at press time
Arbitration: An Answer to Malpractice Suits?
It's a Simpler Way to Resolve Patient Complaints.

Patients making their first visit to a physician's office in states such as California and Florida may find that they must sign a contract before being seen by a doctor. The contract stipulates that the patient will submit any complaints that may arise over treatment to binding arbitration.

Practices that have required patients to sign binding arbitration contracts report that more than 90% of the patients do so immediately.

Physicians who've been using binding arbitration to resolve patient complaints say its advantages include lower defense costs, no jury selection, knowledgeable arbitrators, fewer pre-trial motions and short hearings that are rarely continued or postponed. However, very few arbitration cases are summarily dismissed.

Though a small number of physicians and some managed care organizations have asked patients to sign binding arbitration agreements for years, the idea has recently become more widely embraced by doctors. For example, the Florida Medical Association (FMA) has been holding well-attended risk management seminars around the state, which educate physicians on how to use binding arbitration contracts.

As part of these seminars, the FMA provides physicians with a sample arbitration contract and a related video that can be shown to patients. By following the guidance offered by the FMA, practices can use binding arbitration agreements and still meet the legal requirements of informed consent.

The arbitration contracts have been upheld by courts in California, the state in which binding arbitration is most commonly used as a way to settle physician/patient disputes. However, any practice interested in using binding arbitration should first consult with its legal counsel, as state laws in regard to arbitration agreements can vary. In addition, practices should check with their managed care plans and malpractice insurance carriers to determine whether use of binding arbitration would violate any agreements with these entities.

"We don't know how many physicians will begin using the binding arbitration contracts," says Lisette Gonzalez Mariner, FMA director of communications. "But we felt our members needed this information and we were there to provide it."

IN THE NEWS

Medicare fee fix approved. As part of an omnibus spending bill passed on Feb. 13, Congress has approved an overall 1.6% increase in Medicare physician payments for 2003, effective March 1. The action reverses a 4.4% reduction in physician payments that had been scheduled to go into effect on March 1.

Congress also retroactively corrected errors in the so-called "sustainable growth rate" formula used to determine physician payments, creating a $54 billion fund that will be used to augment Medicare physician fees over the next 10 years.

At Press Time will have further details on these important developments in our April issue.

HIPAA deadline nears. The date for complying with new HIPAA standards for maintaining the privacy and integrity of protected health information is April 14. There will be no general extensions of this deadline.

These so-called "Privacy Regulations" require physicians to intensify their efforts to maintain patient confidentiality, primarily through staff training and the development of secure patient records systems.

One of the key provisions of the Privacy Regulations involves a patient's right to be formally notified of the uses and disclosures of his medical records, and to have full access to those records. Therefore, it's important to remember that the new regulations require that practices provide all patients with a "Notice of Privacy Practices." This document deals with how you'll use and disclose information. You should also make a "good faith effort" to obtain written acknowledgement from all your patients that they have received this notice.

A more complete discussion of your obligations under HIPAA Privacy Regulations can be found in an article titled The Right Reaction to HIPAA in the October 2002 issue of Ophthalmology Management. This article can be found archived on our Web site at www.ophthalmologymanagement.com

Eye ASCs Face Some Reimbursement Cuts
MedPAC Cites Disparities in Hospital and ASC Payments.

The Medicare facility payment for YAG laser capsulotomy (CPT code 66821) performed in an ambulatory surgery center (ASC), is currently $446. When the same procedure is done in a hospital, the payment to the hospital is only $224.

Yet, the Medicare payment for basic cataract surgery (CPT code 66984) performed in an ASC is now $187 less than for the same surgery performed in a hospital.

It's these inconsistencies that have the Medicare Payment Advisory Commission (MedPAC) strongly recommending an overhaul of the ASC reimbursement system. One key MedPAC aim: Payments to ASCs shouldn't exceed payments to hospitals for comparable procedures.

Because MedPAC is essentially an arm of Congress, its recommendations are taken seriously by the Centers for Medicare and Medicaid Services, which implements Medicare reimbursement schedules for both ASCs and hospitals. The problem is that the two payment schedules as currently constituted are derived from vastly dissimilar data sets. The result can be large differences in payments for comparable procedures.

MedPAC is now actively targeting ASC payment reductions in high-volume procedures such as YAG laser capsulotomy. To buttress its recommendations, MedPAC has data showing that ASCs can operate more efficiently and cost-effectively than hospital outpatient facilities. MedPAC is also concerned that capital is flowing into ASC development, indicating a high level of profitability for ASCs.

"A reduction in some ASC payments could help offset increased Medicare payments in other areas," says Kevin J. Hayes, a MedPAC research director.

Stephen C. Sheppard, a senior consultant for Medical Consulting Group of Springfield, Mo., specializes in developing ASCs for clients. He advocates a relatively simple solution that would index ASC payments to hospital reimbursement.

