Is Insurance Defining Your Practice?

The decision to become a participating provider is not as easy as you think.  We have seen managed care change dramatically over the past 20 years.  Even though hearing health care and hearing aids were often value-added discount items rather than covered benefits, it helped having the office or audiologist/dispenser’s name in the providers directory for referrals alone.  In Arizona, we are seeing more Insurance companies use hearing benefits as a carrot to get people to sign on with their plans.  The practice has grown beyond Medicare Advantage programs appealing to senior; now we are seeing it with giant healthcare companies appealing to potential members of all ages.

Having a knowledgeable, even-tempered office staff person deal with insurance from the moment the patient calls for the first appointment helps.  It is best to be prepared and get the insurer’s name, group number, ID number and provider number on the back of the card at the initial phone call for the first appointment.  Over the past several years, more national hearing specialty independent provider groups, such as EPIC, have negotiated contracts with  major insurance companies, especially United HealthCare.  The negotiated benefits vary from contract to contract.

We, the providers, have to know what the benefits are and how they are handled before we see the patient.  With these contracts, the provider may have to call for a price of a hearing aid while the patient is in for the consultation.  In some contracts, the negotiated price allows balance billing over and above the instrument benefit; others require the provider to sign an affidavit that they will not balance bill.  After approval, which can take days, the provider can fit the patient and is paid a fitting fee.  Some of the fees are so low–practically an insult considering the time required to fit properly– but others are very reasonable.  It is up to provider to assess the different negotiated contracts and determine whether it is in the practice’s best interest to sign up or not.

I realize everyone needs to save money where they can and we extend ourselves as much as possible to accommodate patients with different contracted insurance benefits for our services and products.  This approach has increased my offices’ time on the phone finding out specific benefits, time at the appointment because we do not know the price, and time for fitting because we have to wait for approval.  We normally can fit same day with certain technology, but not with this new set up.

The last struggle is what to do when your office’s prices are significantly lower than the national third party contract holder.  It can be a few hundred dollars to over a thousand.  If this is the case, your office could 1) raise their prices to more closely match 2) keep your pricing the same as long as you are covering all of your over head costs and you will have great word of mouth for having great competitive pricing and great service for those who do not use this particular third party contract holder or 3) keep your pricing, have patients buy directly from you and run the risk of loosing your contract because you are undercutting your contract (I do not advise this as it is unethical and can lead to many problems some possibly getting sued!).  In my opinion, the private practice must have listed pricing from the third party contract holders so the same retail pricing range can be used and no one “takes” hearing aid sales from other referral sources.

Should we be participating providers?  Some say yes, to help the patient get the best possible fitting and service, but are we also driving up prices and will we find a backlash as well?  Others may say no, it costs too much for the provider’s office to go through the paperwork. By sticking with tight but respectable profit margins, it is better for the business to not deal with the third party payments.

We’ve been discussing pricing issues in our section recently.  Hopefully we have given you food for thought on setting prices and dealing with third parties.

 


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7 Comments

  1. Judy has nailed just about every aspect of very thoroughly. One advantage of participating, however, is that I find patients with these programs very motivated to pursue amplification. There is a definite retail aspect to our industry, whether or not we’re willing to admit it, and the term “close rate” comes to mind. I believe industry statistics suggest a 50% close rate for patients who come to us in general, but I find the close among these patients to be significantly higher–near 100%. I only have to see one of these patients to sell a pair of instruments as compared to two patients through traditional methods. To me, this offsets to a limited degree the reduced reimbursement we receive for the fitting, although I of course wish it were higher since we’re doing most of the work and these networks are simply acting as middlemen.

    With most of them, I have found that their “great deals” for the patients really isn’t too much different from our regular retail pricing; the low-end products are typically higher than us and the high-end are typically lower. EPIC, to their credit, almost always has excellent pricing from the patient perspective, and knowing the invoice costs for the products I’m ordering, I can tell that their not making a killing like certain other providers to do.

    On the occasion where a third party contractor’s price is higher than our usual and customary, I will make them aware of it and offer them the opportunity to match or beat it, in the patient’s best interest. They rarely don’t step up to the plate, eliminating concerns that the patient is overpaying for the product by not ordering directly from me. I also gain points with the patient for negotiating a better price on their behalf.

    I agree with Judy that one big downside is all the paperwork. There have been numerous occasions where we’ve pre-scheduled the patient for their fitting appointment, only to find out that the patient hasn’t paid the middleman for the product or some piece of paperwork wasn’t completed, or they just did not follow through for us. I’ve taken to explaining to the patient that going through the middleman can create hiccups, but I always honor the referral.

  2. There is always a cost vs benefit, even with insurance coverage. If offices choose not to be a participating provider, that does not mean they will refuse to see the patient. As long as the patient knows what their coverage is they can choose to use the benefits through the contracted provider, or not. Most of the time it does behoove people to use their benefits, but you did hit it Mike, know and read the explanation of benefits (EOB) whether you are the provider or patient.

  3. Managed care has always touted that the more people you get in the less profit per customer you need. But it hasn’t worked that way, at least not consistently enough. The only way we will make ourselves stand out is with superior service and word of mouth, that won’t change. Thank you for your comment, I appreciate it!

  4. There is some good with EPIC, they do not have their prices quite as high as some other programs. What I would like to know is how each office gets the “referral” from the third parties. Our offices just need to keep asking questions and figuring out how best to position ourselves.

  5. I enjoyed reading your article and perspectives on insurance issues and if it’s in the best interest of the practice. We do see a slippery slope heading down into internet purchases and reduced profits of third pary insurance carriers.

  6. I contacted EPIC to ask if I could not be a part of the EPIC hearing aid program. I was told that if I didn’t participate, I couldn’t be a UnitedHealth Care provider at all. I see too many patients who have UnitedHealth Care, so I continue to participate in that terrible EPIC hearing aid program.

  7. If you have health insurance for your self, then you would seem to recognize the inherent benefit to any policyholder seeking health care. Hearing loss patients are not different. Considering this demand for “audiology participation”, the rather large number of hearing impaired people out there, and the insurance company that wishes to make a profit on “illness” of all types, it seems easy to predict the direction of these insurers in our businesses.

    I think the real challenge is in figuring out how audiology participates in these methods of reimbursement and still maintains some control on the flow of money (read reimbursements). Refusal to accept patients who wish to have some of the costs covered by a third party will lead to a very obvious outcome.

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