Impact of curtailing unprofitable services RESPONSES
Randy McFarland
Description
Collection
Title:
Impact of curtailing unprofitable services RESPONSES
Creator:
Randy McFarland
Date:
4/26/2007
Text:
ORIGINAL POST
Hi List members,
I have heard that some O&P providers are cutting out certain services
that are cost prohibitive. (For instance, corsets, compression hose,
foot orthotics, shoes.) I'm wondering if this policy has worked as
intended or if it caused some referral sources/contracts to go
elsewhere? Please share what you have experienced. Thanks, Randy
McFarland, CPO Fullerton, CA
RESPONSES
My company is still full service but all my competitors have gone the
way of only doing the high profit services. We have received some
contracts because we are full service.
When we opened our business 11 years ago we told everyone up front we
would only be doing custom work ( positive spin ).
Did cause some trouble for a time but in the end we developed the
reputation we were after: the go to people for the more involved
patient.A saying I used several times was If you need a bird house
built do you call an Architect? Then I would explain our education in
P&O and
experience and explain that we need to focus on our patients that really
need our specialized level of care. Then we would give them the names
and phone numbers of the people who provide the simpler services: Shoe
stores, DME companies, Pharmacies....
In our office each CP or CO needs to generate $225/hr to just pay
their salary, lights, support staff...not including any profit. You can
hardly do that delivering shoes and corsets. You can't do that if you do
house calls either.
Judging from the interest on our website/webstore, other Allied Health
is chomping at the bit for this stuff. (O&P Supplier)
I have a business in a small town and specifically chose to do those
things the local medical supply store did not do. They do corsets,
compression hose, cock-up wrist splints. With this model, you are
fitting the needs of the community as well as getting a great referral
source from the medical supply store. Thus, one is doing just the
high-quality custom items...so it all really depends on your marketing
aspect and the community needs.
The elimination of certain services was not an option for us so we
decided to maintain our service level. For those items where a provider
under cut the price we usually will explain to the patient that the item
coverage is limited and if they still want the better brand that they
can pay the
difference. This especially true with diabetic shoes and inserts. We
always show them both brands before so that they can choose. In some
cases we have renegotiated certain items best on manufacturers invoice
such as corsets and compression stockings. For most of our managed care
and insurance contracts they no longer pay for some items so that has
solved part of the problem such as foot orthotics and stockings. In
addition some contracts we had to drop because they were only sending us
corsets, foot orthotics and shoes and not paying a reasonable price. We
have had more problems with timely payments as well as getting pre
certs. It seems that most patient are not aware that they need pre
authorization and get angry that we can just hand it to them. That is
becoming more frustrating for my staff and myself.
I went to a policy of telling the patient that I can no longer afford to
subsidize their insurance carrier. I offer to provide the item in
question on a cash basis and to refund to them any reimbursement that I
receive. It is then up to them to make a decision, some leave, some
stay and pay.
Yes, I know this policy gives the insurance company the ability to
void the contract, but quite frankly, they don't seem to care. Most
people that leave, don't complain, they just go on to the next provider.
I have never had an inquiry from an insurance company!
I'm not suggesting this as a policy to be adopted by others, it's
just what I have done. It was easy for me to come to this decision as
I'm only a few years from retirement and won't lose any sleep if a
contract were pulled.
Also, I don't suffer any guilt pangs, because the cheaper insurance
is what many people want. Where is it written that I/we (medical
professionals) need to loose money so that the patient's insurance
company can get richer? (United HealthCare reported 2.1 BILLION DOLLARS
profit for the last two quarters of 2006. That's one insurance company,
six months of operations. Combined, all of O&P didn't report 1/10th of
that! The only leverage that we have is the patient.
I think that is the only way to go. You have to have products that your
niche referrals wants and is not easily done by other providers. In my
case it is products around the R-Wrap AFO and VGAP socket system.
One more point is patients that do not tell the truth, about their
history, symptoms, and problems they are having, that patient needs to
be asked to leave the office. We waste so much time making stuff for
this group of patients and it will never feel right. Spotting this
group will save enormous amount of money. I am at a point that I
restrict my referrals to places that will work with me; by making sure
the paperwork is done, having the doc on board.
It is my feeling that when these things happen Medicare is paying us too
much. Most of my work is paid at a rate that is 30 percent below
Medicare. I still make a lot of money. My only problem even with
restricting referrals is trying to keep up with the work. It is very
hard to turn patients away. Yes, trying to get someone (provider) to
work this way is next to impossible, I do not really understand why.
There's no doubt that the orthotic ship is sinking, but is that any
reason not to grab a life raft? Yes, CMS is no longer paying a
reasonable fee for corsets (or Warm n' Forms), but there are alternative
corsets that get proper coding, like our LumboLux(tm). It costs you
$77 ($68 with quan. discount) and reimburses about $350! Why hurt your
practice by discontinuing corsets when all you need to do is switch to
one that has proper reimbursement? This only applies to corsets, so
your question remains to be answered, but it is a valid - if partial -
answer to tell people to search for profitable alternatives rather than
to abandon ship.
I am doing that here in my office, and EVERY doctor here totally
understands the issues and have no hard feelings against me for it.
They understand that I cannot provide services that are big money losers
for any company. They all know my reputation and that I am an honest
person just trying to help those that I can help. And, if some greedy
bastards in some insurance company make it impossible for me to do my
work, they do not fault me for it. They are all in the same boat that
we are in, and we all share the same disgust for the insurance
companies.