"For a variety of reasons, ASCs have lower cost structures than hospitals," he says. "If ASCs received an appropriate percentage of the hospital payment for a comparable procedure, I think the ASC industry would find that acceptable. The exact percentage could be arrived at after further study of ASC and hospital cost structures."

While Sheppard is concerned that dramatic drops in ASC fees could cause many ophthalmologists to stop performing certain procedures, he believes that compromises will eventually be worked out.

"The healthcare system needs ASCs to ensure patient access to such procedures as cataract surgery," asserts Sheppard. "We also expect approval soon for some retinal procedures to be performed in ASCs." The case mix may change, but ASCs aren't going away."

Alcon Launches New OTC Artificial Tear
Company also has a New Patanol Formulation.

Alcon, Inc. recently introduced Systane Lubricant Eye Drops for dry eye, an over-the-counter product that the company says represents an advancement of artificial tear technology.

"Systane contains a unique gelling and lubricating polymer system formulated to adjust to each patient's individual tear film pH," says Kim Marek, Alcon senior product manager for dry eye. "The polymerizing protection of Systane is achieved through the interaction of hydroxy propyl guar, demulcents and the patient's natural tears."

In a clinical study involving dry eye sufferers over a 6-week period, Marek says Systane delivered superior relief of dryness and foreign body sensation when compared with a leading artificial tear. These results were achieved with four applications of Systane daily.

Marek says Systane will compete in the artificial tear marketplace.

In other Alcon news, the comp any has developed a new, once-daily formulation of its flagship ocular allergy drug Patanol. The company said two recently completed clinical trials demonstrate that the new formulation is both safe and effective. Alcon, which currently markets Patanol in a twice-daily formulation, said the new formulation could be approved later this year.

IN THE NEWS

Best employers. Three eyecare companies are included in Fortune magazine's new list of the 100 Best U.S. Companies to Work For. Vision Service Plan, a California-based provider of prepaid vision services ranked 16 on the Fortune list, while eyecare giant Alcon Laboratories came in at number 40, and medical diagnostic equipment manufacturer Welch Allyn was number 98. Midwestern stock brokerage firm Edward Jones ranked first on the overall list.

New product. Novartis Ophthalmics has launched GenTeal PF, a preservative-free artificial tear product that contains all the ions found in natural tears, including zinc.

Appointed. Dominik Beck, Ph.D., has been appointed president of Haag-Streit USA, a part of the Haag-Streit group of medical products companies. Dr. Beck was previously CEO and general manager of Ophthalmic Development Company AG, an ophthalmic device company based in Switzerland.

PureVision ruling upheld. A U.S. court of appeals has upheld a U.S. district court ruling that Bausch & Lomb's PureVision contact lenses infringe on a CIBA Vision patent. The ruling prohibits B&L from manufacturing or selling PureVision lenses in the United States until at least 2005, when the patent expires.

Pennsylvania legislation. A new state law permits Pennsylvania optometrists to treat glaucoma and prescribe steroids if they receive additional glaucoma treatment training. Passage of the law means that optometrists in only Vermont, Hawaii and Massachusetts will remain without glaucoma or steroid privileges.

B&L executive leaves. Mark M. Sieczkarek, who served as president of Bausch & Lomb's Americas Region, has left the company. Until a successor is named, B&L CEO Ronald L. Zarrella will oversee the Americas Region.

New director. Barry W. Wilson, senior vice president of Medtronic, Inc. and president of Medtronic International, has joined the Bausch & Lomb board of directors.

REFRACTIVE SURGERY UPDATE

Big LASIK verdict set aside. An Arizona judge has set aside a $4 million jury award and ordered a new trial in the highly publicized case of an airline pilot who suffered impaired night vision after having LASIK. The pilot, Stephan Post, had to give up his job with United Airlines after undergoing the procedure.

The new trial was granted to University Physicians Inc. by Judge Kenneth Lee of the Arizona Superior Court after expert witness Jeffrey Machat, M.D., said he been mistaken in his testimony in behalf of the plaintiff. At the trial, Dr. Machat testified that Post's surgeon had breached the applicable standard of care. Dr. Machat, who practices in Canada, said he had based his testimony on his belief that the VISX S2 laser with 3.1 software used in Canada had the same effective treatment zone as the VISX S2 laser with 3.1 software used in Post's procedure in the United States. In fact, the two software programs are different.

VISX revenue surges. VISX, Inc., a developer of laser vision correction systems, said it shipped more than 100 WaveScan Systems for custom ablation in the last quarter of 2002. Demand for WaveScan Systems enabled the company to record revenue of $36.1 million, more than 23% above the year-ago quarter. The company says it now has more than 300 WaveScan Systems in vision correction centers worldwide and is awaiting FDA approval for its U.S. launch of custom vision correction.

LaserScan approval. LaserSight Inc. said it has received FDA approval to increase the laser pulse repetition rate of its LaserScan LSX precision microspot scanning system from 200 Hz to 300 Hz. The company said increasing the pulse repetition rate decreases treatment time while improving patient comfort, patient compliance and clinical management.