We had been debating the wisdom of continuing to accept VSP for years. VSP was about 33% of our volume, but was about 66% of our problems with billing. It took twice as long to process orders, as they had to be entered into our PM software as well as into their dedicated website. We had to develop a special worksheet to reconcile the discrepancies between our usual and customary prices and VSP reimbursement. Our business office would tear their hair out every time they got a check from VSP as they had to write off thousands of dollars a month. Patients would call after they got a bill for their glasses – “I think I might have insurance” that always turned out to be VSP. While I had never run any hard numbers, it seemed pretty apparent to me that the staff-hours required processing and fixing VSP billings combined with reimbursement that was less than Medicaid meant that we were ultimately losing money on every transaction.
Nonetheless, fear of the unknown is an incredible deterrent to making obvious, positive changes. And sometimes change is thrust upon us. So it happened that on July 1, 2010, VSP declined to continue our contract with them due to a merger, and we got to experience a cold-turkey withdrawal from VSP firsthand. And just to add to the excitement, we started feeling major impacts from the deep recession at the same time.
So, nine months later, what’s the verdict? What did we learn? First off, the stress in the office decreased measurably as we no longer had to deal with the issues inherent with processing VSP orders. We identified the majority of our VSP patients, and sent letters to them explaining the situation. As expected,
1) virtually all patients will follow their insurance, and
2) we are still getting calls from patients who have VSP.
Business-wise, our Third-Next Appointment is exceptionally healthy, so we have had no problems filling the empty slots. The double-whammy of the recession and loss of VSP had a much more significant impact on eye glass sales, which have fluctuated wildly between near-normal and oh-no. We have found that many patients are seeking out very low cost big-box providers to fill their Rx’s, so we are working with our lab to provide products that will allow us to retain our patients; hopefully they will be able to upgrade their eye glass purchases when the economy improves. We are also experimenting with Social Media Marketing, and looking at some other ideas for communicating the products, services and value we provide.
Due to the convergence of the recession with losing VSP, and an entirely new accounting system, it’s impossible to say with certainty which had the greatest impact on our bottom line. However, it appears that filling our provider slots with higher reimbursing payers is offsetting current lower hardware sales. All-in-all, now that a noticeable economic recovery is starting to make itself felt, we will end up with a healthier, more profitable and less stressful practice by not having to deal with VSP.
If YOUR practice is considering dropping VSP, I am here to attest to the fact that there IS life after VSP. Best of luck to you!