Third-Party-Payer Networks — Deciding the Right Mix of Payers for Your Practice
The business of insurance has made headlines recently, and for good reason. As more insurance plans take on third-party-payer networks and more baby boomers come into retirement age, the number of private-pay patients may decrease. It’s important to stay informed and make wise decisions to ensure your practice is operating efficiently. We spoke with Audigy billing and coding expert Deb Abel, Au.D., to find out more about third-party-payer networks and what hearing care providers can expect from these types of hearing aid plans.
“It’s going to be very individualized for a practice to decide whether they’re willing to accept that kind of payment.” —Deb Abel, Au.D.
Identifying Third-Party-Payer Networks and the Role They Play for Hearing Care Providers
Third-party-payer networks are companies that contract with the major insurance companies, like BlueCross BlueShield, and some of the Medicare Advantage plans to provide hearing aid-related services to their subscribers. The biggest reason to contract with a company like TruHearing, Nations Hearing, or Amplifon is that you will have greater access to patients you might not otherwise have seen. Patients with an insurance benefit through these companies will be restricted to the companies’ contracted hearing care providers for buying hearing aids.
Calculating the Benefits of Contracting Through a Third-Party-Payer Network
Abel recommends that providers know what their hourly rate is and what kind of patient mix (insurance vs. private pay) they need in order to make it work. Consider the time you will spend with each referral and how you will be reimbursed for that time. For example, with TruHearing you have a requirement of three visits, which includes a fitting and two follow-ups. After that you can bill for additional visits, up to a maximum amount per the network’s rules. Consider what the patient is going to get with a three-year warranty plan for loss, damage, and repairs. You need to know what to charge for the service in order to be paid appropriately for the time spent with the patient. If it’s limited like some of these plans are, then you have to look at whether you can sustain it.
It also depends on the demographics in an area. If a major employer has contracted with any of those plans, that may be the only way to see those patients. Consider the pros and cons of that type of situation: Even though your fitting fee is reduced, you don’t have to spend on marketing to attract these patients. They are called by the payer directly to your office. Since the aid is ordered and paid for by the network, there is no cost of goods for the practice in advance. Payments arrive fairly quickly after the trial period is over, often in just a few weeks, which is typically much faster than you’d experience on a fee schedule with another type of patient.
The challenge in deciding whether this type of network is right for your practice is finding that right mix between private pay and third-party-payer network. Do you have new providers with additional time? Are you experiencing tough competition in your area and need to fill some spots? If you have time in your schedule where you’re not generating any income, this type of program may help you move your business in the right direction.
Insurance Reimbursements vs. Private Pay
When it comes to payments through this form of referral network, the reimbursements will be a lot less than they would be for a private-pay patient. They may receive anywhere from $325 to $750 per ear for the fitting. This is why it’s important for each practice to decide for itself whether it can afford to accept that type of patient. There may be an additional form of income in the way of a co-payment, depending on the type of service and level of technology the patient chooses. Those are the details to consider in advance of signing a contract with a third-party-payer network.
With the example of TruHearing — where you have a requirement of three visits, including a fitting and two follow-ups — you can bill for every single visit after the three required, and they have an amount allowed for that, which you can’t go past. That allows you to see that patient. If you want to create a service package, they have a new caveat to that this year: You can only provide a service package to the patient at $250 per year, which is not likely to cover many visits, if you do the math. If you’re charging $65 for every visit, and you’re going to give them a $250 warranty service package for a year, you’re probably better off having the patient pay $65 for every visit.
Choosing the Right Third-Party-Payer Network for Your Practice
When you’re ready to start researching the networks in your area, you can contact them to receive a provider manual and a fee schedule. This will also tell you what terms are in the contract, including requirements of accepting patients and the time frame between when they call and when the patient comes in. One of the first questions to ask is how many potential patients your practice could take in. The network should be able to give you an idea of how many patients will be referred to you on a regular basis based on the demographics of that area. For example, TruHearing has a lot of Medicare Advantage plans, so if you’re living in an area where there are a lot of Medicare beneficiaries, that may be a plan with a lot of potential appointments. Again, it goes back to the demographics: Who is in your area? Is there a major manufacturer? Is there a large Medicare population? Is it going to make sense for your practice to include these?
Provider Choice of Technology
It’s important to note that when working with these third-party-payer networks, you are relegated to using the manufacturers of that contract. After seeing a patient, the provider submits their recommendation to the network. They then order the aid and send it to your practice to fit it with the patient. However, while some networks contract with large manufacturers, like Starkey and Oticon, the provider may have less choice based on the certain devices that they have allotted for these types of plans. Some of them have private label; maybe you have a choice with the TruHearing Select program, for example. After discussing this with the patient, you choose which one is appropriate, and they cover a co-pay for that device, which can be up to $900. Then you get the payment from TruHearing for whatever that device was, which, in this case, would be $400 per ear.
Future of Third-Party-Payer Networks
“These plans are really here to stay,” says Abel. “I think they’re going to increase because of the number of Medicare Advantage plans that are out there, in addition to the number of baby boomers who are going to be subscribing to those kinds of plans.” Of course, there will always be private-pay patients, as not everyone will have access to a network like this. But it’s important to consider how the health care field is evolving, and how that ultimately affects the hearing care space. Maintain a good mix of your payers versus your private pay so that it’s balanced, and you’ll ensure your practice is thriving in the future.