Surviving Managed Care^© Newsletter

Volume 1, Number 4 Winter, 2000

Vision and Eyecare Business Information For The Millennium

Objectives:

To examine and understand how staff actions and attitudes can strengthen or fracture sometimes fragile patient loyalties under managed care; to examine and understand how subrogation clauses in capitated managed care agreements create opportunities to recover funds paid out for patient care.

  Preserving Patient Loyalty In A Managed Care World: How Can Staff Help?

Managed care certainly has changed the dynamic of how patients come to be your patients. With restricted provider panels and limited choices, in many cases you're not so much "chosen" as "designated," and that can and does impact on patient loyalty.

Many patients will present solely on the basis of a referral from another plan provider who selects you for them. In some cases the patient may have requested a referral to you based on a recommendation from a friend or co-worker, and if you're on the list and if the PCP will create the referral and payment pipeline, that's fine. But in a surprisingly large number of cases patients come to you not by personal recommendation or PCP choice, but as the result of a patient picking your name from a provider directory — a geographic happenstance that your office is convenient to the patient's home or workplace.

Given that many new patient relationships in managed care are initiated under less than ideal circumstances (and can just as easily be severed), it's essential that everyone in the practice does everything possible to make each patient feel welcome, comfortable, and appreciated. Surviving managed care requires that each patient leaves your office with a "warm and fuzzy" feeling — a sense that even under managed care's constraints and inconveniences she felt as if you and your staff really cared about her.

Here are four tips I recommend for making your front and back offices and the optical dispensary more professional and attractive to patients. Ultimately that should translate into more referrals, more retained patients, and a more profitable practice, particularly in the dispensary. If you follow these tips and get your teams to adapt them into your practice I'm confident you'll be pleased with the results.

Tip #1:    Treat Patients With The Respect They Deserve -- Avoid Over-Familiarity

In a managed care world one simple, no-cost way to cement patient loyalty is to make every patient feel respected. That begins with how your staff addresses each patient at every stage of the office visit. Far too often I've observed staff members unconsciously making patients uncomfortable and, thereby, creating reasons for patients to take their business to someone else in the provider directory.

For example, I am constantly amazed to hear front and back office staff and opticians in their early 20s walk into the reception area and call out "Mary," or "Albert," only to have a 70 year old stand up. The patient's immediate discomfort with such over-familiarity is easy to read on his or her face.

Quite simply many patients consider it disrespectful to be addressed by their first name, but it's particularly disrespectful to senior citizens. I recommend that your staff formally address patients (e.g., "Mrs. Smith," or "Mr. Watkins," or "John Grant"). Seniors and Medicaid patients, in particular, should be treated with deference and respect since many of them feel that the entire managed care system relegates them to second class status. They can and will vote with their feet if given a reason. And one shouldn't be surprised to find they've complained to the HMO's Member Services Department.

I also urge you to think carefully about any existing or contemplated protocols that tag charts to identify a patient as "managed care." While I certainly understand the underlying intent (to facilitate paperwork and claims processing, and give staff a "heads-up" to verify proper referral forms, etc.), in some cases the tagging inadvertently creates in the staff's mind a two-tiered perception of patients -- private pay and 3^rd party.

I think everyone appreciates that the practice must guard against anything that even smacks of differentiation. Your provider agreement certainly prohibits it, and your patients will certainly sense it from the staff. But, as with so many other things, day to day repetition of what's become comfortable can move a practice to a very slippery slope and, possibly, some easily preventable problems. So be very careful and handle every managed care patient as if he or she were private-pay. (With things going the way they are with many Medicare HMOs, your patient might again be private pay sooner than you think.)

Tip #2:    Don't Turn Patients Loose In The Optical Dispensary Without Some Initial Guidance

While your patients should be encouraged to browse, they should not be turned loose at the frame displays following the exam without some initial contact from the optician. It's essential to greet every patient, review the Rx, and engage in a brief discussion on eyewear needs or interests. With that brief intercession the optician can then "guide" browsing patients toward the frames or lenses most likely to suit their needs. There is solid logic behind this, particularly in a managed world .

Based on first-hand experience as an optician I know there is nothing more frustrating for the patient or counterproductive for the optician than to turn a patient loose to self-shop without guidance, and then have to tell her that the frame she fell in love with won't work (Rx, facial structure, lifestyle needs, etc.). It's almost fait accompli that after 45 minutes trying on every frame in the dispensary Mrs. Jones, a six diopter myope, will self-select a frame with too wide a bridge or too long an effective diameter. And Mr. Smith will select a very small, "trendy" oval frame with a "B" dimension (top to bottom) too small for the progressive multifocals he wants.

