practitioners must not collaborate with other practices to establish parameters. The parameters need to be unique to the practice.

2. Research all the insurance plan contracts under which the practice now provides care. (If a contract cannot be found, contact the insurer and ask for a copy of the plan’s current provider contract, as well as the next renewal contract, if available.) Add any prospective provider agreements for any new plans sent to the practice.

3. Compare the parameters developed for the practice to the components of each provider agreement.

4. If the components of the contract meet or exceed the parameters established for the practice, the practitioner will probably wish to join the new plan or renew the contract.

5. If one or more of the components falls short of the parameters, the practitioner should prepare to negotiate with the insurer. In such cases, inform the insurer the practice would like to negotiate some components prior to accepting or rejecting the contract or renewal.

6. If the insurer is willing to negotiate, work constructively to reach the best agreement possible. If the insurer refuses to negotiate, discuss the options with the practice accountant and advisers and make a decision.

“Even when insurers have a ‘take it or leave it’ approach to their provider agreements, practitioners will almost always be better off knowing that their decisions on third-party coverage have been made based on sound principles and procedures,” Dr. Brownlow said.

Beyond providing an objective measure by which third-party plans can be judged, establishing practice parameters offers an opportunity for an overall review of the practice, Dr. Brownlow suggests. Such periodic reviews can be beneficial to overall good practice management.

“In today’s health care market, the evaluation of insurance programs and, when appropriate, negotiation with insurance plan on the term of provider agreements, has become a responsibility that practicing optometrists must undertake,” Dr. Brownlow said.

The days of accepting or rejecting insurance plans summarily or with minimal review are over.

“There is no shortcut to this process. Provider agreements with insurers are business contracts and, as such, require a business-like approach,” Dr. Brownlow said.

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