The growth of Third Party Administrators (TPAs) in the hearing aid reimbursement process has brought new challenges to hearing healthcare. These programs are being offered by traditional commercial payers and their subsidiaries. Many of us are threatened with losing significant numbers of patients unless we agree to participate. Should we or shouldn’t we?
When considering this dilemma, it comes to mind that the only way to know for sure is to have a good handle on the status of the business. I have preached the need for tracking for years and it’s more necessary than ever in these tenuous times. We may all think we know how much our businesses could be affected by these TPAs but we really don’t know for sure unless we have the numbers to back up those feelings. The consequences of saying “Yes” or “No” could impact the business forever.
In order to make informed decisions, it’s necessary to calculate the break-even hourly rate for the practice and this rate should include desired profitability. This will determine how much revenue needs to be generated each and every hour for the business to break even. A business can’t stay alive if reimbursement isn’t equal to or greater than the break-even hourly rate. If we accept reimbursement that is lower than the break-even point, we will find ourselves working harder for the same or less money. That doesn’t seem like much fun to me! In my life, being busy isn’t better unless it’s producing greater profitability for the business.
Understand the type of contract you are signing. Is it discounted fee-for-service? Can you afford to provide the mandated services for the agreed reimbursement? Definitely, clarify covered and non-covered services and products and whether the payer allows for upgrades beyond covered services, as one’s ability to upgrade beyond the covered service amount can be key for acceptable reimbursement, especially for those who dispense hearing aids.
Make sure to check the terms for reimbursement. It is not uncommon for third-party payer contracts to limit billing for reimbursement to 45-60 days post service. You have to make certain that you have the cash flow to cover delayed reimbursement if you are used to getting paid up when services are rendered.
If you have an existing business, perhaps the answer to the question of participating with TPAs is not in participating but rather in doing a better job and staying more connected with current patients and making more opportunities for them to hear better.
So, what’s the right answer to participating with TPAs?? Only you can determine what is right for your business, but the only real way to make the right decision is to know your numbers!