VSP cutting reimbursements by 20% starting July 1, 2016.

I am not sure if this has been covered much in this forum, but it seems worthy of discussion. Seems VSP is now going to require you buy $6000 in Marchon product per year or they are cutting your reimbursement on frames by 20%. Here is the paragraph:

You’ll be reimbursed based on the wholesale equivalent of the patient’s retail allowancefor Marchon and Altair frames. Effective July 1, 2016, for all other frames, you’ll bereimbursed at 80% of the patient’s wholesale equivalent frame allowance. If your netpurchases of Marchon and Altair frames are equal to or more than $6,000 LTM, you willbe reimbursed at 100% of the patient’s wholesale equivalent frame allowance for allframes.


The links below show a letter of objection by the AADO and the responses. So if you accept VSP, get ready to see your reimbursements cut unless you abide by their imposed rules regarding purchases of Marchon product. And, if you think the AADO position is right, you can thank VSP for possibly involving you in a criminal kick back scheme.

https://www.theaado.org/files/VSP-Frames.pdf

https://www.theaado.org/files/VSP-reply.pdf

http://theaado.org/files/VSP-Frames-2.pdf


At the same time VSP launches a website to sell frames direct to patients. http://www.eyeconic.com/

Any ideas on how to let VSP know we all do not agree with their play, and push back?

http://www.optiboard.com/forums/show...?highlight=vSP

http://www.optiboard.com/forums/show...?highlight=VSP


The state of California is apparently looking into the matter.

And if offices are truly upset by it and want to get VSP's attention, then everyone that is upset with this change should drop them immediately. Companies only respond when their bottom line is impacted & a big enough pushback from independent opticians and optometrists could make it happen.

However, most people are comfortably miserable with the positions they are in & likely would not want to change a thing.

Wherever there's opportunity, the Mafia will be there. quote: John Kelly

VSP- Vision Super Power

I sat through VSP presentation with the area Vp. It is complete non sense. When you look at VSP of a non Marchon frame we still make out better because of discount. They believe that Vendors only give a max 12%. They feel that by having more Marchon product and giving your patients higher value frames(?) more patients will come to your doors. Just what I need. Work the numbers folks.

Additionally, you will get more attention from Econic online.

We are not moving forward with this.

Is the $6000 based on last years sales? So if you're at $5900 June 30 you're screwed???

Finding companies who give a 20 % discount will be key ... I would think with this mandate more and more independent lines will be competitive so offices are not swayed to flood there boards with the collections we shall not name lol

Quote:

---

Originally Posted by Cat-Eyes

Finding companies who give greater than a 20 % discount will be key ... I would think with this mandate more and more independent lines will be competitive so offices are not swayed to flood there boards with the collections we shall not name lol

---

Your contract does not allow more than a 20% wholesale discount.

Quote:

---

Originally Posted by Uncle Fester

Your contract does not allow more than a 20% wholesale discount.

---

edited

Quote:

---

Originally Posted by ods

I sat through VSP presentation with the area Vp. It is complete non sense. When you look at VSP of a non Marchon frame we still make out better because of discount. They believe that Vendors only give a max 12%. They feel that by having more Marchon product and giving your patients higher value frames(?) more patients will come to your doors. Just what I need. Work the numbers folks.

Additionally, you will get more attention from Econic online.

We are not moving forward with this.

---

I can't help but think VSP has an algorithm that like all algorithms cares only about Marchon's and VSP's bottom line.

This is purposely going to open up the move to brick & mortar retailing for them. For years now we've been giving them all the data they need to move into just the right places.

Pearle Vision is a preferred VSP provider, been quite a big restructuring within the brand (Pearle) in the last 18 months. Been a big push to get all Pearles credentialed with VSP.

Quote:

---

Originally Posted by scriptfiller

Pearle Vision is a preferred VSP provider, been quite a big restructuring within the brand (Pearle) in the last 18 months. Been a big push to get all Pearles credentialed with VSP.

---

Hmmm...Maybe make them an offer they can't refuse???

So would VSP actually attempt to acquire Pearle directly from Luxottica, giving them that national brand presence that they have wanted and does Luxottica actually listen to any offers for Pearle? We can assume Sears will be eventually jettisoned off as the Sears brand itself is dying, but would they actually sell off Pearle?

Quote:

---

Originally Posted by Uncle Fester

Your contract does not allow more than a 20% wholesale discount.

---

Aye, there's the rub, matey.

Fester, you analysis is impeccable.

Can you believe that crap?

In a slightly circuitous manner, the contract is simply saying "you agree to buy frames from VSP".

But let's get serious...think about how Davis or Spectera operate. Which one has that "tower"? Only certain frames covered.

VSP is slowly restricting itself to being vertical stores, and they like it that way. They want to steer their bought-and-paid-for members to VSP friendly offices/retail outlets for extra coin.

Be sure to use their lenses, too...

Quote:

---

So would VSP actually attempt to acquire Pearle directly from Luxottica, giving them that national brand presence that they have wanted and does Luxottica actually listen to any offers for Pearle? We can assume Sears will be eventually jettisoned off as the Sears brand itself is dying, but would they actually sell off Pearle?

---

Everyone has their price. Maybe VSP will go los lobo but a ready made chain makes sense. Lux is still in a cash crunch-no? US anti-trust get pushed aside- the list goes on.

Where are the girls from Eyeoverheard when you need them???

I'm sure VSP and Lux would be very happy to do a deal.

I think Pearle is a turkey. If I were Lux, I'd be happy to sell it to my competition...for a pretty penny, that is.

VSP is unlikely to survive in this strategy, but they sure want to give it a try. Their current model is endangered greatly by Washington, D.C.

