On the 1st of January 2015, capped fees on optometry services claimable through the Medicare schedule was removed. This meant that optometrists can now set a private fee for their professional services on top of the usual Medicare rebate.1 Although an exciting time for many practice owners, it also presented a new dilemma – how do we change years of patient expectations from no out-of-pocket costs to forking out for a gap payment?
Why You Should Consider Charging an Out-of-Pocket Fee
In addition to services eligible for a Medicare rebate, many optometry practices are also offering numerous services that don’t attract a benefit at all. With relatively recent technological advances and the standard of care in routine practice, these services include fundus photography, OCT imaging, and dry eye treatments such as the Eye-Light. Another common non-claimable service is contact lens fitting if the patient’s prescription doesn’t meet the eligibility criteria.
Online Retail is Growing
Over the past five years, online sales of glasses and contact lenses has demonstrated strong growth in Australia.2 Granted, while some of these e-commerce platforms may be owned and run by optometry practices, many optometrists and practice owners would be familiar with websites such as. For many, if not most, practices, this diverts a significant portion of income away from your practice. What remains? The income generated by your services.
Medicare Indexation is Falling Further Behind
For many years, Medicare has lagged behind consumer price index increases by a significant margin. The optometric Medicare Benefits Schedule suffered a freeze on indexation between 2013 and 2019; in 2015, a 5% decrease in the scheduled Medicare rebate was applied by the federal government; in June 2022, indexation for optometric items was increased by only 1.6%3 despite the Consumer Price Index rising by 5.1% in the preceding year.4
However, despite the current Medicare benefits schedule being insufficient to cover the actual costs of providing care, optometry continues to be one of the highest bulk-billing professions. In September 2022-23, over 94% of optometry services were bulk billed.3 Unfortunately, these high rates of bulk billing make it less likely that the federal government will increase the scheduled fee for optometric items.1
Bulk Billing Alone May Not Be Viable in the Long-term
Whether now or in the future, many optometry practices may need to adjust their billing practices for the business to remain sustainable. This is especially true with the evolving scope of optometry practice, which now includes dry eye therapies beyond simple tear lubricants or home remedies, with OCT imaging being included in the standard of care for various ocular diseases such as glaucoma and myopia control. Practising in these areas and providing quality eyecare costs money – the costs associated with purchasing the appropriate technologies and equipment, the costs of maintenance and upgrading equipment, and the costs of further education to stay abreast of developments.
Fully bulk billing your services can also subliminally encourage patient perceptions that your service is “free”, which may undervalue the profession, your expertise, and your time.
It May Not Be as Hard as You Think
One of the reasons many practices have yet to move to a private billing model is the fear that there will be significant pushback from patients. This may be in the form of dwindling appointment books, patient complaints, or patients failing to attend for timely care due to the cost.1
However, many optometrists and practice owners may be familiar with the scene of a patient heading to the reception desk after their examination, wallet in hand, expecting to receive the bill. The fact is, many patients are used to paying out-of-pocket for the attention of a healthcare professional.1 A few published case studies of optometry practices that have successfully moved to various versions of a private billing model can be found here.5
Introducing Additional Fees for Your Services
Introducing private fees in your practice for the first time can be daunting, whether for non-claimable items such as fundus photography or IPL for dry eye or a gap payment on top of the Medicare rebate for the consultation itself. Here are some strategies for making the transition.
1. Spend time deciding what billing practices are optimal for your business and patients.
After careful consideration, if you decide that sticking to a fully bulk-billed model is sustainable for your practice and allows you to provide the best quality care, then this is what’s right for you. However, if you feel drawn to introducing private billing, consider your personal ethics, the socioeconomic demographic of your patient base, and of course, your business’ finances.
2. Don’t be embarrassed or apologetic about charging a fee.
Dentists, GPs, and physiotherapists never apologise about the out-of-pocket costs for their services, so neither should you! Your time and skill are valuable, and you are charging a fee that aligns with this. Be confident and matter-of-fact when explaining an additional cost or providing a quote.
3. Be prepared to explain the necessity and value of these services that attract an additional cost.
Presumably the service you are recommending is clinically necessary. The patient is more likely to accept this (and the associated fee) if they understand why. You can explain that the cheaper or no-cost option is better than nothing. Still, the more intensive and higher-cost therapy is more effective. For example, using a warm compress with meibomian gland expression for evaporative dry eye might be free to perform at home, but will not be as effective as IPL therapy delivered in-office6 for a fee.
4. Never assume the patient won’t want to pay.
It would be unethical to withhold a clinically necessary recommendation based on the assumption that the patient will reject it due to costs. Patients should be offered all options relevant to their situation, given enough information about each solution, including the associated fees, and then allowed to make their own decisions. You may be surprised at which patients take up your services for the additional fee and which decline.
5. Set your fees and be consistent.
You may bulk bill certain patient groups or certain types of services and then charge a private fee for others. No matter what you choose, ensure you’re consistent with this and that all your practice staff are appropriately trained and informed of the new billing practices.
Introducing out-of-pocket costs for certain services doesn’t need to be as daunting as many practice owners feel it is. The reality is that your skills and time are valuable, and you shouldn’t short-change yourself for fear of patient perceptions that optometry should be “free”. Optometry Australia has established a schedule of recommended consultation fees for those ready to dip their toes into the world of private billing; you can access it here.7
- Optometry Australia. Practice Note: Changing billing practices. 2018. Available at: https://www.optometry.org.au/wp-content/uploads/Professional_support/Practice_notes/PRACTICE-NOTE_Changing-Billing-Practices_FINAL.pdf. (Accessed April 2023).
- IBIS World. Online Eyeglasses and Contact Lens Sales in Australia – Market Research Report. https://www.ibisworld.com/. 2022. Available at: https://www.ibisworld.com/au/industry/online-eyeglasses-contact-lens-sales/4089/. (Accessed April 2023).
- Insight. Optometry among top Medicare bulk billing health professions. https://www.insightnews.com.au/. 2023. Available at: https://www.insightnews.com.au/optometry-among-top-medicare-bulk-billing-health-professions/. (Accessed April 2023).
- Insight. Optometry Australia says 2022 Medicare indexation falling well behind CPI. https://www.insightnews.com.au/. 2022. Available at: https://www.insightnews.com.au/optometry-australia-says-2022-medicare-indexation-falling-well-behind-cpi/. (Accessed April 2023).
- Insight. Is private billing worth it in optometry? https://www.insightnews.com.au/. 2022. Available at: https://www.insightnews.com.au/is-private-billing-worth-it-in-optometry/. (Accessed April 2023).
- Yan X, Hong J, Jin X, Chen W, Rong B, Feng Y, Huang X, Li J, Song W, Lin L, Cheng Y. The Efficacy of Intense Pulsed Light Combined With Meibomian Gland Expression for the Treatment of Dry Eye Disease Due to Meibomian Gland Dysfunction: A Multicenter, Randomized Controlled Trial. Eye Contact Lens. 2021;47(1):45-53.
- Optometry Australia. Optometry Australia 2022 Schedule of recommended consultation fees. Available at: https://www.optometry.org.au/wp-content/uploads/2022_7th_-OA-fee-guide_FINAL-2.pdf. (Accessed April 2023). Modern Optometry. Discussing Out-of-Pocket Expenses with Patients. https://modernod.com/. 2022. Available at: https://modernod.com/articles/2022-sept/discussing-out-of-pocket-expenses-with-patients?c4src=article:infinite-scroll. (Accessed April 2023).