Eye Care Benefits Center What we do and why it is critical to Optometrists’ success

1. Eye Care Benefits CenterWhat we do and why it is critical to Optometrists’ success Colorado Optometric Association Coding & Billing Seminar October 23, 2005

2. ECBC: What we do for you • Managed Care Marketing Initiative • Coding education, initiatives and support • Monitoring trends in health care and third party payment systems • Improve exchange of information with states • Position Optometry with healthcare stakeholders

3. Managed Care Marketing Initiative: What it is. • Expanding the presence of Optometry in medical plans administered by managed care organizations (MCOs) and employers • Convert MCOs who exclude or underutilize Optometrists to full inclusion in their networks • Persuade ERISA plans managed by large employers to reimburse for medical services provided by Optometrists

4. Managed Care Marketing Initiative: How we do it. • Target identification • Research and validation • Confirm the issue/exclusion • ERISA v. MCO v. payment • Determine scope of impact • Local v. regional v. national • Small v. large • Identify contacts

5. Managed Care Marketing Initiative: How we do it. • Secure Meeting • Leverage Aon contacts • Utilize local contacts where available • Prepare for meeting • Research organization and background • Identify and prepare team • Aon, ECBC representative and local Optometrist • Customize presentation and prepare proof documents

6. Managed Care Marketing Initiative: Style and Approach • Well Prepared • Seek to establish partnership • Understand MCO goals • Demonstrate how Optometrists help meet goals • Thoroughly researched • Vetted and proven documents • Power Point Presentation • Emergency Room and cost studies • Facts and relevant stories • Follow up

7. Managed Care Marketing Initiative: Who does it • Eye Care Benefit Center volunteers • Tom Weaver DMD (AOA staff) • Aon Consulting • Local Optometrists from the impacted State

8. Managed Care Marketing Initiative: Who does it ECBC • Dr. Mark Hennen, Chair • Dr. Randy Fincher • Dr. Kathleen Goff • Dr. Greg Kraupa • Dr. Mark Lee • Dr. Doug Morrow • Dr. Bill Rivard • Dr. Joe Studebaker • Dr. Mike Todd • Dr. Rebecca Wartman

9. Managed Care Marketing Initiative: Aon Consulting One of the largest employee benefit consulting firms • We know the managed care organizations • We understand the dynamics of health care benefits • MCOs are usually willing to meet with us • We understand the needs of large employers and MCOs

10. Managed Care Marketing Initiative: Targets • National, regional or large local PPOs • Large, multi-state employers (ERISA) • Medicare Advantage plans (newly added category) • Federal plans (cooperating with Federal Relations Committee-FRC)

11. Managed Care Marketing Initiative: Successes Optometrists now have access to reimbursed medical care for 29.4 million additional patients Notable Colorado Successes

12. Managed Care Marketing Initiative: Reasons for Exclusion • MCOs/Employers typically have excluded Optometrists due to: • They do not understand what we do • They think it will increase claims costs • They do not want to spend resources on credentialing • “They always have done it this way”

13. Managed Care Marketing Initiative: Critical Success Factors • Liaison Program to identify targets • ECBC representative maintains contact with state appointed liaison • Primary communication method regarding managed care issues • Ensures best effort by Optometry to promote inclusion • Liaison program needs full ED/state leadership support and commitment

14. State Liaison Roles and Responsibilities • Knowledgeable of state managed care issues affecting all parts of the state • Familiar with coding issues • Responsive to/from ECBC and State • Connected to state leadership • Willing to attend national meetings • Longevity of service

15. Trends in Third Party Payment • Continued consolidation of payors • Pay for performance • Driving quality to reduce cost increases • Consumer Directed Health Care • HSAs and HRAs • Empowered consumer • Medicare Reform • Prescription drug • Advantage: HMOs and PPOs

16. What is driving change in health care? • COST!!!!

17. The Widening Gap Increases in Premiums vs. Other Indicators Source: Kaiser/HRET and KPMG

18. The Widening Gap • At current trend rates of 12% and household income growth rate of 4.6%, health benefits as a percent of total compensation will increase from 19% in 2003 to 63% in 2021 • Household healthcare expenditures will increase to 17% of income from 5% Source: Kaiser/HRET and KPMG

19. Healthcare Inflation Consumer Coverage Gap Source: Kaiser Family Foundation, Bureau of Labor Statistics 2002 National Compensation Survey, Health Research and Educational Trust, Bureau of Labor Statistics Consumer Expenditure Report, 2003, Chapter House

20. Driving Health Care Quality • Pay for performance • “Premier” physicians at UHC • Network within a network • More than 35 health plans utilizing • Electronic health records • Implemented effectively at Veterans Affairs • Intended to eliminate errors • VISTA is now available to any practice

21. Growth of HRAs and HSAs • HSAs were legislated December 2003 • Jan. 2005: over 600,000 participants • Mid 2005: over 1 million participants • HRA available around 2001 • Jan. 2005: 2.6 million participants • Mid 2005: over 3 million participants • Combined CDHP membership anticipated by January 2006: 6 million Source: American Association of Health Plans, Inside Consumer Directed Healthcare

22. Expansion of Consumer Directed Health Care and HSAs • MCOs now committed to marketplace • UHC purchased Definity • UHC only offering HSA/CDHC to own staff • Anthem purchased Lumenos • Federal Government offering HDHP/HSAs • Much of HSA growth coming from small employers

23. Health Savings Account High Deductible Health Plan Unused HSA balance is vested and portable Health Savings Accounts Total Contributions limited to deductible or $2,650/ $5,250 Source of Funds Employee Employer (optional)

24. Empowered Consumer with Consumer Driven Plans • Aetna will provide actual allowed office visit charge amount • UHC is identifying “Premier” physicians • Participants have ready access to peer reviewed health care information • MCOs and employers are driving hospitals to measure outcomes and reduce errors

25. Impact on Optometry • More self-pay by patients. Patients may: • still use network doctors for discounts • rely more on coupons for savings • be willing to pay full cost for outstanding value/service • insist on negotiating fees • Direct-to-consumer marketing may become even more critical • More billing challenges

26. Impact on Optometry • Compete on basis of cost, outcomes and service • Collect and monitor data • Develop performance and quality standards and strive to meet them Source: Chapter House

27. Medicare Advantage • ECBC and FRC monitoring Medicare Advantage development • Aggressively pursuing plans that exclude ODs • Adopting successful Managed Care Marketing Initiative for discriminating Medicare Advantage plans

28. Impact on Optometry • Consider joining Medicare Advantage networks to provide medical and/or vision services • Some networks may resist including Optometrists • Fewer Traditional Medicare patients • Different rules than original Medicare • Be aware, this may only be temporary

29. A Closer Look at Colorado

30. Trends in ColoradoHealthcare • Consolidation & Change • UHC purchases PacifiCare • WellPoint CA purchases Anthem • Great West HealthCare wins State of CO contract and selects Avisis • Cigna drops Opticare for routine vision in favor of VSP

31. Trends in ColoradoHealthcare – Legislative • House Bill 04-1354 - Uniform Credentialing New 28 page credentialing application • Senate Bill 37 – 2nd Level Appeals Mandatory to Carriers –Voluntary to Members • House Bill 05-1165 Insurance Benefit Assignment Carriers are required to pay Claims directly to a Provider who holds assignment regardless of being In or Out-of-Network.

32. Trends in ColoradoVision Care • Voluntary Vision Plans Colorado Vision Care Direct • Discount Plans are popping up everywhere • Wal-Mart Vision Insurance Plans covering routine vision and Safety Programs are being introduced

33. Questions?