The "new" VSP??

[Jana Lewis]

Okay...giggle, giggle....my first "real" post!!! Heh, heh, heh!

What is your opinion on the "new" VSP? After reviewing the materials sent to me by VSP, I realize that we must now offer an additional 20% off of frames. How will I ever make some sort of profit off of these patients?? They have now set the standard "cost" fee for the frame, with the additional 20% taken off it!Just seems like they are just nickel and dimeing us to death!

What can I do to atleast make the VSP glasses worth my while?

Your input is well appreciated!! :angry: (my first smilie!!!)

[Robert Wagner]

:o
I agree with you, what can we do?
I don't know what your mark-up is, but VSP has advised us to mark up 2.6x if you want to make the same "profit" as last year.
Also to get an extra 5% discount if you are to order your frame from eyefinity with VSP chosen venders you can also order frames only through eyefinity with that same 5%discount for your own inventory.

Good luck for we all will need it!
Robert:)

[paw]

Whatever else you decide to do, the first thing you should do is complain to VSP. They take note of the response of the VSP members. If there is little to no response to this hit, you can bet there will be more hits to come. All insurances squeeze until the victim hollers. We must all holler now.

[Johns]

We had a VSP rep walk us through a claim using the new system, and for some reason, it looks like we're coming out w/ more (??).
They said that we can now use the retail pricing or the wholesale frame allowance.

Example 45 / 130

The 45 would be the frame allowance, and the 130 would be the maximum retail.

Did we misunderstand it. We came up w/ the same # that they did. We worked another one out, called them up to double check, and it was the same story. What am I missing ?

(Please note that I don't handle the insurance, but when I saw the pkg come in, I had the ins. person review and check it against the old system. Since I don't handle the VSP, I'm not very well versed on how it works)

[paw]

Johns,

This is the way it works:

Take the price of the frame the patient chose:

Compare that price to the patient's retail frame allowance ($130, in your example).

Then compare wholesale price of the chosen frame to the patient's wholesale frame allowance ($45, in your example).

If the chosen frame's retail price is higher than the retail allowance, AND it's wholesale price is higher than the wholesale allowance, the patient pays an overage.
(The overage is: frame retail price minus retail frame allowance. Then, you must take 20% off the overage. That is what the patient will owe.)

If the chosen frame is lower than the allowance on either the wholesale or retail, the patient has no overage.

Hope this helps.

[Johns]

Paw:

Doesn't this mean that there will be different payouts for different offices, deciding on what their retail prices are?

[Jana Lewis]

Johns,

Yes, there are different payouts for different price structures. You will also notice that there are different payouts for different plans! It gets so darn confusing!!

I guess my big gripe is that how does VSP expect me to stay competitive if they are squeezing me dry? I guess the only way is to raise my percentage over frame cost to help offset that 20%.

I was just curious if any of you had a new game plan for the "new" regs.

[Johns]

I explained my game plan to the Charmant rep when he stopped in all smug with his new "partnership"manual from VSP.

He said, "If you buy a frame from us for $XX you'll get an added savings of $ for using the VSP network." I said "Show me all your frames that are priced for $YY (read:china)" He said he doesn't selll any in that price range, and I said, "The I don't PLAN on buying any of your frames for use w/ vsp."

VSP just wants more control over the true price we are paying for our products, so they can have more control over the profits we can make. The only way to survive is to "go underground"on how much we pay. Of course, they will try to squeeze the non-traditional frames out of the picture as well, but I don't think theý'll be able to completely.

Note: I just heard that one of the larger OD practices on the Ohio/Pa border just stopped taking VSP altogether. Good for them! Someday, I hope I'll have the guts to do the same.

[Steve Machol]

It occurs to me that VSP could help themselves immensely by sponsoring their own forum on OptiBoard to answer questions like this and to provide support. :)

[Jana Lewis]

Johns,

I have refused for the longest time to carry the Altair line, I know that it is supposed to help our "bottom line" but....I just can't carry that crud. I find it cheap and very ugly.

So...what to do next? I wish we could drop VSP too...It drives me insane!!!

And yes Steve...it would be nice if there was a Q & A forum for VSP, maybe then they could try to understand just how frustrated the providers really are!! :o

[paw]

Johns said:

"Paw:
Doesn't this mean that there will be different payouts for different offices, deciding on what their retail prices are?"

Jana said:

"Yes, there are different payouts for different price structures. You will also notice that there are different payouts for different plans! It gets so darn confusing!!"

