Ophthalmology Physician Practice Management Fees
Ophthalmology physician practices cannot be owned by for-profit corporation in states like California, New York, and Texas that prohibit the Corporate Practice of Medicine. Management arrangements are used by private equity firms, platform physician practice companies, publicly-traded practice operators, and other for-profit businesses to manage the non-medical staff, facilities, equipment, supplies, and business services of ophthalmology practices.
California, New York, Illinois, Washington, Oregon, and Minnesota have all enacted mandatory state-level reviews of material transactions involving healthcare organizations and management service organizations (MSOs). Future business transactions involving ophthalmology practices in these states and other states may trigger reviews. Check with your healthcare attorney to see if a transaction will trigger a state review. If a review is required, you want to make sure all management arrangements are structured so that they comply to the letter with applicable state and federal laws.
Under turnkey management arrangements, for-profit management companies charge independent medical Professional Corporations (PCs) management fees to provide facilities, equipment, supplies, business services, and non-medical staff. According to surveys, fixed percentage rates of medical practice revenues are the most common form of management fees.
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Ophthalmology physician practice management fees can vary substantially from practice to practice for several reasons.
- Sub-Specialty Mix: Practice expenses are not the same for all types of subspecialties. Management fees should be calibrated for subspecialty mix. Some ophthalmologists are generalists, while others specialize in glaucoma, retina, or ophthalmic plastic and reconstructive surgery. Some eyecare groups also have optometrist generalists, as well as optometrist specialists in corneal and contact management, low vision rehabilitation, and vision therapy.
- In-Office Ancillaries: Each ophthalmology and optometry specialist uses specialized equipment, instruments, and supplies in their offices, as well as third party facilities. Ophthalmology practice may offer implantable premium intraocular lenses, refractive laser surgery, special eye drops, and cataract surgery in wholly-owned ambulatory surgery centers (ASCs). Over a dozen states have expanded the scope of optometry practice during recent years to help shore up the shortage of physicians. Optometrists in many states can now offer laser procedures and minor surgical procedures as well.
- Regional Geographic Costs: Labor, real estate, supplies, and other expenses vary widely from market to market. Practice expenses and Fair Market Value ophthalmology practice management fees vary from market to market.
The American Medical Association, Medicare, and the medical specialty societies spend appreciable time each year administering practice expense surveys and compiling data on the practice expenses for every physician service provided under all physician specialties. This practice expense data can be compiled and aggregated for the services provided by each type of ophthalmology and optometrist specialist and sub-specialist.
Turnkey Practice Management Fee Ranges for General Ophthalmology
Ophthalmology is a high-growth area in the U.S. healthcare industry. The demand for eyecare services, including cataract surgery, is driven by favorable demographics from the aging baby boomer population. Baby boomers have demonstrated a higher tendency than prior generations to purchase high-end premium implantable intraocular lenses when getting cataract surgery. These patients pay out-of-pocket (cash) for premium lenses and other services not covered under basic Medicare benefits.
Traditional fee-for-service Medicare does not cover preventive optometry eyecare visits, retail eyeglasses, or contact lenses. However, many Medicare Advantage benefit plans do offer coverage for optometry services. Medicare Advantage made up about 50% of all Medicare enrollment during 2023.
Ophthalmology and optometry practices can expect robust growth and favorable reimbursement support for several decades under these trends. Ophthalmologists and optometrists will find there are many national eyecare chains, networks, and management platforms that will accomodate their back-0ffice business support needs.
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