What’s in the Cards?

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NEW YORK—Dramatic changes were already impacting managed vision care plans and providers even for the few years before the Affordable Care Act (ACA). Then along came this sweeping legislation to alter the health insurance landscape even more. Among these changes were health care costs continuing their upward climb and employers rethinking how they’ll contribute to their employees’ health insurance coverage. In addition, vision care, despite its growth, is often still considered an ancillary benefit. Add to that the most influential health care legislation since Medicaid and Medicare were introduced nearly half a century ago, and eyecare providers are attempting to maintain their footing in the wake of this disorienting one-two (three-four) punch.

Managed vision care executives were already in the throes of launching new plans, forging partnerships and implementing contractual changes. At the same time, providers on their panels were doing their best to navigate these changes while also serving their patients’ eyecare needs and maintaining the profitability of their businesses. Standing firmly upon this changing landscape is challenging to ODs, particularly while the ACA complicates things further with the promise of more patients yet lower reimbursements.

It’s clear that the rules are changing for optometrists, for managed vision care plans, and for everyone involved in health care. They’re changing as a result of the impending full implementation of the Affordable Care Act, and they’re changing due to other influences already in play. What isn’t clear is how these changes will impact vision care?

The managed vision care executives and eyecare professionals that Vision Monday interviewed for this article shared their thoughts on the change agents already having an impact as well as their projections for what’s in store as a result of the ACA.

“This used to be a straightforward, predictable, stable marketplace with respect to how employers looked at vision care benefits. The ACA turned that upside down, causing all those elements of the marketplace—employers, employees, consultants, brokers—to reconsider what they should do with respect to employee benefits,” said Rick Corbett, CEO of managed vision care company Superior Vision.

Ramp Up to ‘Retailization’
“These are exciting times, there’s no question about that,” said Celina Burns, president of Davis Vision. “We’re seeing the ‘retailization’ of health care with the whole landscape moving toward consumerism,” she told Vision Monday, referring to the fact that in some cases the insured are being given much more personal choice in the selection of their health insurance coverage. “In the larger group space, we’re already seeing movement toward giving employees an allowance to go to a private exchange. It’s the same dynamic we saw play out in pensions 30 years ago with the movement to 401ks.”

   


Ultimately, the consensus among industry leaders about the changes in store for providers points toward more patients overall, albeit fewer private payers and more third party patients.

Jim Greenwood, president and CEO of Vision Source, views an aging population among the reasons for an expected increase in patients, but at the same time he sees a “need to do things differently” as care shifts from independent to group practices. “Factors in health care impacting optometry include an unhealthy and aging population with 51 million people on Medicare and 10,000 a day aging in,” he told Vision Monday. “Medicare Advantage is gaining traction,” he added. At the same time, “innovative groups are forming, motivated to deliver excellent care,” he said.

Bob Stein, chief professional development officer, National Vision, predicts an increasing number of patients for similar reasons: “I believe that over a period of years the top line for managed vision care will be positively impacted, but the mix of where that comes from may be very different. The exchanges (public and private) will grow membership, Medicare will increase simply as a function of our aging population, accountable care organizations will grow in popularity, and medical insurers will add more of their non-pediatric members to vision care plans.”

“With a whole segment of the population that wasn’t insured that will be insured, ECPs are going to be seeing more people as a consequence of more people being covered,” said Corbett.

“We expect that the popularity of vision care plans will continue to expand in all sectors with significant growth in membership,” agreed Mike Schell, vice president, sales, MESVision.

Jim McGrann, president of VSP Vision Care, is focusing on “strategic areas to increase patient flow into doctors’ offices,” he said. He told Vision Monday that these include the Premier Plan to address the “changing retail landscape” and signing up 85 more health plans to provide pediatric vision care as an essential health benefit.

In addition, those who predict more patients walking through optometrists’ doors expect it to be gradual rather than immediate, with a slow start in 2014 ramping up to a boom in 2015.

Philip Kaufman, CEO, UnitedHealthcare Vision, told Vision Monday, “Vision coverage for pediatrics will certainly expand due to the inclusion of this benefit as part of the 10 essential health benefits outlined by the ACA,” he said. “For eyecare providers, the number of new pediatric patients seen will likely go through a gradual increase, with a slow influx of consumers at the start of 2014 but gaining momentum into 2015.”

Celina Burns, president of Davis Vision, corroborated his opinion, stating that “2015 will be more the watershed year for growth.”

   


“Essential health benefits will provide access to additional members, which is always a positive change,” said Vincent Hayes, vice president, managed care, Nationwide Vision, “but we’re not anticipating significant changes.”

Some managed vision care companies are taking steps toward bringing in more patients. “We are ready for a full nationwide launch of EyePrefer, our new product that empowers members to choose from two to three benefit designs,” said Greg Hare, EyeMed’s vice president of provider relations, referring to the company’s new plan offering three levels of coverage.

Reduced Reimbursements
Whatever their predictions for the number of patients after the full implementation of the Affordable Care Act, most executives VM interviewed agreed that average reimbursements from third party payers will continue to decline. This belt tightening is expected to occur at all levels of health care, from the government to managed vision care companies and, ultimately, including providers and patients as well. “There will be continuing downward pressure on reimbursements that will call for improved efficiency in all segments of the delivery system,” said Stein, referring to the fact that managed vision care companies as well as optometrists and optical retailers will all have to remain budget conscious in the face of reduced reimbursements.

“The ACA is a coverage bill that will reduce reimbursement to everyone, insurance companies and providers,” agreed Andrew Alcorn, president and CEO of Block Vision.

“In some cases, insurance companies may issue separate contracts to health care practitioners for their new exchange-based plans, some of which will likely include lower reimbursement rates,” confirmed Stephen Montaquila, OD, chair of the AOA’s Third Party Center Executive Committee

Budget conscious government programs such as Medicare and Medicaid will also result in reduced reimbursements. “State governments responsible for Medicaid expenses are trying to reduce expenses,” said Richard Sanchez, CEO/president of Advantica.

According to a Review of Optometric Business report on “Challenges and Opportunities in the Future of Independent Optometry” sponsored by Vision Source, “In 2012, 13 million Medicare beneficiaries, or 27 percent of total beneficiaries, were enrolled in Medicare Advantage programs, providing a supplement to their government-funded Medicare coverage. Enrollment is increasing 10 percent annually. These programs are run by large insurers that vigorously seek to contain costs to maintain profitability.”

 


Ultimately, all parties involved are in this together. “Preparing for the impacts starting in 2014 has been an enormous undertaking, and the implementation of health care reform will require health care companies and providers to work together to make the effort successful,” said UnitedHealthcare Vision’s Kaufman. “All market participants will need to become more innovative, efficient and consumer-focused, which will help improve outcomes, more effectively manage costs, and drive higher member satisfaction with vision benefits.”

However, until open enrollment ends and coverage begins in 2014, we can’t be sure how things will change. “We don’t really know how many people will buy vision off the exchange,” said Myles Lewis, CEO of General Vision Services, confirming the consensus that until it actually happens we can’t be sure what will happen to managed vision care as a result of the full implementation of the Affordable Care Act. This sweeping legislation, combined with the forces already in play, will simply add more obstacles for eyecare professionals to navigate in the managed vision care landscape. ■

jsailer@jobson.com