Practice administrators and physicians have spent much of their careers toiling to get Medicare to pay higher reimbursement rates and to cover more new technology, including the IOLMaster (Carl Zeiss Meditec Inc., Dublin, CA), pachymetry, Visudyne (Novartis Pharmaceuticals Corporation, East Hanover, NJ), Macugen (Eyetech Pharmaceuticals, New York, NY), and capsular tension rings. Although Medicare eventually covered the services, the remainder of ophthalmologists' fees were seemingly reduced the next year to offset these payments. One might wonder about the following statement on Medicare programs: “Part B of the Supplementary Medical Insurance (SMI) Trust Fund, which pays doctors' bills and other outpatient expenses … [is] projected to remain adequately financed into the indefinite future because current law automatically sets financing each year to meet next year's expected costs.”1
The real meaning of adequately financed simply is that the Medicare reimbursement pie is fixed. In other words, as more procedures are performed, as more drugs are delivered, and as more new-technology IOLs are implanted, Medicare just pays less (to the surgeon in the form of a paid surgical fee) on each procedure the following year to keep the total amount paid the same.GETTING PAID
The FDA labeled the Crystalens (Eyeonics, Inc., Aliso Viejo, CA) accommodating. The company sells the IOL as an elective procedure/uncovered device. Instead of selling the lens as a new-technology IOL (which would have made the company money but done nothing for the surgeon), this business plan allows the surgeon to charge the patient a market rate for the presbyopic component of the procedure, to select proper patients (eg, not 40-year-old early presbyopes), perform a stringent patient work-up (including accurate A-scans), and implant the IOL.
The naysayers, are echoing their remarks from 1994 regarding patients paying out of pocket for laser vision correction: “Cataract patients will not pay an additional $2,400 per eye for an accommodating-IOL procedure.” Again, they have been proven wrong. Ophthalmologists implanting the Crystalens discovered that patients will pay extra for the lens in order to achieve spectacle-free near, intermediate, and distance vision.
Similarly, refractive IOLs are becoming the preferred form of hyperopic correction, and they are an appropriate choice for myopic patients in their 40s. Confident manufacturers will introduce their refractive IOLs to the public as an uncovered, elective IOL. Other manufacturers willing to hasten the decrease in physician fees will introduce their IOLs as a cataract or new-technology IOL. In my opinion, standard IOLs should be used in standard cataract surgery and covered by both commercial insurance companies and Medicare. Neither the new refractive IOLs nor the procedures to implant them should be covered by insurance. The procedure and IOL should be priced at a premium and paid for by the patient—a practice not currently permitted by Medicare, which is presently reviewing its policy (Please view Exhibit A at www.crstoday/exhibits/01.html). Surgeons currently implanting the refractive IOL in non-Medicare patients are asking the ASCRS and AAO to formally issue position papers supporting Medicare patients' right to pay for the implantation of refractive IOLs out of pocket.
Giving Medicare patients the choice is important, but the non-Medicare market is large enough to support a refractive IOL practice. Thirty-three percent of the population between the ages of 45 and 64 already have early cataracts.2,3REFRACTIVE IOLs IN PRACTICE
Make a few preparations before you start implanting the refractive IOLs in patients who have commercial insurance and before charging extra for the IOL and the implantation procedure. Upon review of your commercial insurance contracts, you will likely find language stating that services that are not covered may be billed to members only if:
• the insurance company confirms the service is not covered (Please view Exhibit B at www.crstoday/exhibits/01.html);
• the member was advised in writing prior to the service's being rendered (Please view Exhibit C at www.crstoday/exhibits/01.html); and/or
• the member agreed in writing to pay (Please view Exhibit C at www.crstoday/exhibits/01.html).
