However, the average conversion factor for optometrists’ fees has remained level over the past 6 years.
Charles B. Brownlow
Some of you may recall that I have done two previous surveys of
optometrists fees, published in Primary Care Optometry News
in 2005 and again in 2008. In each case, the data were drawn from the
collection of fee analyses that I had done during the previous year. This was
an attempt to glean useful information regarding eye doctors patterns of
billing and to provide useful information for doctors contemplating changes in
their own fee schedules.
Analyses help docs establish fees
My company, PMI, has been doing fee analyses since the mid-1990s to
assist eye doctors and clinics in establishing appropriate fees for their
services. The analysis is provided as a spreadsheet, accompanied by a cover
letter to explain the findings.
Among the columns that appear in the analysis are the CPT codes for 54
services commonly provided by eye doctors, along with the Medicare relative
value for each, from the current and previous year. Additional columns provide
data for the same services drawn from the 50th percentile values of a national
survey of MDs fees from the previous year and from national average
Medicare fees for the year the survey was done.
The layout of the spreadsheet permits a doctor to enter her or his
current fees for the services and to then compare the fees for each service
with the numbers from the MD fee survey and the current Medicare fees. When
considering their fees, many doctors will supplement the information from the
fee analysis with local telephone inquiries of other eye care providers or data
drawn from computerized programs such as AccuFee (www.AccuFee.com), Reimbursement
Plus (www.reimbursementplus.com) or other web- or software-based
The 2011 survey
To create the survey that is reported
here, I compiled data from 75 randomly selected PMI fee
analyses performed for offices during 2010 in an attempt to provide an
interesting comparison with the data from the 2008 survey. As always, the
information is presented directly, with no attempt on my part to interpret it,
draw conclusions from it or make suggestions relative to it. The numbers are as
they are. Review them and use them as you see fit.
The process for choosing which analyses to include is random, with the
fee schedules for the offices originally compiled on a large, horizontal
spreadsheet. This permits calculations of highest,
lowest, average and median for each of the
services, as well as for the totals of the fees and for the conversion factors
for all of the schedules.
The conversion factors are calculated by dividing each doctors
total fees for the services by the total of the Medicare relative values for
those services. Once the calculations are made, the individual schedules are
purged, leaving only the summary data on the spreadsheet. The final spreadsheet
includes the same information from the 2008 survey (of 2007 fees) and 2005
survey (of 2004 fees) for comparison.
Broad range of charges
One of the characteristics that stands out in the 2011 survey is the
broad range of 2010 optometrists charges for many of the services. For
example, for 92070 (fitting and dispensing a therapeutic contact lens), the
highest reported fee in the 2007 survey was $180, the lowest was $6, the
average about $83 and the median $70. In the 2005 survey the range was even
larger, with $700 as the highest, $15 as the lowest, $95 as the mean and $75 as
the median. For the 2011 survey, the highest fee reported for 92070 was $325,
the lowest was $20 and the average was $100. The 50th percentile fee for 92070
from the survey of 2010 MDs fees is $133, and the national average
Medicare allowed amount is about $67.
The great range of fees is healthy, of course, indicating no collusion
or fee setting among doctors, but it may also indicate a wide range of
sophistication and understanding with respect to the definitions of the codes.
It probably also indicates that doctors are using this code to report
everything from supply of a single replacement contact lens to a relatively
complex fitting of a contact lens. The intended use of the code is for the
provision of a bandage contact lens as for recurrent corneal erosion, an acute
corneal abrasion or following foreign body removal.
To provide more information for comparison, we also include the
conversion factors for each fee analysis we conduct and calculate their
highest, lowest, average and median conversion factors during the survey
The conversion factor (CF) is derived from Medicares formula for
creating its fees, where the fee for each service is the product of the
relative value unit for that service (RVU, set by Medicare) multiplied by
Medicares current CF, set by Congress (fee = RVU x CF). This formula is
the basis of the Resource-Based Relative Value Scale (RBRVS), which has been
used by Medicare for establishing its fees since 1992.
A little math permits us to rework the basic formula, fee = RVU x CF,
and solve for the conversion factor, CF = fee / RVU. We simply total all the
fees in each doctors schedule and divide the sum by the total value of
RVUs for those services.
As you can see from the table, doctors conversion factors swing as
wildly as the contents of the schedules, with the highest in the 2011 survey
being $80, the lowest $28 and the average $44. These compare to the national
average Medicare conversion factor for 2011 of $34. Thus, the average
conversion factor from the 2011 survey of optometrists fees was 29.3%
higher than Medicares 2011 conversion factor.
Comparing this information to a 2011 fee survey of MDs for these
services, we see that the conversion factor resulting from the 50th percentile
fees from that survey is $67, which is 97% above Medicares 2011
conversion factor. It is also interesting to note that the average conversion
factor across the sample for optometrists 2010 fees is $44, nearly
identical to the average conversion factor for optometrists in 2007 ($45.45)
and the average conversion factor for optometrists in the 2005 survey
Little change over 6 years
The average conversion factor for optometrists fees has remained
level over the past 6 years, even as Medicare has implemented steady increases
in the relative values for eye care services over the same period. This is
supported by the fact that actual fees reported by optometrists have remained
largely unchanged during the same period, not reflecting Medicares upward
changes in relative values.
In closing, it is interesting to note the very wide differences in
individual fees for each of the services, through the highest, lowest, average
and median, across the 2005, 2007 and 2010 data. The significant differences
run through the entire list of services: the general ophthalmological services,
the evaluation and management services, the special ophthalmological services
and even through the surgical services.
These wide disparities among fees and fee schedules are not regional, in
that we find similar ranges in the fee analyses we conduct every year,
regardless from which part of the country individual fee schedules are drawn.
As we have come to expect, doctors of optometry demonstrate their independence
in setting their own fees, just as they do in choosing diagnostic tests and the
treatment/management modalities for their patients.
Based on the data across these 6 years, one would expect the wide range
to continue into the future, unless dramatic changes in optometrists
understanding of the value of their eye care services occur or new payment
mechanisms in the health care system are developed and instituted.
- Brownlow CB. Survey results show wide spread in ODs fees.
Primary Care Optometry News. 2005;10(10):14-15.
- Brownlow CB. Dramatic spread in optometric fees continues.
Primary Care Optometry News. 2008;13(4):13-14.
- Charles B. Brownlow, OD, FAAO, is a member of the Primary
Care Optometry News Editorial Board and a health care consultant. He can
be reached at PMI, LLC, 321 W. Fulton St., P.O. Box 608, Waupaca, WI 54981;
- Disclosure: Dr. Brownlow has no direct financial interest in the
products mentioned in this article, nor is he a paid consultant for any