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Dramatic spread in optometric fees continues
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Some of you may recall that I created a survey of optometrists’ fees in 2005, which was printed in the October 2005 issue of this publication (“Data show wide spread in ODs’ fees,” pages 14 and 15). The data were drawn from the collection of fee analyses that I had conducted in early 2005, in an attempt to glean information regarding eye doctors’ patterns of billing.
Analysis helps establish fees
The Fee Analysis was created by PMI, LLC in the mid-1990s to assist doctors and clinics in establishing appropriate fees for their services. The analysis is provided as a spreadsheet, accompanied by a cover letter to explain the findings. Among the columns that appear in the analysis are the codes and descriptions from Current Procedural Terminology for 51 services commonly provided by eye doctors, along with the Medicare Relative Value for each, from the current year and from the previous year.
The layout of the spreadsheet permits a doctor to enter her or his fees for the services and to then compare the fees for each service with the 50th percentile data from an MD fee survey and the current national average Medicare fees. Some doctors will supplement this information with local telephone inquiries of other eye care providers or data drawn from computerized programs such as AccuFee (www.AccuFee.com) or Reimbursement Plus (www.reimbursementplus.com).
The 2007 fee analysis
To create the survey reported here, I compiled data from 100 randomly selected PMI Fee Analyses conducted during 2007, to provide a comparison with the data from the 2005 survey. As always, the information must be presented as is, and I will make no attempt to interpret it, draw conclusions from it or make suggestions relative to it. The numbers are as they are. Please review the chart on page 14 and use the numbers as you see fit. Go to PCONSuperSite.com for an expanded version.
The process for choosing which analyses to include is random, with the fee schedules for the offices originally compiled on a large, horizontal spreadsheet. This permits calculations of “highest,” “lowest,” “average” and “median” for each of the services, as well as for the totals of the fees and for the conversion factors for all of the schedules.
Once the calculations are made, the individual schedules are purged from the spreadsheet, leaving only the summary data on the chart. As a bonus this year, the final spreadsheet includes the information from the 2005 survey for comparison.
What strikes me first in looking at the data for each service, similar to the 2005 survey, is the broad spread of fees for specific services. For example, for 92070 (fitting and dispensing a therapeutic contact lens) the highest reported fee in the 2007 survey was $180, the lowest was $10, the average about $83, and the median $70. In 2005 the range was even larger, with $700 as the highest, $15 as the lowest, $95 as the mean, and $75 as the median.
To provide more information for comparison, we also include the conversion factors for each Fee Analysis that we conduct and calculate their highest, lowest, average, and median conversion factor during the process. The conversion factor, CF, is derived from Medicare’s formula for creating its fees, where the fee for each service is the product of the relative value for that service (RVU, set by Medicare) multiplied by Medicare’s current conversion factor (CF, set by Congress): Fee = RVU x CF. This is the central formula used by Medicare since the 1992 introduction of its new system for creating fees, the Resource-Based Relative Value System (RBRVS).
A little math permits us to take the basic formula, Fee = RVU x CF, and solve for the conversion factor, CF = Fee / RVU. We simply total all the fees in each doctor’s schedule and divide the sum by the total number of RVUs for those services.
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Range of conversion factors
As you’ll see from the table, conversion factors swing as wildly as the contents of the schedules, with the highest in the 2007 survey being $79.64 (bottom, column 5), the lowest being $22.92 (bottom, column 6), and the average $45.45 (bottom, column 7). These compare to the national average Medicare conversion factor for 2008 of $38.09, with the average conversion factor from the 2007 survey 19.3% higher than Medicare. (Medicare 2007 conversion factor, $37.90.)
Comparing this information to a fee survey of MDs for these services, published in 2007, we learn that the conversion factor resulting from considering the 50th percentile fees from that survey is $61.27; 60.8% above Medicare’s 2008 conversion factor. It is also interesting to note that the average conversion factor across our survey 2007 ODs’ fee analyses is $45.45, a full $4.71 (11.6%) above the average from 2005.
In closing, it is interesting to note the wide differences in individual fees for each of the services, through the highest, lowest, average and median, from both the 2005 and 2007 data. The differences seem to be consistently striking through the entire list of services: the general ophthalmological services, the evaluation and management services, the special ophthalmological services, and even through the surgical services.
Anecdotally, these wide disparities among fees and fee schedules are not regional, in that we find similar ranges in the Fee Analyses every year, regardless from which part of the country the schedules are drawn from. As we have come to expect, doctors of optometry demonstrate their independence in setting their own fees, just as they do in choosing diagnostic tests and treatment/management modalities for their patients.
For more information:
- Charles B. Brownlow, OD, FAAO, is a member of the Primary Care Optometry News Editorial Board, executive vice president of the Wisconsin Optometric Association and a health care consultant. He can be reached at PMI, LLC, 321 W. Fulton St., PO Box 608, Waupaca, WI 54981; (715) 942-0410; fax: (715) 942-0412; e-mail: Brownlowod@aol.com.