Congress Approves P4P in 2007
Physicians Who Report Data Can Earn Small Bonuses.
For the first time,
ophthalmologists will have an opportunity to earn bonus payments on
Medicare patients they treat. However, they may find that the payoff may
not even offset the cost of compiling the administrative paperwork
required to participate in the program.
Legislation passed by Congress in December calls for an additional 1.5%
reimbursement on all Medicare-covered services provided by qualifying
physicians in the second half of 2007, pro-rated over the entire year
and not to be paid until 2008. This translates to only 0.75% in possible
additional payments. Moreover, the bonus program is limited to the
aforementioned 6-month period, with no assurance that it will be
continued into 2008.
To qualify for the additional payment, ophthalmologists will have to
furnish required data on at least 80% of their cases that fall under
three or more of the eight reporting measures recently approved by the
Centers for Medicare and Medicaid Services (CMS) under the Physician
Voluntary Reporting Program (PVRP).
Each of the eight measures outlines specific data required by CMS for
Medicare patients in four PVRP reporting categories: primary open-angle
glaucoma, cataract, AMD and diabetic retinopathy. For example, for
patients with diabetic retinopathy one of the reporting measures
requires documentation of the presence or absence of macular edema and
the level of severity of retinopathy. For patients undergoing cataract
surgery, one measure requires documentation of pre-surgical axial
length, corneal power measurement and method of IOL power calculation.
�I advise practices, especially small ones, not to get too excited about
these potential bonus payments,� cautions Nancey McCann, director of
government relations for the American Society of Cataract and Refractive
Surgeons (ASCRS). �It�s a complicated situation at this point. Many
important details related to the program�s implementation are still to
be worked out. For some practices, the cost of gathering the data and
reporting it may be greater than the amount of the bonus payment.�
Despite the small bonuses and the short-term nature of the program, this
is the first time that Medicare payments have been linked to any type of
pay-for-performance (P4P) reporting criteria. Many private payers have
had P4P programs in place for years, particularly for specific medical
specialties such as family practice and internal medicine. However,
almost none of these programs have been applied to ophthalmology and
McCann notes that ophthalmologists are not experienced in meeting P4P
reporting requirements.
�You also have to remember that this legislation was passed by a
Republican-controlled Congress,� notes McCann. �The Democrats now
control Congress and they are generally not enthusiastic about P4P. We
are dealing with a lot of uncertainties here.�
AMO Will Acquire IntraLase
Physicians Who Report Data Can Earn Small Bonuses.
Since being approved by the FDA in 2001, the IntraLase FS laser has been
capturing an ever-increasing market share vs. microkeratomes. IntraLase
estimates that 30% of LASIK procedures performed in the United States
now use the company�s technology for creating the flap. Industry
analysts expect IntraLase revenue to jump to almost $155 million in
2007, compared to approximately $131 million last year. However,
IntraLase no longer has the femtosecond field to itself. Competitors are
now emerging in that arena, most notably Carl Zeiss Meditec�s VisuMax
technology and Ziemer�s LDV laser.
The AMO/IntraLase merger agreement has been approved by the boards of
directors of both companies and AMO has already arranged committed
financing from a consortium of banks to complete the purchase. AMO
expects the acquisition to be completed early in the second quarter of
this year.
�This acquisition offers significant strategic value by further
establishing AMO as the global refractive technology leader, positioning
us with a broad range of technologies and expertise to serve the needs
of comprehensive refractive practices,� said AMO Chairman, President and
CEO Jim Mazzo.
�Besides the value that we believe will be created for both companies�
stockholders, we think this transaction provides truly unique
opportunities,� commented IntraLase President and CEO Robert J.
