Vision Equipment-600X120-Above Article-Equipment Source

It’s always been important for me to use the voice I have through this community to share opinions, concerns and insights regarding changes announced by industry partners, especially when they will have an impact on our ability to provide the best patient care and run our businesses independently. This is my opinion and analysis of how the recent changes announced by VSP are likely to impact your practice. Based on the recent spate of threads on the topic and the comments it appears that many either aren’t paying attention or don’t understand the full impact these changes will have on your bottom line this fall. I don’t want you blindsided, especially with all the other challenges we face during these unprecedented times. Below I have outlined an easy-to-understand timeline of the changes in VSPs reimbursement structure. I want to ensure every OD has a clear snapshot of what’s to occur so you can be better prepared for the impact it will have on patient care and revenue.

As of September 1, 2020, a practice that would prescribe a Varilux lens with Crizal and Transitions for their VSP patient would receive a +/- 50% reduction in reimbursement on these products compared to 2019. It may be a bit less or even a bit more based on the lens material selected as there are additional changes in reimbursement for VSP Choice with certain materials (see chart below).

While Hoya and Zeiss are considered preferred PALS/DSV (Digital Single Vision), there is still a risk of a roughly 50% reduction in reimbursements on the coating or photochromic you choose for your patient. The ONLY preferred AR is Techshield AB and the ONLY preferred Photochormics are Sunsync Elite/Elite XT which have not been reduced relative to 2019. Transitions are NOT preferred and may be subject to the 50% reduction in reimbursement if you choose them for your patient in combination with the Hoya or Zeiss product.

How can you maintain your 2019 reimbursements? By using VSP preferred products for all three. However, you could still see a reduction from your 2019 reimbursements even on these jobs with VSP Choice, depending on the material that was prescribed due to the new fixed member co-pays. Today providers can collect 80% of U&C for Hi Index, Trivex, Polarized, and Digital Single Vision lenses.

VSP has removed the VSP lab requirement for choice states, meaning the lab work can go to other VSP approved labs in choice states. But I still have grave concerns about overall lab manufacturing capability with the new VSP Preferred Coating for example. You may be able to place the order through your local VSP authorized lab, however; that lab must outsource to a lab authorized to produce this coating. The impact on turn times may prove to be catastrophic. As of now, only VSP can manufacture the coating. Maybe we will see additional labs approved to manufacture in the future.

April 1

♦Photochromic reimbursement changes: Only Sunsync Elite and Sunsync Elite XT are preferred photochromics. All other photochromic lenses receive approximately 50% reduction in reimbursements. This means Essilor, Hoya and Zeiss products photochromics.

June 1

♦Lab routing changes allowing VSP choice states (California, Washington, Oregon, Ohio, Florida) and FEDVIP work to go to labs other than VSP.

September 1

♦Preferred and non-preferred reimbursement changes. Non-preferred products receive  +/-50% reduction in doctor reimbursement. This impacts Pal/DSV, and AR changes new for 9/1. Photochromic changes occurred 4/1.

PAL/DSV

AR Coating

Photochromic

VSP

Preferred

Preferred

Preferred

Hoya

Preferred

Non-Preferred

Non-Preferred

Zeiss

Preferred

Non-Preferred

Non-Preferred

Essilor

Non-Preferred

Non-Preferred

Non-Preferred

 

♦Guaranteed member pricing changes for VSP Choice work on Polarized, Trivex, 1.67, 1.74, Digital Aspheric lenses (DSV). Doctors no longer collect based off U&C and this could significantly reduce reimbursements on all of the categories on all products, including VSP’s. So ECPs that go all-in with VSP still face potential reductions depending on the lens material prescribed.

If I just do a “back of the napkin” calculation this is what is seen. A practice in 2019 doing 40% of their optical with VSP patients, prescribing all Non-preferred PALS/DSV, AR and Photochromics in premium lens materials would face a +/- 20% reduction in optical revenue compared to 2019.

I figure the community can sort out any questions this brings up so I’ll be observing the comments, responding to only those questions I am able to answer. Thanks for using the sharing buttons to make this viral for all colleague’s benefits.

Alan Glazier
Proud founder of a private practice in the Maryland suburbs of Washington DC. and I founded this small online community called "ODs on Facebook". I like to connect people.

2 COMMENTS

  1. What we are seeing, obviously, is a battle almighty between EssilorLuxottica and VSP for product market share and profitability. This battle has moved optical goods profits even farther from practitioners to these manufacturers. VSP has been especially clever in creating an environment where OD’s believe they cannot exist without them, leaving practitioners powerless to respond. Practitioners have become the pawns of the big manufacturers, and it will only get worse.

    How did this happen? First and foremost, the AOA is a toothless tiger that has never done anything important to help practitioners remain a real profit center with regard to products. The AOA has wasted time sword rattling about cosmetic contact lenses and fighting the unwinnable battle to restrict internet selling of contact lenses.

    Optometry in general had not done itself a lot of favors either — with far too much emphasis on medical optometry. Optometry should have worked a lot harder to keep manufacturers from controlling product all the way to the wearer. By the way, I continue to predict the emphasis on medical optometry will eventually result in regulations which will enable consumers to purchase an Rx without a comprehensive eye exam.

    What can be done about this? i suggest the only realistic thing optometry can do is to stop accepting the vision plans and go 100% private pay. This will take some real bravery, but it is the only action that is going to work. How can you retain the VSP customers? Construct product plans that replace VSP products and at attractive self pay prices. If you work at it, you can knock the socks off what you are currently paying for frames and lenses.

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