Jana is right, there are different payouts for different offices, depending on what their retail prices are.
And, as Jana said, it can be confusing because different VSP groups have different allowances and co-pays.

It is imperative that you obtain the patient's authorization (easiest done over the internet) and print out the authorization sheet which tells you what the allowances and co-pays are for that patient. Once you have that info, it's not too difficult to figure overages.

Jana also said:

"I guess my big gripe is that how does VSP expect me to stay competitive if they are squeezing me dry? I guess the only way is to raise my percentage over frame cost to help offset that 20%."

That's exactly our gripe, too. We've already made our feelings known to VSP. I hope you do too.

[paw]

Jana,

I was reviewing our VSP Explanation of Benefits and discovered something that has made me livid.

Before the change to the new way, between the VSP reimbursement and the patient's frame overage, we were always reimbursed the cost of the frame, and even made a profit if the frame price was high enough.

Well, today I discovered an instance where the VSP reimbursement plus the patient's frame overage came to $38 and the wholesale frame cost was $40. We actually lost $2 on the frame.

I was so upset I called VSP immediately. The rep verified yes, it looks like we lost $2. I asked him if VSP knew that this change would cause doctors to lose money. He said they found that in very few instances some would lose money. He countered that the average doctor sees an increase from this new way. I asked him to explain how anyone can see an increase when the frame allowances have increased (making it harder to sell a frame with an overage), and having to take 20% off any overage that does occur. He could only repeat that the average doctor makes more money. What BS. I can't believe they would even implement a plan that would cause a doctor to lose money off his cost. I am so upset !!!!!!!!

Anyone who takes VSP must complain to them !!!

[Jackie L]

I spoke with a VSP rep the other day and they can not dictate the mark up we use. Who is to say that we can't mark up frames more than 2.6? We can. If the frame retails for $150 and the plan allows for $145, we charge the P the difference less 20% ($4) and VSP pays us back for the predetermined wholesale price.

[Robert Wagner]

It seems to me that if a frame mark-up is anything less than 2.6% there is a "chance" that you may not get reimbursed the VSP pre-determined wholesale price (I believe that is according to the listed wholesale price in the FRAMES DATA INC. book)

It is too bad for all of the "cash" paying patients, for if you had to raise your mark-up on all frames to what VSP is "suggesting" your loyal cash paying patients are paying more for an insurance's plan for it's self:shiner:



Robert

[Texas Ranger]

It is such refreshing conversations as these that make me so very thankful that as an independent optician, VSP prevents me from all those great profession/business opportunities. I do see many vsp pts who have reimbursible plans, that I can say a great deal of money, since I don';t have to mark up 2.6 times. they are all likely to get glasses that cost their limit or more. and many of the plans are similar. lady was in the other day, a Cole vision deal, my $92 Nine West frame was $229 at Pearle, they discounted it $52. so her "benefit" was goint to cost her an $177, or $85 more than coming to us, and that didn't count the lens savings. So, what about all those regular folks who come in, that don't have the gift of a vision care benefit? they get to pay the regular, inflated for vsp prices, don't they, and that helps you in what way? and all that paper work, we don't have to do it at all, amazing....I am sure that if you were dealing with intelligent patients, they'd figure out that their glasses cost them more, not less, if you add the premium fees that they pay for this benefit?

[paw]

That is the thing that is so frustrating. Our frame mark-up is less than the "average", according to VSP. (We try very hard to be competitive (i.e. keep frame price down) because we do want to appeal to the self-pay patient.) Therefore, we get penalized when a VSP patient picks a frame that is less than or equal to the retail frame allowance (so there is no overage to collect) but the wholesale frame price is higher than the wholesale frame allowance. We get reimbursed the wholesale frame allowance. So in the above example we get burned by the difference between the wholesale frame price and the wholesale frame allowance. A small difference, true, but it will add up over time since we have a significant number of VSP patients.

If we implement an increase in frame mark-up that will prevent that situation from occuring, then our prices seem high to the self-pays and they could go elsewhere. And we end up with an even higher percentage of our practice being VSP. Aaarrrgh!

We are the ones trying to keep prices down, and VSP is actually causing our prices to go up. That's so convoluted.

[DrKLP]

paw said:
We are the ones trying to keep prices down, and VSP is actually causing our prices to go up. That's so convoluted.