Hi List members,
I have heard that some O&P providers are cutting out certain services
that are cost prohibitive. (For instance, corsets, compression hose,
foot orthotics, shoes.) I'm wondering if this policy has worked as
intended or if it caused some referral sources/contracts to go
elsewhere? Please share what you have experienced. Thanks, Randy
McFarland, CPO Fullerton, CA
RESPONSES
My company is still full service but all my competitors have gone the
way of only doing the high profit services. We have received some
contracts because we are full service.
When we opened our business 11 years ago we told everyone up front we
would only be doing custom work ( positive spin ).
Did cause some trouble for a time but in the end we developed the
reputation we were after: the go to people for the more involved
patient.A saying I used several times was If you need a bird house
built do you call an Architect? Then I would explain our education in
P&O and
experience and explain that we need to focus on our patients that really
need our specialized level of care. Then we would give them the names
and phone numbers of the people who provide the simpler services: Shoe
stores, DME companies, Pharmacies....
In our office each CP or CO needs to generate $225/hr to just pay
their salary, lights, support staff...not including any profit. You can
hardly do that delivering shoes and corsets. You can't do that if you do
house calls either.
Judging from the interest on our website/webstore, other Allied Health
is chomping at the bit for this stuff. (O&P Supplier)
I have a business in a small town and specifically chose to do those
things the local medical supply store did not do. They do corsets,
compression hose, cock-up wrist splints. With this model, you are
fitting the needs of the community as well as getting a great referral
source from the medical supply store. Thus, one is doing just the
high-quality custom items...so it all really depends on your marketing
aspect and the community needs.
The elimination of certain services was not an option for us so we
decided to maintain our service level. For those items where a provider
under cut the price we usually will explain to the patient that the item
coverage is limited and if they still want the better brand that they
can pay the
difference. This especially true with diabetic shoes and inserts. We
always show them both brands before so that they can choose. In some
cases we have renegotiated certain items best on manufacturers invoice
such as corsets and compression stockings. For most of our managed care
and insurance contracts they no longer pay for some items so that has
solved part of the problem such as foot orthotics and stockings. In
addition some contracts we had to drop because they were only sending us
corsets, foot orthotics and shoes and not paying a reasonable price. We
have had more problems with timely payments as well as getting pre
certs. It seems that most patient are not aware that they need pre
authorization and get angry that we can just hand it to them. That is
becoming more frustrating for my staff and myself.
I went to a policy of telling the patient that I can no longer afford to
subsidize their insurance carrier. I offer to provide the item in
question on a cash basis and to refund to them any reimbursement that I
receive. It is then up to them to make a decision, some leave, some
stay and pay.
Yes, I know this policy gives the insurance company the ability to
void the contract, but quite frankly, they don't seem to care. Most
people that leave, don't complain, they just go on to the next provider.
I have never had an inquiry from an insurance company!
I'm not suggesting this as a policy to be adopted by others, it's
just what I have done. It was easy for me to come to this decision as
I'm only a few years from retirement and won't lose any sleep if a
contract were pulled.
Also, I don't suffer any guilt pangs, because the cheaper insurance
is what many people want. Where is it written that I/we (medical
professionals) need to loose money so that the patient's insurance
company can get richer? (United HealthCare reported 2.1 BILLION DOLLARS
profit for the last two quarters of 2006. That's one insurance company,
six months of operations. Combined, all of O&P didn't report 1/10th of
that! The only leverage that we have is the patient.
I think that is the only way to go. You have to have products that your
niche referrals wants and is not easily done by other providers. In my
case it is products around the R-Wrap AFO and VGAP socket system.
One more point is patients that do not tell the truth, about their
history, symptoms, and problems they are having, that patient needs to
be asked to leave the office. We waste so much time making stuff for
this group of patients and it will never feel right. Spotting this
group will save enormous amount of money. I am at a point that I
restrict my referrals to places that will work with me; by making sure
the paperwork is done, having the doc on board.
It is my feeling that when these things happen Medicare is paying us too
much. Most of my work is paid at a rate that is 30 percent below
Medicare. I still make a lot of money. My only problem even with
restricting referrals is trying to keep up with the work. It is very
hard to turn patients away. Yes, trying to get someone (provider) to
work this way is next to impossible, I do not really understand why.
There's no doubt that the orthotic ship is sinking, but is that any
reason not to grab a life raft? Yes, CMS is no longer paying a
reasonable fee for corsets (or Warm n' Forms), but there are alternative
corsets that get proper coding, like our LumboLux(tm). It costs you
$77 ($68 with quan. discount) and reimburses about $350! Why hurt your
practice by discontinuing corsets when all you need to do is switch to
one that has proper reimbursement? This only applies to corsets, so
your question remains to be answered, but it is a valid - if partial -
answer to tell people to search for profitable alternatives rather than
to abandon ship.
I am doing that here in my office, and EVERY doctor here totally
understands the issues and have no hard feelings against me for it.
They understand that I cannot provide services that are big money losers
for any company. They all know my reputation and that I am an honest
person just trying to help those that I can help. And, if some greedy
bastards in some insurance company make it impossible for me to do my
work, they do not fault me for it. They are all in the same boat that
we are in, and we all share the same disgust for the insurance
companies.
Citation
Randy McFarland, “Impact of curtailing unprofitable services RESPONSES,” Digital Resource Foundation for Orthotics and Prosthetics, accessed November 2, 2024, https://library.drfop.org/items/show/228096.
