INSURANCE … JUST READING that word makes you angry, doesn’t it? The deep discounts and insulting reimbursements make the blood pressure spike just thinking about it. Add in the often poor quality from their labs and slow turnaround times and it’s enough to make anyone want to throw their hands up and walk away. Yet there is a way to keep the insurance clients, make a profit, and keep them happy.
Before we get into it, remember to check your state laws, because this advice is 100% legal in some places and others not so much, and we want to keep everything above board. Insurance companies don’t joke with their money, and we want to deal with their audits as little as possible.
Right then, let’s take the dive! If your state allows you to opt out of the insurance labs, do it. I mean yesterday. Stop reading this and do it now. Wait, no, read this first then do it.
Taking this first step will help you not only take control back, but also increase your profits and reduce the headaches you and your staff have to deal with. Depending on the company it can take days, weeks, or even in some cases months. Stick with it, don’t let them frustrate you into giving up and just dealing with them. Short term it may cost some extra labor, but like all smart investments it will pay off in spades. Don’t let them win; they are not your friend or partner no matter what they say. Always remember that.
When you get the opt-out information, read it, reread it, memorize it. Know what they reimburse for the frame allowance.
Here is a panic point: remember the frame is not a big profit driver on its own, the lenses are, just don’t lose money on the frame. Look at their lens reimbursement and copay and know what each level of single vision lens, lined multifocal, PAL, anti-glare coating, and other add-on will bring in. Learn the different tiers and what their qualifications are.
Then, match the independent lenses to them. Some leave it up to your discretion but verify; remember we want to avoid red flags and audits. This next part is very, very important: Make sure they won’t try and take money back if the copays are over what they give you. This is a sneaky tactic used by at least one of the bigger ones—they claim it’s part of the person’s premium. Dump them if they do this; they are not worth your time and it will open more spots for better profits.
Next, and, preferably at the same time, learn about house/independent lenses and coatings. This is where so many offices drop the ball. With so many resources, like the many lab pages on Facebook, independent lab reps, and seasoned opticians, this seeming mountain is really a small hill.
Often generic lenses are rebranded name brands. I used one lab that listed some amazing lenses for up to 50% less than their name brand counterparts. Their anti-glares, each comparable to any of the big names at the same levels, were on average 10% to 20% less. Ask questions about the lenses on online forums and talk with independent reps and lab people. Verify everything.
Once you’ve gotten the information, look at your cost of goods and make sure you have a healthy gross profit. Cost ideally should be at most 25%, but it’s possible to go lower, especially if you edge in house.
Once you’re done with all of the above, enjoy a drink… You’ve earned it.