When your optician tells Mrs. Jones that the frame she chose will constantly slide down her nose or that the lenses will be heavy and thick on the edges, she's understandably upset. Her time was wasted, her hopes dashed, and she's wondering why staff didn't make her aware of important considerations at the front end. Mr. Smith's disappointment is similarly problematic. At best the optician now has to start from scratch to "resell" the patient. In a worst case scenario patients are so frustrated and displeased that they leave.

At a minimum, upon completion of the exam, I suggest your staff engage every patient in a few minutes of pre-discussion to review the Rx and visual needs for both work and leisure. I strongly recommend implementing a policy to discuss and select the lenses first, before looking at any frames.

This not only increases staff productivity per patient and per hour, but also educates the patient on the interdependence of proper frame selection and Rx fabrication. That builds patient trust and confidence in your staff which should translate into more sales and more profitable sales, particularly on upgraded lenses and better quality frames. And that's key to profitability and surviving any managed vision care program.

By educating each patient and maximizing the productivity of his or her time, your staff will take an important step to capturing that person's purchasing loyalty. And loyalty in a managed care world is gold.

Tip #3:    Explain All Instruments; Watch What You Say

You may find this section surprising, perhaps unbelievable. If so, don't. Again, the advice comes from first-hand observation and extensive discussions with patients.

Patients can be put-off, even scared by back office and optical dispensing staff's use of "inside" language. Particularly when using instruments and taking measurements staff must be careful not to use ostensibly innocent, but ultimately threatening words. Here's a seemingly silly, but very telling example.

I once observed an optician tell a patient I need to take your P.D. A few moments later he pressed a pupilometer against the patient's forehead, observed, and then, without any further words, turned his back on the patient and started writing numbers on the eyeglass order form.

Will I get it back, asked the patient. Get what back, asked the optician. My P.D., replied the somewhat nervous patient.

The optician laughed but failed to realize it was no joke to the patient who did not understand what "taking the P.D." meant. Nothing tangible was physically to be taken from her, but you could just see the confusion in the patient's face when the optician turned away and started writing. All the patient understood was that the optician was laughing, making her feel insecure, uncomfortable, and disrespected. That was a danger sign — the practice was at risk of losing a patient.

It's important that all staff members make a conscious effort to put patients at ease around the instruments. This includes contact lens dispensing and back office staff who inadvertently can create the same discomfort when using a keratometer, phoropter, tonometer, auto-refractor, etc. I recommend that staff briefly explain each instrument's purpose (it only takes a few seconds) and reassure the patient that the measurement process is quick and painless. Avoid leaving seemingly innocuous but open-ended phrases to the patient's vivid imagination. (e.g., I'm going to take your K readings, or I'm going to shoot a puff of air into your eye to measure your pressure.)

Trust me on this one; statements such as these are made all the time without any thought given to what's being said. (It's so routine, after all.) But if staff makes an effort to put every patient at ease around the instruments, your patients will appreciate that incremental difference, the caring attitude. Your staff's credibility in the mind of each patient will rise. And your staff will take another important step to cementing patient loyalty in a very unforgiving managed care world built on provider directories.

Tip #4:    Be Very Careful With Contact Lens Solution Samples

Before having PRK a few years ago I wore soft contact lenses. Occasionally when I received new lenses, whether replacements for what I was wearing or lenses from a different manufacturer, I'd get a pre-packaged baggie stuffed full of contact lens solutions — cleaners, saline with and without disinfectant, artificial tears, etc. And usually the contact lens tech would toss in whatever additional samples had been left by recently visiting sales representatives.

Now, as someone in the business you'd think I'd have been able to sort though the samples and figure out what was what. But it was beyond me to know which solutions were appropriate for my new lenses and, more importantly, which were not. I had no idea which could interact adversely if used together or sequentially.

At least I knew enough to ask. But I can only imagine what kinds of "witches brews" the lay public must instill in its eyes when similarly handed a collection of samples — typically without adequate (or any) documentation on their use or misuse.

I know that I came away feeling that the doctor's staff had left me unprepared to care for my new lenses, and that upset me. When it happened a second time I switched doctors. Are some of your managed care patients doing the same when deciding where to spend discretionary contact lens dollars?

I suggest scrutinizing your office protocols on samples. Be sure that staff reviews with each patient the purpose and appropriate use of every sample solution supplied in the baggie. It only takes a few minutes. Also, to prevent staff and patient confusion in the future, be sure to update the medical record each time samples are handed out. These may be the little extra touches in patient care that differentiate your staff and practice and keeps the patient and his or her continued contact lens business in your office.

And though they cost you nothing or next to nothing, resist patient appeals for additional sample products, and consider supplying only those samples chosen for each patient's specific circumstances. That may be tough for staff, and techs may be tempted to give additional samples in a well-intentioned attempt to please the patient. But if that patient is then more likely to have problems, a reaction to the "witches brew," ultimately it's the wrong thing to do. Your downside could be additional chair time for which you likely won't receive additional compensation.

  Subrogation: Are You Leaving Money On The Negotiating Table?