Palmisano. �There will now be the ability to advance our femtosecond
laser technology in a coordinated way, both developmentally and
commercially, with the world�s leading excimer laser technology. Also,
this combination provides the opportunity for further innovation and
beneficial refinement of LASIK procedures that can and should grow the
overall LASIK market.�
AMO says key benefits of the acquisition are expected to include:
- The positioning of AMO as the eyecare professional�s �complete
refractive solution,� with a suite of corneal and lens-based products
and services that address a lifetime of refractive vision needs
- The linking of AMO�s Advanced CustomVue laser vision correction
procedure and IntraLase femtosecond laser innovations to define a new
standard of care: custom all-laser LASIK in a procedure that delivers
superior clinical outcomes and enhances surgeon productivity
- The optimization of cross-selling opportunities between installed
bases of both companies
- The combination of R&D expertise in excimer lasers, femtosecond
lasers, diagnostics and optics
- The blending of two companies� infrastructures and core competencies
to improve operating leverage and create strong platforms for
international expansion.
AMO expects the transaction to be dilutive to 2007 adjusted earnings per
share (EPS) and slightly accretive to 2008 adjusted EPS. The company�s
revised guidance, which includes the IntraLase acquisition, calls for
EPS of $1.40 to $1.55 in 2007 and $2.25 to $2.40 in 2008.
In related news, IntraLase has been awarded a long-term contract for up
to $45 million from the Defense Logistics Agency (DLA) for IntraLase FS
lasers, procedures, maintenance and support for the U.S. Army, Navy, Air
Force, Marine Corps and Federal civilian agencies.
In addition, a U.S. Navy ophthalmologist has performed the first LASIK
procedure using IntraLase flap-cutting technology on an aviator as part
of a new Bureau of Naval Medicine project. Currently, LASIK is not
approved for use in the U.S. military aviation community. But, after
many years of LASIK clinical trials on non-aviation personnel, the new
project is scheduled to treat additional aviators with LASIK using
IntraLase technology as part of the first step of the program.
Until the advent of IntraLase technology, concerns about the harsh
aviation environment and its effect on flap stability prevented the use
of LASIK for U.S. Navy aviators.
GIVING BACK: C. Downey Price, M.D.
Going to the Ends of the Earth to Help.
Knowing that the country was the poorest in the Western Hemisphere, Dr.
Price wrote to the Presbyterian missionary his colleague had worked
under and asked if they needed an ophthalmologist. The missionary�s
response: �Do we!,� Dr. Price says. Thus began his 32-year-and-counting
career in medical charity work.
Dr. Price, the recipient of the 2006 American Academy of Ophthalmology
Outstanding Humanitarian Service Award, reports that he got off to a
rocky start. He arrived in Haiti the night before his one-doctor eye
clinic was to open and saw what he estimated were thousands of people
lined up in the street. �I thought they were there for an upcoming
voodoo ceremony,� he recalls. What he realized the next morning was that
all those people were there for him.
He was the only physician and the two volunteers he had brought with him
were laypeople �his father-in-law and a member of his church. Moreover,
he had brought enough supplies to treat only about 200 people, an
estimate that had seemed reasonable back home in Conroe, Texas. �I knew
that I needed much more in supplies and staff.�
Dr. Price was able to fulfill his goal of bringing more eye care to the
people of Haiti, returning to the country various times between 1974 and
1986. In addition to providing treatment, he and his group managed to
raise enough money to build and equip a clinic, then equip an operating
room and build staff quarters. The clinic not only continues today, but
has become the primary hospital in Leogane, the H�pital Sainte Croix.
Political unrest in Haiti compelled Dr. Price to cease his trips there,
but he found other areas of the world desperate for eye care. In 1986,
he and a Methodist minister, B.T. Williamson, founded Benevolent
Missions International (BMI). The nonprofit organization has made more
than 100 mission trips to Latin America, American Samoa and Africa,
providing pro bono care to more than 40,000 people.
A typical team consists of 16 to 20 people, Dr. Price says, half of whom
are nonmedical personnel. All volunteers pay their own way (the trip is
tax-deductible). Dr. Price credits his wife, Edna, whom he calls �the
Energizer Bunny,� with coordinating the teams and handling their
financial details. BMI makes seven trips each year: two to Belize and
Fiji, and one trip each to El Salvador, Bolivia and American Samoa.