Just what this world needs...another chain optical? How exciting for everyone.

Quote:

---

Originally Posted by newguyaroundhere

So would VSP actually attempt to acquire Pearle directly from Luxottica, giving them that national brand presence that they have wanted and does Luxottica actually listen to any offers for Pearle

---

Off topic, but if I were Lux I wouldn't sell Pearle (or anything else) to VSP. VSP is their competitor for insurance and frames, why would they allow VSP to expand tho competition to retail? Lux should block VSP's expansion and simply outbid them on any retail purchases, and expand themselves in the process. Every VSP patient is locked in to the ecosystem and is someone definitely NOT going to any Lux outlet. They can't compete for those customers (except ahead of time by lobbying Eyemed instead of VSP to employers) so their expansion strategy coincides directly with eliminating VSP.

Sucks for all of us either way, but it's a fight I would like to see.

[QUOTE=DanLiv;524668]Off topic, but if I were Lux I wouldn't sell Pearle (or anything else) to VSP. VSP is their competitor for insurance and frames, why would they allow VSP to expand tho competition to retail? Lux should block VSP's expansion and simply outbid them on any retail purchases, and expand themselves in the process. Every VSP patient is locked in to the ecosystem and is someone definitely NOT going to any Lux outlet. They can't compete for those customers (except ahead of time by lobbying Eyemed instead of VSP to employers) so their expansion strategy coincides directly with eliminating VSP.]

I'm in a unique situation I guess, but I see vsp members coming to me for exams and taking Rxs to various places, including a Lenscrafters that is a couple of hundred yards from my office. These are people who will get less and pay more for what they can get from me under their plan, but still some do it. Some of them because of brand loyalty (I don't have any Lux products), some because of loyalty to LC itself. Some because some things can be done quicker there.

Where is Race to tell us all how great a deal this is for us all, and how we should be thankful VSP's too cheap to even use lube? ;)

I miss race. He always made me feel like I'm doing it all wrong.

Coming a little late to the party... but here's my $.02

We will not be doing anything with Marchon or Altair. I have not up to the point, and I will not start now. Everything that I have that is usually covered by VSP has that 20% disc, and everything that doesn't, the WFA is above the majority of the plans criteria. The avg loss is about $11/claim. While I could raise prices in an effort to collect that money, honestly our pricing is above industry avg on frames, and I am hoping this puts us a bit more in line.

I *hope* everyone isn't pushing for their independent distributors to give them that 20% disc, because what it will mean is the list price will rise, in an attempt to "play the game". List was $57, now it is $68. Essentially the same game some manufacturers have now, where they have high discounts to offset overinflated frame facts prices. It also makes it increasingly likely that in a few years, inflation will have set in, and people will perceive a higher need for these damn plans because of the higher frame costs. Don't get me wrong, I like discounts.. but if my net is the same, then don't play games.

As far as the comparison to Davis/Spectera... the difference is 1) Those companies supply the tower o' frames. 2) While you are to show those frames to patients first, they are not limited to only those frames. 3) We don't get penealized for selling them one of our frames compared to a Davis frame.

As for Pearle, those are franchises for the most part. Now could VSP be putting together a plan to go after it.. Maybe, but you can bet it wouldn't have the Pearle name. I see this more as a calculated dance as VSP is struggling to have that national chain presence that many employers are desiring, and Lux simply wanting to see more of their frames and make the $$$.

Quote:

---

Originally Posted by Bruce Malter

At the same time VSP launches a website to sell frames direct to patients. http://www.eyeconic.com/

Any ideas on how to let VSP know we all do not agree with their play, and push back?

---

Bruce...........nice and informative post.

However they already know, that all of you do not agree with their new system.

Why should they not, they are feeling the pinch already with the entrance of Lux and Essilor into the direct manufacturer, to end consumer internet sites.

All of them know about the power of internet sales and instant communication, now even at no cost on a worldwide basis.

I just talked to my oldest daughter this afternoon, who was in a suburban train in Bern, Switzerland going home, by calling a local Canadian number and it got transferred by a simple "Magic Jack" purchased here at a local WalMart. The transatlantic connection did not take longer than a local call.

All these large corporations have the funds to invest into research of technology versus human age, and can forecast the near to far away future of purchasing habits of an aging society.

It seems that they are all more and more, banking on the future of internet sales.

Quote:

---

Originally Posted by Uilleann

Where is Race to tell us all how great a deal this is for us all, and how we should be thankful VSP's too cheap to even use lube? ;)

---

:nerd:

My strategy is to put pressure on Marchon. When the rep comes in we are not going to replace any frames sold until VSP stops this nonsense. I only have 3 stores so I hope lots of others join me in this approach.

Quote:

---

Originally Posted by KennethB

My strategy is to put pressure on Marchon. When the rep comes in we are not going to replace any frames sold until VSP stops this nonsense. I only have 3 stores so I hope lots of others join me in this approach.

---

Reps in the frame business work mostly on a commission basis.

You can put some fear into them if you pay for his/her living cost to a large part.To boykott a business

If you would say the frame stock consists of 90% of their frames, but not replace any frames sold means probably nothing to them. Their company will just lower the price and you will buy again. Pressure tactics would only work in big numbers and you will not get them on OptiBoard as it is an incognito hiding place to express your opinion on anything that is permitted by the owners.

To boycott a business takes huge efforts and help, and to get that is not so easy.

VSP now has an official retail online website and they can afford it. The only ones that can stop them is by buying them up and continue them their own way.

VSP is apparently suspending that whole cutting reimbursement idea of theirs. I guess pressure from the government was a bit much to handle