There's a little appreciated and generally misunderstood provision in most managed care provider agreements. It's called Subrogation, and in certain circumstances having the right contractual language could mean thousands of dollars to your practice, group, or network.

Subrogation is a means by which healthplans that have paid for healthcare services on behalf of their members can recover some or all of those costs from money paid to those members by a third party. So, for example, assume Joe Smith is hurt at an amusement park and an HMO pays you for Joe's care. Subsequently, Joe recovers money in a suit against the amusement park. The HMO can then collect from Joe's settlement an amount equal to its outlay for his care.

That's Subrogation, and it's standard fare in the contract each subscriber signs when enrolling in a managed care plan. He/she agrees that the plan can take such recovery right off the top of any award or payment.

A healthplan puts Subrogation language into provider agreements as a means to obligate you to assist it in recovery of such monies from your patients (usually involving little more than supplying certain documents). The contractual provisions are sometimes set-off in a section by themselves. Other times you'll find them tucked away under Coordination of Benefits.

If you're a fee-for-service provider and the plan has paid you for Joe's care then you're covered financially — and your cooperation helps the plan recover what it's legally entitled to. After all, the plan was at risk for Joe's care and it took the financial "hit." However, if you're a capitated provider (or group/network), at risk and paid only a nominal capitated amount, then you, not the plan took the "hit," and you should be entitled to Subrogation recovery rights which could, depending on the case, amount to hundreds or thousands of dollars. Did I just hear an "a-ha" from all of you?

As a capitated provider, worried about surviving managed care, you should not miss any opportunity to collect revenues in addition to your at-risk payments. So it's important to understand that Subrogation is not a financial recovery mechanism exclusively reserved for healthplans — it's also available to providers. But, you must take steps to secure those recovery rights in your provider agreement. If you don't then the plan retains the rights and can collect and keep all the money recovered from third parties, pocketing a handsome, undeserved bonus.

Let's look at a hypothetical example. A patient comes to you after being struck in the face by a ball during a baseball game. He presents with obvious facial lacerations and you suspect an orbital fracture. Your examination also discloses abrasions to the cornea and sclera. You treat what you can and send the patient for x-rays (which confirm the orbital fracture). Over the next several weeks he requires multiple visits and treatments with several providers in various facilities, amounting to several thousand dollars in covered services.

Assume that payments to all physicians and to the diagnostic imaging center come from your capitation. Your group's cap budget takes a significant financial "hit" — not pleasant but understood as one of the risks you agreed to bear when accepting the capitation contract.

Then later you learn that the patient was participating in his part time role as a semi-professional baseball player, and was injured during a league game — i.e., he was hurt in the course of his employment. Now your sharp administrator realizes that it's a workers compensation case, and recoveries from the state workers compensation fund are available. She recognizes that those monies should go to you, not to the plan.

So she checks the provider agreement only to discover that you did not secure the rights to Subrogation against the patient — the plan still retains those rights. And so it pockets the cash recovered from the state fund. In fact it makes money twice — first from the monies it carved off the top of the premium before passing the capitated risk to you and, second, in the windfall recovery from the state. Again, did I hear an "a-ha"?

And therein lies the problem. Too often physicians discover only after the fact that they did not secure Subrogation rights. So, what to do?

First ask the plan (or ask your attorney) to create language transferring comprehensive Subrogation rights against the member from the plan to you (subject, of course, to any limitations or considerations imposed by state law). Ideally you'll want exclusive recovery rights for any services you provide or pay for. You also want something included which protects you in the event of an action initiated by an irate patient who doesn't understand why you're seeking financial recovery against him or her. (After all, as far as the patient knows you've already been paid by the healthplan.)

An experienced healthcare attorney should also mention that it's important to examine each provider agreement's wording wherein you agree to hold the member harmless for any payments over and above your agreed reimbursement on covered services. Unless the document is worded properly you could find yourself precluded from Subrogation collections (even if Subrogation rights are contractually transferred from the plan) since your capitation normally would be considered payment in full for covered services.

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These materials are intended to provide useful information about the subject matter covered. The author believes that the information is as authoritative and accurate as is reasonably possible and that the sources of information used in preparation of the materials are reliable, but no assurance or warranty of completeness or accuracy is intended or given, and all warranties of any type are disclaimed.

The materials are not intended as legal advice, nor is the author engaged in rendering legal services. The materials are not intended as a replacement for individual legal or professional advice. Information contained herein is presented only for illustrative purposes, and it should not be used to establish any fees or fee schedules, nor is it intended and it should not be construed as encouraging any user of the materials to take any actions that would violate any state or federal antitrust laws, tax laws, or Medicare or Medicaid laws.

Copyright © 1997, Gil Weber, MBA. No part of this newsletter may be reproduced or distributed in any form whatsoever without the author's prior written authorization.

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