The Crystalens accommodating IOL has been available since November 2003. More than 700 surgeons are currently credentialed or in the credentialing process (data on file with Eyeonics, Inc.), and the IOL has been used in nearly every state. In your market, commercial insurance companies have most likely agreed to allow their members to pay out of pocket for the Crystalens and the implantation procedure. Before charging cataract patients with commercial insurance, send a letter similar to Exhibit B via certified mail from your practice, as well as from your ASC, to the health insurance plans for which you are a provider. The following is a typical response: “Coventry Health Care agrees that you can bill the patient for the upgrade. Because we believe this is an upgrade, and not medically necessary, it would not be a covered benefit. Please make sure the patients understand this when they sign the waiver. The waiver should not say anything to the effect that ‘your insurance may not cover this' or ‘if your insurance plan does not cover this.' That still leaves the door open for issues. Please make sure it clearly states something to the effect ‘this is not a covered benefit' or ‘this is not medically necessary and your insurance will not cover this.'” A good medical waiver needs to satisfy all of these points (Please view Exhibit C at www.crstoday/exhibits/01.html).PRICING
What is a fair price for a procedure that reduces presbyopia? The simple answer is whatever the free market will pay. You need to consider the fixed and variable costs associated with achieving a satisfactory surgical outcome and establish a fair market price for your services. The skill, training, responsibility, and experience of the surgeon are valuable. The expectations of the refractive patient and demands on the surgeon and staff also have a cost that has to be covered. The fee needs to reflect market value, not what a for-profit insurance company deems the services are worth. You will be surprised by the market value of refractive cataract surgery (Please view Exhibit D at www.crstoday/exhibits/01.html).BILLING AND COLLECTIONS
The billing and collections procedures should be kept simple. For a purely refractive case, the patient should pay 100% of the cost. In a refractive cataract case, the insurer should pay for cataract extraction, and the patient should pay for the uncovered IOL and its implantation (Please view Exhibit E at www.crstoday/exhibits/01.html). Most practices collect a global fee and use it to pay the ASC. This method of collecting payment is preferred for patients' convenience. Internal codes should be created to alert the staff in your billing department to post the uncovered charge and payment (Please view Exhibit F at www.crstoday/exhibits/01.html). Remember, never send any information about the uncovered services to the insurance companies. That information is between the patient and the practice. Once you receive approval from the commercial insurance companies to charge patients directly for the uncovered services, there should be no more communication with the insurance company. Insurers receive a claim for standard cataract surgery and pay in a standard fashion.NEW TECHNOLOGY
Every major manufacturer is working on an accommodating, higher-order–aberration, multifocal, or combination IOL to eliminate patients' dependence on glasses for near and intermediate vision as well as to improve their quality of vision. Surgeons and practices should make it known to the AAO and the ASCRS that their members want them to issue a position paper supporting the Medicare beneficiaries' right to purchase this type of technology themselves. These statements would accomplish the following:1. The research and development of better refractive IOLs as well as these efforts' funding would increase. Surgeons have no incentive to implant the new refractive lenses if Medicare and commercial insurers fix payments at an artificial low (eg, at the same rate as for standard IOLs).
2. Medicare Part B funds would be used to pay for quality cataract surgery, traditional monofocal IOLs, and the treatment of diseases. Taxpayers should certainly not pay for refractive surgery. It is very important to understand that, originally, Part B funds mostly went to providers. Unfortunately, during the past several years, more and more of those proceeds have been given to pharmaceutical companies and device companies. In other words, until pharmaceutical and device reimbursement costs are separated from physician services, there will be competition for a greater share of the pie.
3. Practices charging a free-market fee for the refractive IOL and its implantation procedure would recognize that the fees collected will benefit their bottom line. For example, a 1% increase in Medicare fees (the 2005 rate) to a practice generating $1.5 million in annual collections would be approximately $15,000. This amount would not be sufficient to offset medical inflation, which is at least 6%.
If Medicare allowed patients to pay directly for medically unnecessary refractive IOLs and their implantation, the difference to the ophthalmology practices and ASCs would be enormous. Implanting 100 of these IOLs annually, or two per week, would generate $140,000 in additional revenue—more than nine times as much as a 1% increase would yield.
Most practices implanting the medically unnecessary IOLs in patients with commercial insurance use between 100 and 600 IOLs annually. In my opinion, adding Medicare beneficiaries to the population would more than double this rate. More patients paying out of pocket for refractive IOLs would result in better fees for all other Medicare services. For each Medicare recipient allowed to pay out of pocket for refractive IOLs, Medicare would save $150 per eye on the IOL and $107 per eye on spectacles if only 10% of Medicare patients elected to purchase the refractive IOL. The savings to the Medicare system would exceed $100 million annually. Medicare's allowing patients to pay out of pocket for their refractive IOLs would be a win for ophthalmologists, patients, and taxpayers.Jim Denning is CEO of Discover Vision Centers in Kansas City, Missouri. He is on the Speakers' Bureau for Eyeonics, Inc. Mr. Denning may be reached at (818) 350-4529; firstname.lastname@example.org.
1. Social Security and Medicare Boards of Trustees. Status of the social security and Medicare programs: a summary of the 2004 annual reports. Available at: http://www.ssa.oact/trsum/tr04summary.pdf. Accessed February 16, 2005.
2. Mitchell P, Cumming RG, Attebo K, Panchapakesan J. Prevalence of cataract in Australia: the Blue Mountains Eye Study. Ophthalmology. 1997;104:581-588.
3. Klein BEK, Klein R, Lee KE. Incidence of age-related cataract. The Beaver Dam Eye Study. Arch Ophthalmol. 1998;116:219-225.