That's what is so ironic about plans like VSP. Due to the pricing structure you're forced to adopt, you attract the worst, least loyal, most complaint prone patients on the one hand. And, on the other hand, you penalize and gradually exclude the best, and usually easiest to please, self-pay patients. Actually, if you really think about it, all health insurance is like that. The providers are generally dissatisfied, the patients are often confused & dissatisfied, and the only ones to achieve any real level of gratification & control are the insurance companies. And, the only reason they're in total control is because federal anti-trust laws prohibit any type of organized resistance on the part of the providers--that would be considered conspiracy to commit a criminal activity (i.e. price fixing). However, insurors can organize, conspire, collude, threaten, sanction, dissemble, prevaricate, obfuscate and do just about anything they dam well please to further their ends--they call that free enterprise.

[paw]

DrKLP, Bravo, bravo, hear, hear !!!!

The gov't doesn't seem to mind collusion as long as the collusion drives prices down.

[Joann Raytar]

For those of you who mentioned concern over whether to keep certain plans or to get off the panels here is a quote from another thread that might be of some interest:

Pete Hanlin said:
Regarding VSP... My office no longer accepts it. When you do the math, when you see a VSP patient, you are basically discounting services and products about 30% after you allow for the fact that the work is done outside. Unless your profit margin is a lot better than mine, this leaves you with very slim margins on VSP patients.

We cut the plan 2 years ago. What did we find? Well, about 1/3 of our patients kept coming to us anyway (electing to drop their VSP coverage when it was time to renew). Of course, we sent all of our VSP patients a letter explaining why we were dropping the plan, so they were prepared. We are making about the same profit on the 1/3 that stayed as we did for the entire group under VSP.

Okay, the "forgetfulness" issue. During a VSP sponsored informational seminar three years ago, the lady kept saying "the patient is responsible for informing you they have VSP." After hearing this about 10 times, I asked "But when the patient remembers they have VSP after we've already made the glasses, you tell the patient we can back date the claim and still file their insurance."

There were echos of "yeah, that happens to us too" all over the room. The now uncomfortable lady said that, yes, VSP does have a policy of telling patients that providers can backdate claims- but that she personally didn't think this was a good policy. Basically, VSP makes the doctor look like the bad guy in any dispute...

What should YOU do about VSP? Don't accept it. If your doctor wonders if you can really "afford" to drop the plan, give him/her my email address, and I'll show them the numbers from our practice.

Pete "now if VSP would only find it in their hearts to drop us from all their provider lists..." Hanlin[B]http://www.optiboard.com/forums/show...&highlight=VSP

Note: This was from back when Pete was managing an OD practice.

[Johns]

Nobody says you have to use a "formula" mark-up when figuring VSPdo they?
Why can't you add (purely hypothetical amount) $200 to all wholesale costs, and then give a $120 discount to non-insurance customers. I don't see why there shouldn't be an "administrative fee" for taking care of the paperwork. VSP charges one don't they? Out of 4500 frames in our inventory, not one has a price tag on it.

I took the new rules, based on retail as a sign VSP wsa going to let us make more. We have so far.

I guess I still don't get this...

[DrKLP]

paw said:
DrKLP, Bravo, bravo, hear, hear !!!!

The gov't doesn't seem to mind collusion as long as the collusion drives prices down.

That's just the point. It doesn't drive prices down--it drives profits down! Ultimately price levels have to be maintained or increased just to offset the deep discounts demanded by the insurors. That is, unless you want to work twice as hard or you've discovered a way to cut your expenses dramatically. And, who bears the burden of this cost shifting? Those very individuals who don't get the deep discounts--BTW, I hear they're on the endangered species list. Subsequently, as your discount patient base gets larger and larger, your "usual & customary" charges are forced higher and higher. Its kind of ironic, one could be so successful at attracting these insured patients that you're eventually forced out of business. However, insurance companies will post record profits. In fact, Tennessee's new governor's claim-to-fame is that he made $27,000,000.00 in the health insurance business. Since the investment side the insurance industry has been very depressed due to the falling financial markets, those profits can only come from doctors, hospitals, and other providers who were underpaid or not paid at all, patients who were denied needed care, or premiums that were grossly inflated. I couldn't believe it, with this feather in his cap, he was awarded the highest office in the state! As providers, and patients, we simply cannot afford to let the insurance industry continue to suck this magnitude of vital resources from an already strained system. IMHO.

