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Physicians Win Medicare Fee Increases
Medicare Overhaul Includes a 2-Year "Fee Fix."

The $395 billion Medicare Reform legislation passed by Congress in late November includes both a controversial prescription drug benefit for senior citizens and 1.5% across-the-board increases in Medicare fees for physicians in 2004 and 2005.

The comprehensive legislation was hailed by the Bush administration as a monumental breakthrough in providing new benefits to seniors, but congressional opponents, such as Sen. Hillary Rodham Clinton (D-N.Y.) and Sen. Edward Kennedy (D-Mass.), called the law a payoff to the drug industry and insurance companies.

The American Academy of Ophthalmology (AAO) blamed the original 4.5% reduction on what it called "flaws" in the Sustainable Growth Rate (SGR) formula used for budgeting and updating the next year's Medicare expenditures.

Physician organizations, including the AAO and the American Society of Cataract and Refractive Surgery (ASCRS), had lobbied Congress to take the same action it took on the 2003 Fee Schedule and reverse the projected cuts. And their voices were heard.

Ophthalmologists can also take comfort from the fact that the new Fee Schedule provides for a 4% physician payment increase for YAG capsulotomy and a 9% increase for glaucoma laser surgery performed under code 65855, the only major surgical procedures under Medicare that will increase in 2004.

In addition, six new CPT codes for payment in 2004 have been accepted by the Centers for Medicare and Medicaid Services (CMS) using the values proposed by the AAO and the Relative Value Update Committee (RUC). Four of the new codes relate to corneal amniotic tissue transplants. They are:

• 65780: ocular surface reconstruction; amniotic membrane transplantation
• 65781: limbal stem cell allograft (cadaveric or living donor)
• 65782: limbal conjunctival allograft (includes obtaining graft)
• 68371: harvesting conjunctival allograft, living donor.

The other two new codes are:

• 76514: a level 1 code for corneal pachymetry, unilateral or bilateral. (The AAO is appealing what it calls the "low fee" of $11.59 per patient for corneal pachymetry.)
• 67912: a new code for gold weigh implant; correction of lagophthalmos with implantation of upper eyelid load.

In another CMS initiative, drugs administered in a physician's office, such as Visudyne, will be reimbursed in 2004 at 85% of their average wholesale price as of April 1, 2003, instead of the previous 95%.

First Accommodative IOL Gets FDA OK
Capsular Tension Ring also Wins Approval.

eyeonics' CrystaLens

Following the unanimous recommendation of its Ophthalmic Devices Panel, the FDA has for the first time approved an accommodative IOL. The eyeonics' (formerly C&C Vision) CrystaLens can now be implanted in adults following cataract removal.

"CrystaLens is a revolutionary new breakthrough in vision enhancement," said J. Andy Corley, chairman and CEO of eyeonics. "It's an intraocular lens replacement for cataracts that accommodates like the eye's natural lens, allowing for seamless focusing up close, far away, and at all distances in between, giving patients their best possible vision."

In clinical trials, 497 eyes were implanted with CrystaLens over a 2-year period. According to eyeonics, clinical data showed significant accommodation, with 97.6% of patients able to read J2 or better. An eyeonics spokesperson said most surgeons can implant the foldable CrystaLens, which is made of a third-generation silicone, through a 3.5-mm to 3.7-mm incision (an injector is being developed).

To obtain accurate measurements, surgeons must perform immersion biometry or axial length measurements using the IOLMaster with third-generation software. This new software also eliminates the need to do manual keratometry.

In other FDA action, Morcher GmbH of Stuttgart, Germany, has received the OK to market its capsular tension ring (CTR) in the United States. Another CTR, the StabilEyes, which was developed by Ophtec and will be distributed by Advanced Medical Optics, is currently awaiting FDA approval.

Surgeons say CTRs have been routinely and safely used around the world for many years in the small percentage of cataract surgeries in which the patient has weakened or broken zonules.

Such conditions as pseudoexfoliation, subluxated lenses, prior trauma, prior pars plana vitrectomy or Marfan's Syndrome have compromised the zonular structure of 1% to 2% of all cataract patients.

In those patients, the CTR helps to stabilize the capsular bag prior to cataract surgery and IOL implantation. The ring greatly reduces the possibility of vitreous loss, dislocation of the nucleus, and inability to implant an IOL.

In addition, surgeons are likely to use CTRs "off-label" to provide centration in cases in which a soft IOL is being implanted. CTRs can also be helpful in achieving centration in patients receiving multifocal IOLs.

Custom Treatment Spurs VISX Sales Gains
Alcon and AMO also Report Strong Results.

Growing demand for the company's CustomVue LASIK procedure enabled VISX Inc. to record a 28% increase in overall sales in the third quarter vs. the same quarter a year ago. Total sales reached $39.2 million vs. $30.9 million in the 3 months ending Sept. 30, 2002. Almost all of the increase came from licensing revenue, which increased to $23.5 million from $15.6 million in the year-ago period.

"Our third quarter results show the significant impact that CustomVue can have on our revenue and earnings," said VISX Chairman and CEO Liz Davila. "In its first full quarter of introduction, CustomVue procedures represented 39% of the $23.5 million in licensing revenue."

Davila said adoption of CustomVue continues to be strong, with a record 145 WaveScan systems sold in the September quarter.

In other earnings news, Alcon reported a 10.6% rise in global sales to $822.7 million in the third quarter, and an increase in earnings to 49 cents a share from 41 cents in the year-ago period. The company said sales of IOLs and glaucoma medications were particularly strong in the most recent quarter.

Advanced Medical Optics (AMO) reported an 8.5% year-over-year increase in sales to $151.2 million in the third quarter. The company earned 23 cents a share for the period on an operating basis.

IN THE NEWS

Groundbreaking study. Alcon is about to begin two worldwide, 4-year Phase III studies using anecortave acetate for depot suspension (Retaane) in 2,500 patients with advanced dry AMD who are at risk of progressing to wet AMD. This is the first time such a study has been undertaken with dry AMD patients, and the FDA has given Retaane "fast-track" status for this indication. (See related story on potential new AMD treatments on page 33.)

Approved. Allergan has received approval from the FDA to market epinastine ophthalmic solution 0.05% (Elestat), an ophthalmic antihistamine for the prevention of itching associated with allergic conjunctivitis. Launch is expected in the first quarter of 2004.

B&L NDA. The FDA has accepted for review a Bausch & Lomb New Drug Application for an anti-inflammatory and antibiotic combination product. The compound is a loteprednol etabonate and tobramycin ophthalmic suspension (0.5% and 0.3%). The combination is aimed at treating patients with steroid-responsive inflammatory ocular conditions who have, or are at risk of developing, superficial bacterial ocular infections.

Coding advice. Iridex Corporation has begun a Laser Reimbursement Support Program to assist ophthalmologists on laser-related coding issues. Free membership is open to all U.S. ophthalmologists who own or use photocoagulator or photodisruptor products. Physicians can enroll by e-mailing reimbursement@iridex.com

AVR makes Inc. list. For the second consecutive year, Advanced Vision Research (AVR), the maker of TheraTears, has been named to Inc. magazine's list of America's fastest-growing privately held companies.

CORRECTION

In the October issue of Ophthalmology Management, the name of Advanced Medical Optics (AMO) was stated incorrectly.