Upgrading Cataract Surgery
After a long campaign, Medicare has revised its view on presbyopia-correcting IOLs. How will this affect your practice?
By Kevin J. Corcoran, C.O.E., C.P.C., F.N.A.O., and Mary Pat Johnson, C.O.M.T., C.P.C., C.O.E.

Three decades ago, cataract patients could only look forward to thick eyeglasses and uncertain outcomes after cataract surgery. Today, thanks to numerous and significant advances, neither ophthalmologists nor their patients fear this procedure. In fact, it's fair to say cataract surgery is an exceptionally beneficial procedure with few complications or unhappy patients. How can anyone improve on this?

Ophthalmologists now strive for even better results by trying to eliminate any and all ametropias following cataract surgery to reduce or eliminate the patient's dependence on postcataract glasses or contact lenses. In that effort, they can now employ presbyopia-correcting intraocular lenses (IOLs).

Premium IOLs for Presbyopes

Currently, three presbyopia-correcting IOLs are available: AcrySof ReSTOR by Alcon, crystalens by eyeonics and ReZoom by Advanced Medical Optics. Unlike conventional monofocal IOLs, these lenses provide optimal near, intermediate and distance vision after cataract surgery. Presbyopia-correcting lenses also cost more, between $800 and $900, compared with the average $90 IOLs used by ambulatory surgery centers (ASCs) for Medicare beneficiaries.

The economic hallmark of cataract surgery with a premium IOL is the provider's expectation of additional payment beyond the fees collected for surgery with conventional IOLs. In most cases, these expectations are frustrated by limitations on balance billing imposed by most third-party payers. Balance billing is the practice of asking a beneficiary to pay the difference between the actual charge and the amount the provider has contractually agreed to accept as full payment. It does not refer to collecting co-payments and deductibles. At the very least, providers who balance-bill patients may breach pre-existing agreements with payers, which could result in termination of provider agreements or other contractual remedies, such as monetary penalties. Some state insurance laws or consumer protection laws also might be implicated.

Despite prohibitions against balance billing, commercial payers generally agree providers can bill enrollees for noncovered services. In this situation, providers should clearly define and separate covered from noncovered services before performing surgical procedures. Many commercial payers require documentation that enrollees understand they're responsible for all expenses before any service is performed.

In other aspects of reimbursement, the concept of "deluxe" items, such as wheelchairs and hearing aids, incorporates both covered and noncovered elements. Within ophthalmology, the classic example is eyeglass frames. The payer establishes a covered amount for frames and lets the optician accept additional payment from the beneficiary to upgrade the frame. For example, if Medicare allows $60 for a frame, your pseudophakic patient can order a $300 frame and pay the additional $240 out-of-pocket. This is not balance billing. The claim form includes two distinct lines to distinguish between the covered and the noncovered elements.

Medicare and some third-party payers have accepted the deluxe IOL concept, allowing providers (mostly ASCs) to collect extra fees from beneficiaries for noncovered aspects of otherwise covered lenses. They've also agreed surgeons can charge beneficiaries for some noncovered ancillary services that constitute extended care for refractive error, for example:

• Refraction to determine refractive error

• Contact lens trial fitting to assess refractive error

• Wavefront aberrometry to assess refractive error

• Corneal topography associated with refractive surgery

• Pachymetry associated with refractive surgery

• Refractive keratoplasty to reduce dependence on eyeglasses or contact lenses (e.g., limbal relaxing incisions, corneal relaxing incisions, LASIK).

Prior to surgery, in addition to obtaining informed consent, surgeons should ensure beneficiaries understand that cataract surgery with deluxe IOLs includes covered and noncovered items and services. This patient-shared billing concept is illustrated in "Reimbursement Grid for Cataract Patients."

A minority of providers don't accept assignment, or they opt out of health plans altogether. Their patients pay for services, bypassing hindrances imposed by insurance regulations. Conversely, more than 90% of cataract surgeons accept

Medicare-assigned fees as full payment, writing off the difference between stated and allowable fees. Consequently, most surgeons, ASCs and hospital outpatient departments don't expect to receive full payment for cataract surgery. Instead, they receive payments aligned with Medicare's fee schedule (see "Medicare Reimbursement for Cataract Surgery").

"Cataract Surgery with Deluxe IOLs" shows how covered services are treated as assigned claims and subject to the discounted payments described in "Medicare Reimbursement for Cataract Surgery." The contractual adjustment would be written off, and noncovered items and services would not be discounted.

