VSP Communicates Plan Changes to ECPs, Will Alter Contract Lab Network As Well
RANCHO CORDOVA, Calif.—VSP Vision Care, the U.S.’s largest managed vision care provider organization, has communicated several changes in its plan fees and reimbursements to its independent eyecare providers over the past several months, in letters sent to ECP providers from Rob Lynch, VSP’s president and CEO as well as subsequent communications from Gary Brooks, VSP Vision Care president.
In addition, VSP is planning to reduce the number of labs in its Contract Lab network around the country, effective Jan. 1, and is consolidating its lab network for VSP doctors participating in both the Signature and Choice plans at the beginning of next month in most states, according to Don Oakley, head of VSP’s Lab operations.
The provider network plan changes, which took effect July 1, sometimes vary by market but include the elimination of frame case payments, the elimination of the patient-supplied frame dispensing fee and an increase in value-added discounts for Signature Plan patients to 30 percent (only on non-covered glasses purchased on the same day as their eye exam).
Based on feedback to its original communications to ECPs on changes in its contact lens care program, on June 24 VSP updated the July 1 program changes by expanding the list of approved CLs and implemented new tiered pricing for new and refit patients. The initial contact lens exam (fitting and evaluation) is now included in a package price with additional follow-ups able to be billed to patients at 85 percent of usual and customary fees. Also, the company will post updated tools on VSPOnline to help educate patients about the new program.
Further, for its Choice program, VSP will initiate “patient option cost controls” on several popular options, including progressive lenses and anti-reflective coatings and has reduced its Choice program exam and materials dispensing reimbursements. Details provided to doctors vary by market.
Stated Brooks, “We are committed to competing on behalf of private practice doctors to ensure their long-term success. In this economy, employers are more cost conscious than ever before. In fact, about a third of our clients use price only as the determining factor for the selection of a vision care plan. It's important to remember, we don't set doctor fees. The marketplace and the fees accepted by competing doctors do. And our fees continue to be the best in the industry. The new product and pricing changes will help VSP retain and win contracts so we can continue sending members to our doctors and encouraging patients to make their eyewear purchases from their VSP doctor.”
Regarding the lab network, according to Oakley, the contract labs being removed from VSP’s network, effective Jan. 1, will only impact 3 percent of VSP lab orders sent through the contract lab network, “preserving 97 percent of the choice our doctors currently make when selecting a contract lab. Consideration was given to a variety of factors, including the amount of VSP jobs processed, technical capabilities and geographic locations.” The impacted labs were sent letters notifying them of the changes six months ahead of the transition, he said.
VSP’s contract labs have numbered 300 for several years. A VSP spokesperson told VMail, that effective Jan. 1, “our contract lab network will be less than 300 labs, but not substantially less. The exact number of labs remains proprietary.”
In addition, Oakley said, effective Aug. 1, VSP will consolidate its lab network for VSP doctors in most states, “allowing them to freely choose any contract lab to process their VSP Signature or Choice plan orders.” Previously, any lab in VSP’s contract lab network could process Signature Plan work but some labs could participate in VSP’s Choice Plan.
Oakley added, “We listened to feedback from our doctors and felt the need to provide them with more flexibility when choosing a lab.”
VSP owns and operates two labs in Columbus, Ohio and Sacramento. It acquired Ultra Lens in Florida in 2008 and Legends 4.0 in Texas in 2007. In partnership with Carl Zeiss Vision, VSP owns Perfect Optics and Tri-City Optical Laboratories. Earlier this week, it was announced VSP would be a minority partner in Essilor’s acquisition of Rhode Island-based McLeod Optical.
Asked if VSP’s recent lab acquisitions, either as joint ventures or alone, influenced its decision to reduce the number of labs in the contract network, Oakley said no, adding, “These changes were made after taking into account many factors, including the number of VSP jobs processed, technical capabilities and efficiencies, geographic locations and the amount of existing contract lab network coverage within certain regions.”