While cataracts and glaucoma make up the lion�s share of the ocular
problems BMI teams treat in every country, each region seems to have its
own special problems. Dr. Price says that in the South Pacific, between
25% to 30% of the population has diabetes, so BMI volunteers encounter a
lot of diabetic retinopathy. �This requires ongoing treatment, so we
have a retinal team that does panretinal photocoagulation and focal
laser treatments with an argon laser,� Dr. Price says. In Latin America,
he sees a lot of pterygium. �These people are out all year long in wind
blowing dust and dirt, not wearing sunglasses,� he explains. �On a
typical trip to Latin America, you may do 40 cataract operations, but 50
for pterygium � just in a week.�
As in Haiti, Dr. Price is committed to building medical facilities and
training local doctors. BMI has built clinics and surgery centers in
Belize, El Salvador and Bolivia, and optical labs in the latter two
countries. All three clinics operate year-round, run by local people
whom BMI has trained. Funding comes from donations from various
churches, the Lions� Club and individuals, as well as BMI fundraisers.
�We�ll contact churches and individuals to ask them to help buy a
specific piece of equipment, so they�re not just giving money,� Dr.
Price says. BMI has virtually no overhead (neither Dr. Price nor his
wife take a salary), so all donations go directly to buying and shipping
equipment.
IN THE NEWS
Tecnis Multifocal approval delay. Advanced Medical Optics (AMO) said the
FDA has recommended that the company enroll additional subjects in its
U.S. clinical study for the Tecnis Multifocal IOL. AMO still intends to
file a premarket approval (PMA) application for the Tecnis Multifocal
this month in accordance with its original plan to launch the product in
the United States in the first half of 2008. However, in light of the
latest questions raised by the FDA, the company now believes there is a
reasonable likelihood the launch timeline could be extended by
approximately 12 to 18 months.
K AMO acquires WaveFront. Advanced Medical Optics, Inc. (AMO) has
acquired WaveFront Sciences, Inc., a leading provider of proprietary
wavefront diagnostic systems for refractive surgery and medical
research.
WaveFront Sciences, Inc.
WORTH NOTING
AAO has new leader. Retina specialist Charles P. Wilkinson, M.D., is
the new president of the American Academy of Ophthalmology. His term
runs through Dec. 31 of this year.
Currently, Dr. Wilkinson is chairman of the department of ophthalmology
at the Greater Baltimore Medical Center and is professor of
ophthalmology at The Wilmer Eye Institute at Johns Hopkins University.
An editor/author of numerous textbooks and journal articles in his
specialty, as well as a frequent lecturer, Dr. Wilkinson succeeds Harry
Zink, M.D., who will now serve as Academy Past President.
�I look forward to continuing the Academy�s mission to advance the
lifelong learning and professional interests of ophthalmologists and to
ensure that the public can obtain the best possible eye care,� Dr.
Wilkinson said. �With the ever-increasing needs of the large baby-
boomer generation, there will be an even greater importance placed on
the quality of eye care in the United States in the next 20 years. The
Academy will lead the way on all counts.�
B&L management changes. Bausch & Lomb has realigned management
responsibilities for the Americas Region, following the announcement by
Paul G. Howes, currently senior vice president and president-Americas
Region that he intends to resign from the company to pursue career
opportunities elsewhere. Howes will remain with Bausch & Lomb to effect
an orderly transition to the new management structure.
Gary M. Phillips, M.D., will head the U.S. pharmaceutical and surgical
businesses. Currently corporate vice president-global pharmaceuticals,
Dr. Phillips joined Bausch & Lomb in 2002 from Novartis Pharmaceuticals.
Angela J. Panzarella, corporate vice president-global vision care, will
assume responsibility for the commercial operations in Canada and Latin
America in addition to her current responsibility for global strategy
for the contact lens and lens care businesses.
Robert J. Moore will continue in his position as vice president and
general manager of the U.S. vision care and OTC eyecare business. OM.
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