Q: Can our practices expect growth in the coming years?

 A: Yes. Because ophthalmology practices serve an aging population, practices can expect significant growth in potential patients during at least the next 10 years.


Q: Will the growth be primarily Medicare beneficiaries?

A: Most likely. In 2008, there were 44.8 million Medicare beneficiaries. With the baby boomers reaching Medicare age, it is projected that 55 million people will be age 65 or older by 2020. By 2030, 20 percent of the U.S. population will be age 65 or older and baby boomers will likely live longer. The Department of Health and Human Services predicts that the growth of an aging population will cause a surge in the demand for physician services, and the needs for ophthalmic services will increase 28 percent from 2005 to 2020.


Will there be enough providers for this influx of patients?

A: It is difficult to project, but at present, the answer appears to be no. It has been noted that a significantly larger number of physicians retire each year than enter medical school. And those entering the workforce are working fewer hours and seeing fewer patients.

It may be worthwhile to consider expanding on non-covered items and services, especially when considering the potential for an increase in Medicare patients and an uncertain Medicare Physician Fee Schedule. Ophthalmologists have many services available to patients that are non-covered and patient-pay. They include: screening services, cosmetic services, refractive procedures (LASIK, LRIs, CK) and upgraded intraocular lenses (presbyopia-correcting or astigmatism-correcting intraocular lenses) at the time of cataract surgery. Additionally, some practices offer AREDS vitamin supplements to patients, particularly elderly patients at risk for age-related macular degeneration. These items and services complement your existing services and provide patients with alternatives. Constraints from third-party payers are not part of the equation with these non-covered services. Patients do need to be informed, and getting the patients' written acceptance of financial responsibility on an appropriate waiver form is a good idea.


Q: What issues should I consider for my optical dispensary?

A: Is your optical dispensary profitable? Consider strengthening your optical by reviewing and adjusting your optician's goals. How many jobs do you have per full-time optician? What is the average cost per job? You can improve the optician's effectiveness with training, additional sales aids and sufficient inventory.

Also, secret shop your optical department. Is the layout and décor conducive to your patients? Are frame boards up-to-date? Is it organized and clean? If not, invest where needed. Expenditures need frequent monitoring. Too much inventory with slow turnover and breakage along with high lab costs can erase any profit margin in optical. Revisit these issues along with collection activity to ensure you're securing a good return from your dispensary.


Should I pay more attention to coding and billing for the services provided?

Yes. Selecting the proper level of service for exams requires attention to detail and comprehension of the coding system. Ophthalmologists favor the eye codes (920xx); they select them twice as often as evaluation and management codes. While not universal, these codes do cover the majority of patient visits, but you still need E/M codes to capture the full range of services. By better understanding the requirements for the various levels of service, you'll gain more confidence in using a wider selection of office visit codes and enhance practice revenue.

In addition to the level of service, there are other coding issues of importance. Pay attention to diagnosis coding and modifiers. Appropriate diagnosis codes improve the quality of the claim for efficient processing and may determine who is responsible for payment. Modifier errors are common. Inaccurate modifiers may cause a claim denial, unnecessary reduction in reimbursement or an overpayment.

Some services require daily attention on a patient-by-patient basis.  Are all the services provided being reported to the billing department? Improving charge capture is a fast way to improve revenue. Having a system in place to ensure that all services are billed is vital.


Q: Should I take Medicare's attention to physician claims seriously?

A: Yes. Comprehensive Error Rate Testing, Recovery Audit Contractors and Zone Program Integrity Contractor reviews are on the rise and should be taken seriously. Contractors typically re-view "outlier" practices based on their practice patterns. It's important to know if you are an outlier.


Q: What defines my practice patterns and possible outlier status?

A: The number of times you perform a procedure is your utilization rate, and the frequency of use of all procedures is your practice pattern. Payers analyze physicians by comparing their practice patterns to others of the same specialty. From this analysis, they can identify an outlier and potential red flag for an audit. Being an outlier doesn't mean that you have done something wrong, but knowing you look different should motivate you to validate your code selection and verify that documentation supports the aberrant pattern.


Q: How can knowing my practice patterns help me during challenging times?

A: Your practice pattern may also reveal an opportunity for increased revenue. Perhaps you perform a service less frequently than your peers. It's unlikely that a payer will ask you to increase utilization; you have to identify that gap yourself.

Utilization statistics provide the data necessary to forecast future financial performance. Anticipating potential revenue based on your practice patterns is a great tool for budgeting.


Q: Is it worthwhile to adjust my fee schedule?

A: Yes. At a minimum, you should examine and adjust your fee schedule annually. Your fee schedule should be reasonable, with rates promulgated by most third-party payers and weighed toward your larger payers. For patient-pay services (e.g., refractive surgery), consider the local market rates and set comparable rates. For most, a universal fee schedule with a solitary fee for each service works best. This reduces data entry errors and simplifies phone inquiries.


Q: Is it necessary to schedule more patients to increase revenue?

A: Possibly. One approach to increasing revenue is seeing more patients. It is worth a look. For most, the addition of one or two patients per session (a session is defined as a half day) is manageable. A few extra patients per day could return thousands of dollars with minimal additional practice expense.


Q: How else can we improve operations and survive these challenging times?

A: Examine all aspects of your billing office. Is the check-out person collecting for non-covered items at the time of service? Do you hold the billing office accountable for timely filing of accurate claims, keeping accounts receivable within certain parameters, attacking resubmissions and claim denials? Is there a daily closing and reconciliation process? When all is said and done, how efficient your billing office is at managing claims and accounts receivable will have a significant effect on your success.


Ms. McCune is vice pres-ident of the Cor-coran Con-sult-ing Group. Con-tact her at DMcCune@corcoranccg.com.