Update: Punctal Plugs & Reimbursement
Increasing use of punctal occlusion and growing reimbursement are drawing more attention from regulators. Here's how your practice can benefit -- while staying out of trouble.
By Kevin J. Corcoran, COE, CPC, FNAO and Donna M. McCune, COE, CCS-P

It's estimated that more than 1 million people in this country suffer from dry eye syndrome or related conditions, and the number of patients seeking treatment is likely to increase as the population of the United States ages. Consider these numbers:

A Between 1998 and 1999, the number of Medicare claims for punctal occlusion (CPT code 68761) paid to M.D.s rose from 123,500 to 159,000 -- an increase of 28%.

A During the same period, claims paid to O.D.s grew from 54,300 to 79,000 -- an increase of 45%.

These numbers have made punctal occlusion with plugs one of the top ten most frequently performed ophthalmic procedures. (At this writing, Medicare data for 2000 was not yet available, but it's safe to assume this trend is continuing.)

The reimbursement factor

The growth in the frequency of this procedure isn't just the result of a jubilant response from patients. Practitioners stand to gain significant financial benefits because reimbursement for this procedure has increased dramatically in the past 5 years, as detailed in the table below:

By definition, reimbursement for this procedure is made on a per-punctum basis. However, multiple surgery rules reduce the reimbursement on the second through fourth procedure by 50%. (For example, if the two lower puncta are occluded at the same time, then Medicare reimbursement is $244.47 for the first punctum and $122.23 for the second punctum, less applicable copayment and deductible.) That's still an impressive $366.70, compared with $742.59 for cataract surgery (CPT code 66984), the most common ophthalmic surgery.

Overall, Medicare reimbursement for this procedure has almost tripled since 1997. In contrast, most other ophthalmic surgeries have seen little or no reimbursement growth in the past 5 years.

Unfortunately, whenever rapid growth in third-party payments occurs, attention from regulators follows. This has already had unfortunate consequences for a number of M.D.s. (See "The Pitfalls of Overutilization" on page 94.)

The bottom line? It's more important than ever to proceed cautiously, code correctly and document thoroughly.

Protecting yourself

Keep these points in mind as you take the history, conduct your examination and make chart notations:

• Standard of care. Reimbursement is only made for medically necessary procedures. Because several options exist for treating dry eyes, and the severity of the disease determines which therapy is appropriate, it's important to establish severity and include all relevant information in your notations.
• History. Make sure your history questions elicit the evidence you need, and your notations include the relevant data. (For an example, see "Details Count,")
• Exam. Your examination should include, at a minimum, the patient's visual acuity, an external examination and a slit lamp exam. Diagnostic tests may include tear break-up time, Schirmer test, and staining with rose bengal, fluorescein or lissamine green. (Some ophthalmologists employ a lactoferrin assay to detect protein abnormalities in tears.) Results of tests should be clearly documented in your notations.
• Treatment. According to American Academy of Ophthalmology treatment guidelines, as well as reports from manufacturers of plugs, the vast majority of patients with moderate dry eyes only require occlusion of the lower puncta. Occlusion of the upper puncta is only appropriate when severe disease is present, or for patients who don't obtain symptomatic relief following lower puncta occlusion. If you occlude upper puncta, your chart notations should indicate severe disease or no relief following treatment of the lower puncta.

Dry eyes and LASIK

During laser-assisted in situ keratomileusis (LASIK), some corneal nerves are severed. Many doctors now believe that this is the reason most LASIK patients develop symptoms of dry eye, which sometimes last for months. For severe or intractable cases, punctal occlusion may be advisable. Patients need to be informed prior to surgery about the risk of dry eye and counseled that there are methods to deal with it, primarily artificial tears and ointments.

In terms of reimbursement:

• Many third-party payers will reimburse you for punctal occlusion to treat a symptomatic patient with a postoperative complication -- even if the LASIK surgery itself is a noncovered service.
• However, insertion of punctal plugs prior to LASIK as a prophylactic measure, or immediately following LASIK (before a trial of topical medications), would be considered medically unnecessary and ineligible for reimbursement.

Reimbursement for supplies

So far, in addition to reimbursement for the procedure, the cost of silicone plugs (but not collagen plugs) has been reimbursed to the physician. However, that's about to change.

The Balanced Budget Act provided for a 4-year transition period to implement a new resource-based system for calculating Medicare reimbursement of physician services. As part of this transition, separate payment for supplies is gradually being phased out, as shown in the table at right. By 2002, the value previously assigned to a silicone plug will be included in the payment for 68761. (This partly explains the steep increase in reimbursement described in the chart above.)

Staying ahead of the game

Because of the popularity of punctal occlusion, you need to pay attention to your documentation. Make sure you provide careful, thorough exams and notes, and don't go too far overboard in the number of procedures you perform.

Remember: It pays to scrutinize your own medical records and practice patterns before someone else does.

Kevin Corcoran is president of Corcoran Consulting Group, located in San Bernardino, Calif. Donna McCune is a senior reimbursement consultant with Corcoran Consulting Group. You can contact them at (800) 399-6565 or by visiting their Web site at www.corcoranccg.com.