[paw]

DrKLP,

Right you are! The money going into health care is not going down, it's being shifted from the Drs to the insurers. Being an insurance executive is much more lucrative than being even a high-priced surgeon. This is a perverse turn of events in our health care system.

Have you been on Seniordoc.org. They would love to hear your comments.

[Texas Ranger]

This is a simple profession (if you don't consider all of the skill and knowledge involved). Managing a business of any type has some real challenges, regardless of the product/services offered for compensation, including services such as refracting and eye exams than have no "product". Our businesses all require a location, which has overhead, regardless of whether anything is sold. there are some basic relationships, you perform an eye exam for a patient, under the condition that you be paid $X for that service; same is true for the eyewear. $X for a frame(prices vary greatly), $x for the rx lenses (designs and prices vary greatly). new technologies have made available many great advancements in both. Now in the process of filling an Rx, you and the client agree upon the $$ to be paid for a custom made set of eyewear. no where in this transaction is an insurance company. Now, the client's employer hires an insurance co. to "manage" your relationship with your client. now the client has the "option" to decline coverage, but they are led to believe that this process is saving them money, and they never miss the pittance taken monthly from their paycheck. But now you/we have this ins. co. taking their little cut out of our margin too; they get premium money from our client and they come negotiating with our professions to give them our profits. the FEAR is that our client will go somewhere else. so where will our client go when they tire of dealing with incompetent providers, providers who don't care to give their best to clients who they lose money serving, look, those clients are getting burned just as bad as we are. So, if you're providing services that you're not making money on, you're just part of the scam on your clients. look, the average pt spends about $125 a year on eyecare, if that much, so they pay a premium to the ins. co. that about that much or more, then they have to pay extra, at inflated prices for services they could have paid for with their premium money. So, look in the mirror and ask yourself why you're part of their scheme, and wouldn't you just be better off without the VSP's of the world? be honest now!

[paw]

Texas Ranger,

That's a good synopsis of how insurance has wormed it's way into the eyecare profession, however, you have a couple of incorrect assumptions:

You said, "so where will our client go when they tire of dealing with incompetent providers, providers who don't care to give their best to clients who they lose money serving, look, those clients are getting burned just as bad as we are."

1. I beg your pardon, but we are not imcompetent, and we DO give our best to our patients regardless of whether they are VSP or self-pay.

2. I should clarify my previous posts to say that although we are now losing a few dollars on FRAME reimbursement for some VSP patients, we are not losing money on the patient as a whole. That is because in addition to the frame reimbursement, the provider receives a frame dispensing fee, a lens dispensing fee, and part of the overage on lens options. VSP may think its acceptable to knock frame reimbursement below cost as long as the provider makes a profit overall, but I don't.

The thing that really gets me mad is that they insist that most providers are making more from this change. I challenge any provider to show me actual numbers that prove he has made more per patient with the new way than with the old way. If VSP admitted, yes we are squeezing you, I think I could actually accept that as part of the evil of insurance. Just don't squeeze me and call it a hug.

[Joann Raytar]

paw said:
Texas Ranger,

That's a good synopsis of how insurance has wormed it's way into the eyecare profession, however, you have a couple of incorrect assumptions:

You said, "so where will our client go when they tire of dealing with incompetent providers, providers who don't care to give their best to clients who they lose money serving, look, those clients are getting burned just as bad as we are."

1. I beg your pardon, but we are not imcompetent, and we DO give our best to our patients regardless of whether they are VSP or self-pay.

With respect to Texas Ranger's post I admit we had to have a discussion on VSP patients and frame choices. Although it was a short lived discussion, it was a serious scenario. The only way to benefit from accepting VSP is to sell members very low priced frames, discontinued frames, overstock frames bought at a discount that cost us less than the listed wholesale cost or very expensive frames with a high overage. Selling midrange frames isn't beneficial to providers.

Even with VSP, we decided frames that are going to break or won't be warranteed aren't worth bothering with. We also decided if a patient likes a midrange frame that fits well they should be able to get one. I am sure there are providers out there that have decided to sell only low end frames to insured patients. I would just question the integrity of the methods they use to do this.

I have also seen practices so heavy in discounted insurance plans that the only way to turn a profit is by controlling payroll. You won't get good employees by paying them less than the going rate. So you hire based on payroll savings rather than skill and work ethic.

The nice part about all of this is the fact the OptiBoarders appear to take their sense of integrity and ethics seriously or we wouldn't be having this discussion. It's good to know that there are others out there who haven't entirely given into the system yet.