Patients concerned about finances often hesitate to ask for a detailed breakdown of cataract surgery charges. To put them at ease, it's best to explain fees clearly and concisely. An all-inclusive number that doesn't distinguish charges covered by insurance from noncovered fees can raise the specter of balance- billing violations. Most important, the patient wants to know what he owes, and the provider should take the opportunity to collect payment for the noncovered items and services before the procedure.

Good News From Medicare

On May 3, 2005, the Centers for Medicare and Medicaid Services (CMS) declared beneficiaries can upgrade from conventional monofocal IOLs to deluxe presbyopia-correcting IOLs and pay any additional charges beyond those associated with standard cataract surgery (www.cms.hhs.gov/rulings).

Before this ruling, Medicare beneficiaries could receive presbyopia-correcting IOLs in one of two ways:

1. For covered procedures, patients could receive deluxe IOLs if the hospital or ASC accepted the standard reimbursement for the surgery, including IOLs. This entailed a sizeable financial loss for the facility.

2. For noncovered procedures � for example, an incipient cataract not meeting Medicare's medical necessity guidelines � the patient had to agree to pay out-of-pocket. Both the surgeon and the facility required the patient to sign an Advance Beneficiary Notice (ABN), acknowledging Medicare won't cover the procedure and agreeing to pay all associated fees.

Third-party Payers Weigh In

The May 2005 favorable CMS ruling is the culmination of a process that began in 2003, when a number of surgeons, administrators and industry representatives, as well as Rep. Christopher Cox (R-Calif.), approached Medicare and several large third-party payers seeking support for patient-shared billing. The results were mixed, but somewhat favorable. One of the dissenters, Blue Cross/Blue Shield of Alabama, issued the following statement:

Neither physicians nor facilities should bill patients for any additional costs associated with implanting crystalens or other accommodative lenses when used in conjunction with cataract extraction.

BC/BS Alabama then went on to say:

Implantation of crystalens or other accommodative lenses to correct presbyopia without cataract extraction does not meet Blue Cross and Blue Shield of Alabama's medical criteria for coverage.

This policy states that some beneficiaries can't choose presbyopia-correcting IOLs unless they pay for the entire procedure, which was Medicare's position before the recent CMS ruling.

Paying Out-of-Pocket

The amount a patient can expect to pay for implantation of deluxe IOLs varies. The two principal determinants are the extent of cataract formation and the amount Medicare or another third party-payer will pay.

Surgery for visually insignificant cataracts won't qualify for insurance coverage, so the patient must pay for the entire procedure. Alternately, insurance

covers the standard operation for patients with visually significant cataracts; the patient must pay for any noncovered items and services, as well as copayments and deductibles.

Consider the following four common scenarios as examples:

Patient #1 (Employer's health plan)

• BCVA 20/50 OU

• 3+ NSC OU

• Patient's out-of-pocket expense: Upgrade only

Patient #2 (Employer's health plan)

• BCVA 20/25 OU

• Presbyopic, incipient cataract

• Noncovered

• Patient's out-of-pocket expense: Entire procedure

Patient #3 (Medicare)

• BCVA 20/30 OU

• Presbyopic, incipient cataract

• Noncovered

• Patient's out-of-pocket expense: Entire procedure

Patient #4 (Medicare)

• BCVA 20/50 OU

• 3+ NSC

• Patient's out-of-pocket expense: Upgrade only.

Additional Documentation

In addition to the usual medical records, surgeons incorporating presbyopia-correcting IOLs into practice must obtain a financial agreement with the patient and an agreement with the third-party payer that addresses deluxe IOL economic issues. Go to www.corcoranccg.com/default.asp?location=\alcon for examples of the relevant forms.

To avoid allegations of balance billing, providers should explain the dual purpose of refractive cataract surgery to contracted third-party payers and seek an amendment or codicil to the existing contract. Although time-consuming, providers can request preauthorization on a case-by-case basis without making wholesale changes to third-party payer agreements.

Positive Consequences

The introduction of presbyopia-correcting IOLs and the issuance of the May 2005 CMS ruling will change the landscape of cataract surgery. This ruling is in step with the American Society of Cataract and Refractive Surgery position statement on Medicare patients' access to new technology.

Enthusiasm is high among surgeons and manufacturers. Manufacturers see an opportunity to showcase new products and increase revenue. Surgeons are excited about the chance to help presbyopic patients and be compensated appropriately for the extra service. Patients who have received these lenses give testimonials about their satisfaction and recommend the surgery to friends. Finally, all these goals are possible without increasing Medicare and third-party payer expenditures.